Ensuring financial security is a top priority for you and your loved ones. One of the most crucial steps in achieving this is implementing income protection. This decision can provide financial stability and security when you are unable to work due to illness or injury, whether temporarily or long-term.

How Does Income Protection Work?

Income protection insurance provides you with a regular monthly income for a predetermined period or until you can return to work, either full-time or part-time. Benefit periods typically offer options of 2 years, 5 years, or up to age 65.

Generally, the maximum cover you can apply for is up to 70% of your gross income from employment and superannuation contributions. However, there may be offset clauses if you receive other sources of income, depending on the insurance provider and the conditions outlined in the product disclosure statement.

If your policy includes superannuation contributions, this portion of your income protection will be paid towards your superannuation while you are unable to work fully.

Understanding Waiting Periods

Another critical factor to consider is the waiting period, which can vary from 14 days, 30 days, 90 days, or 180 days from the date of disablement or illness.

It’s important to note that if you take out income protection through your superannuation, the cost of the insurance comes out of your retirement savings. This approach minimises the impact on your current household expenses but does affect your overall retirement savings.

Additional Considerations

Depending on your insurance provider and whether you are classified as a ‘White Collar’ or ‘Heavy Blue Collar’ worker, there may be additional qualification requirements to make a successful claim.

To ensure you have the right policy tailored to your individual needs, be sure to contact Morgan Insurance  Advisors.

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