Income protection for single parents

If you are a single parent and your family relies on your income, income protection could be a good next step.

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As a single parent, a lot rests on your shoulders to provide for your family. So if you were suddenly unable to work due to an illness or injury, how would you cope? Income protection insurance is income replacement for just those events. It means that if you can't work, you will continue to receive up to 85% of your income. So you can focus on your family and your recovery, instead of worrying about paying the bills.

Do I need income protection if I'm a single parent?

Single parents understandably face a lot of added pressure to ensure their families are provided for. Having income protection is an added safeguard that can help relieve some of the stress about what could happen if you suddenly couldn't work. Here are some of the reasons you should consider taking out a policy:

  • Protect your single income. It's probably even more important for you to protect your income because you're relying solely on your income to support your family.
  • Peace of mind. Being a single parent can be overwhelming at times. Income protection can simply provide you with one less thing to worry about. If you're sick or injured and need to take some time off work, you don't need to worry about how you'll pay the bills.
  • It's your financial safety net. With a lot of responsibility resting on your shoulders, it's nice to have something that's got your back. Income protection can pay the mortgage, household bills, car loans, children's clothes, food and more so that you don't need to disrupt or downgrade the life you've made for your family.
  • It can cover involuntary redundancy. If you want to pay a little extra, some insurers will also cover you for involuntary redundancy. So if you are suddenly facing a job loss, you will have more time to find a new job and bounce back.

Compare income protection options

Name Product Maximum Monthly Benefit Maximum % of Income Covered Maximum Benefit Period Waiting Period Options Policy Type Apply
AAMI Income Protection
$10,000
75%
5 years
Apply directly online
If you’re an existing AAMI customer, you can save 5% on income protection. New customers can get one month free by paying annually.
Suncorp Income Protection
$10,000
75%
5 years
Apply directly online
Sign up and become a member of Suncorp Benefits. Access savings of up to 15% from major retailers. Existing members can get a 5% discount off their policy.
NobleOak Income Protection
$25,000
75%
Up to 65
Apply directly online
With NobleOak, you can lock in a policy with a benefit period covering you up to the age of 65. Cover limits may go as high as $25,000.
Insuranceline Income Protection
$10,000
75%
5 years
Apply directly online
Get a $100 bonus gift after 2 months. Plus, and get 12 months cover for the price of 11 if you pay annually. T&Cs apply.
Commbank Income Protection by AIA Australia
$10,000
75%
2 years
Apply via Broker
Get income protection online in a few simple steps. Receive access to the AIA Vitality program and a 5% discount if you hold both life insurance and income protection policies with AIA & Commbank.
RAC Income Protection
RAC Income Protection
$10,000
75%
2 years
Apply directly online
You can get cover of up to 75% of your income, to a limit of $10,000 per month, with RAC.
RACQ Income Protection
RACQ Income Protection
$10,000
75%
2 years
Apply directly online
Easily purchase RACQ income protection online, with access to the AIA Vitality program and a 5% discount for joint policies.
Bendigo MaxLife Income Protect
Bendigo MaxLife Income Protect
$10,000
75%
2 years
Apply directly online
Take advantage of a 5% joint policy discount with Bendigo. Also, you can unlock policy savings through the wellbeing programme AIA Vitality.
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Compare up to 4 providers

Pros and cons of income protection for single parents

Weighing up the advantages and disadvantages of income protection insurance for single parents can be a helpful way of deciding if it's worth it for you.

Pros

  • It can pay the bills. From rent or mortgage to car insurance, income protection can pay your bills while you're off work.
  • Self-reliance. Income protection ensures that you can continue to support yourself and your family. You don't need to look to family or government assistance for support.
  • You know how much you're getting. Income protection can provide you with up to 85% of your monthly income. Unlike any other type of benefits, you know exactly how much you'll get and it's in line with what you currently earn.
  • Claiming is simple. All you generally need to do is show how much you earn, get a doctor's note and make your claim. The insurance company then does the rest.

Cons

  • It's another expense. It may provide peace of mind, but it adds a monthly expense to your budget. It's worth asking yourself whether you can afford to pay for that financial security. You can find out more about how much income protection insurance costs here.
  • Insurance can be a gamble. Ultimately, insurance is protection for "just in case". The things it protects against are generally things we'd never want to have happen to us and sometimes those things never actually happen. It can seem like a waste of money, but in the end, it's generally better to be prepared.

Are there cheap income protection options for single parents?

Yes. Cheap income insurance is available – you can find out more about it here. Some of the ways you can keep it affordable include the following:

  • Choosing a longer waiting period. The waiting period is the time you need to wait from when you're first unable to work to when you receive your first payment. The longer you wait, the cheaper your premiums tend to be.
  • Determining your benefit period. The benefit period is the period of time that you will receive payments from your insurer. It's worth considering your own situation and any other income streams that you may have.
  • Applying for cover younger. The younger and healthier you are, the cheaper your premiums are likely to be.
  • Including your premiums when you do your tax. Income protection premiums are generally tax deductible, so you can get some money back at the end of the financial year.
  • Give up smoking. If you stop smoking for two years, you can be classed as a non-smoker and lower your premiums.
  • Compare. It may be a little tedious, but don't just go with the first policy you see. It's usually there for a reason. Dig a little deeper and compare policies to find one that works best for you.

What other insurances should I consider as a single parent?

Income protection isn't the only type of insurance worth considering if you have others depending on you. Consider the following insurance types:

  • Life insurance. This pays your loved ones a lump sum when you die. That money can be left to your kids as an inheritance and to pay off any debts and loans you have.
  • Trauma and TPD insurance. Trauma and TPD insurance can provide you with a lump sum of money if you become critically ill or disabled and can no longer work.
  • Child trauma insurance. Child trauma insurance can pay you a lump sum if your child suffers a medical condition like cancer.

Bottom line

Income protection insurance for single parents can provide peace of mind and financial security. With just the one income to support your family, it just makes sense to cover yourself. To find out more, you can speak directly to an insurance adviser by filling out the form below.

Enter your details and one of our partner brokers will call you. They will discuss your quote, options and available products.

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An adviser can help you find cover from trusted life insurance brands.

  • Get competitive quotes from multiple brands
  • Lower rate of declined claims (according to ASIC)
  • Save time and effort

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FAQs

Is income protection only for people with mortgages?

No. It's for anyone who relies on their income to pay the bills and everyday living expenses, from school fees to car insurance and rent.

Can income protection help if I've lost my job?

It's possible to get income insurance that covers involuntary redundancy. However, you'll have to pay extra for it and it depends on the job you have. You can't get cover if you simply quit or are fired.

Does income protection affect Centrelink payments?

Because income protection payments are considered a form of income, they can reduce your Centrelink payments.

Picture: GettyImages

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