Have you considered income protection insurance? 

The sad reality of life is that people have accidents, fall ill and are forced to take long periods of time off work for treatment and recovery.

It’s easy to think, ‘it’ll never happen to me’ but of course, it may.

As a contractor, income protection insurance is essential to cover you in times of illness and/injury, because unless you’ve got a hidden stash of cash, there’ll be no paid sick leave coming your way.

Income protection insurance will help cover your ongoing costs – such as your rent or mortgage repayments, car repayments, household bills, credit card payments and even the basics like food and clothing. 

Importantly, it will also release you and your family of financial stress at a time when you’re likely to be overburdened by stress, needing to make decisions about treatments and even inundated with unexpected medical costs.

Income protection insurance will pay you an agreed amount of money each month after a pre-determined waiting period. The amount you receive will be based on a maximum percentage of your income. This will either be verified at the time of application; or at the time of making a claim.

The amount you pay for income protection insurance will depend on your risk of illness or injury – which comes down to factors such as your age, current health and lifestyle status and your job. It will also depend on the percentage of your income you would like to insure- e.g, whether in the event of illness or injury you would like 60%, 70nominate as the monthly income paid to you in the event of a claim. Additionally, it will depend on the waiting period – so whether you are prepared to wait for 14, 28, 60 or 90 days before the income protection plan kicks in and begins to make payments to you.

When you decide to take out income protection insurance, consider your ongoing expenses and how much cover you will need to be able to meet them. Is there another earner in the family who will be able to maintain repayments until your waiting period is over… and how much can you afford to pay in premiums each month.

Income protection insurance istax-deductible, but even so, it does come at a cost, however in the event of a long-term illness or injury, the costs can be even higher. 

Other income protection insurances available include:

  • Permanent Disability Cover – financial cover in case sickness or injury leaves you permanently disabled and unable to perform your daily activities,
  • Involuntary Unemployment Cover protection if your business becomes insolvent (or you are made redundant),
  • Homemaker Cover – the ability to add your partner to your policy, which provides financial protection if they are unable to complete their usual household duties due to sickness or injury,
  • Holiday Injury Benefit – an extra one-off payment of up to $3,000 if you’re injured during state school and public holidays, or more than 200km from home, and
  • Kids Injury Cover – payouts for a range of common childhood injuries.

Don’t be the one saying “I wish I had…”

Before jumping into an income protection policy, it’s important to do your homework. Policies, premiums, payouts and advice will differ between insurance providers and brokers. At the Ayers Group, our experts can connect you with trusted insurance brokers who can sit down and discuss your needs and propose a tailored insurance package to protect your income. 

Talk to an expert from the Ayers Group today.