Income Protection Insurance
What does income protection cover?
Income protection insurance - also known as "salary continuance insurance" pays you a monthly income benefit if you're unable to work due to illness or injury.
The difference between this cover and TPD insurance is that income protection may pay benefits for temporary conditions, ranging from weeks or months right up to long term illnesses that can result in the loss of many hundreds of thousands of dollars in income.
Income protection policies can generally cover up to 75% of the pre-tax salary you earned before the illness or injury. This can be used for:
- Mortgage repayments
- Paying off debts
- Ongoing income.
Income protection benefits commence after a predetermined waiting period that you nominated when you took out the cover.
If you're an employee, you might want to tailor the waiting period to fit in with your sick leave provisions. Generally, the longer the waiting period the lower the premium.
The policy continues to pay as long as you remain disabled during the policy's benefit period. The benefit period can be a set time frame such as two or five years, or be age-based, up to age 60 or 65. Generally, the longer the potential benefit period the higher the premium.
Income protection premiums are generally tax deductible as an expense incurred in earning your income, depending on your circumstances.
TIO Financial Planning can help.
If you want to know more about protecting your lifestyle with Income Protection Insurance and whether it is suitable for your circumstances Contact TIO Financial Planning.
Territory Insurance Office is an Authorised Representative of Financial Wisdom Limited
ABN 70 006 646 108 AFSL No. 231138
* It is important to understand that this information is of a general nature only. It has not been prepared taking into account your particular investment objectives, financial situation or particular needs. You should seek our advice or the advice of another financial adviser before making any decision on the basis of this information.