Income Protection

Income Protection

If you’re unable to work because of an illness or injury, it’s unlikely you’ll be receiving a steady income that’s similar to what you were earning.
Income Protection insurance is designed to pay a monthly benefit to give you the freedom to focus on your recovery, without worrying about where the money is going to come from for your every day bills like your mortgage, groceries or utilities.
Most income protection policies are flexible and can be tailored to suit your personal circumstances. For instance, you can generally choose:

  • A ‘waiting period’ between fourteen days and two years. This is the time between you becoming disabled and receiving your first income protection payment. A shorter waiting period usually means a higher premium.
  • A ‘benefit period’ of two or five years, or up to age 70. This is the period during which you receive your income protection payments.
  • How much income protection insurance you require, although the maximum is generally 75% of your gross income.
  • An ‘indemnity’ contract. An ‘indemnity’ contract means the monthly payment will be assessed when you make a claim.

How much income protection insurance you require depends on a number of factors, but many people factor in any other sources of income they’d have if they weren’t working, along with ongoing expenses. The maximum cover you can request is usually 75% of your gross income.
Income Protection premiums are usually tax deductible, although tax is payable on benefit payments.
The cost of income protection insurance varies based on a range of factors including your age, gender, and the amount of cover you require.
MSB Financial Consultants can work with you to determine an appropriate level of cover for your needs.