Income insurance protection for young and single people

Do I need income protection if I'm young and single?

You are young, single, and on your road to success. It seems that everything is going well and the whole universe seems to agree with you. Nothing can go wrong. So what do you need income protection insurance for?

To determine if you need income protection ask yourself the following questions:

  • Is your private health insurance comprehensive enough? An injury or illness may have incur costs that health insurance can't cover e.g. gaps that you need to pay yourself.
  • Are your savings enough to cover your ongoing costs? If you were seriously injured or became ill today, consider if your savings are enough to sustain paying your ongoing expenses the time you're unable to work.
  • Do you have any outstanding debts or loans? If you have a car loan or student loan, this could be troublesome if you suddenly find yourself unable to work.

Compare income protection quotes from these direct brands

Name Product Short Description Maximum Monthly Benefit Maximum % of Income Covered Maximum Benefit Period Waiting Period
Receive up to 30% off in your premiums if you’re in good health and meet BMI qualification tests. T’s and C’s apply.
24 months
14 or 28 days
Take out a policy and get a $100 bonus gift after holding cover for 2 months. T's and C's apply. Offer ends 31 March 2019.
5 years
14, 28, 60 or 90 days
Cover up to 85% of your Income (up to $10,000 per month) if you can’t work due to sickness or injury. Cover for 1,000 job types - full-time, part-time and self-employed.

5 years
14, 28, 60, or 90 days
Cover up to 75% (to a maximum of $10,000) of your monthly income with Guardian Income Protection.
5 years
30 or 90 days
Cover up to 75% (to a maximum of $30,000) of your monthly income with NobleOak Income Protection. Plus, get your first month free. T&C's apply.
2 years or to the age of 65
30 or 90 days
Fast online application - no phone call needed. Cover up to 85% (to a maximum of $42,000) of your monthly income with Aspect Income Protection.
5 years
14, 30, 60 or 90 days

Compare up to 4 providers

Life Insurance for Singles in different life stages

What are the benefits of income protection for the young and single?

As discussed, planning about the future must include the possible risks that are involved in it and formulate a feasible financial plan to prevent or soften the impact of those risks. One of the most practical plans in risk management is to draw up income protection insurance for yourself. In case you are not aware of it yet, income protection insurance has more advantages for you than disadvantages.

  • Cheaper premiums. An average income insurance quote for someone who has a $56,000 annual income with a 30-day waiting period has around $27 worth of monthly premiums or $300 worth of annual premiums. This quote is for an income insurance policy which will give you cover until you are 65.
  • Tax benefits. The Australian Tax Office states that benefits received under an income protection policy in place of your regular income are considered tax deductible.
  • It provides a steady income for an ongoing period. An income protection insurance policy can have a maximum cover of 75% of your income and up until you are 65 years old. Most income insurance policies are annually indexed while under claim. This means that the monthly benefits you receive keeps up with the inflation rate.
  • It becomes an extension of your medical insurance. The benefits you will receive from your medical insurance can only do as much as pay your medical expenses. Expenses like rehabilitation or even modifications to your lifestyle can be taken care of by income protection insurance.

What are some ongoing costs that I'll might need to cover when I can't work?

The costs of an injury and illness don't simply stop with medical expenses. Some ongoing costs that you might need to consider if you can't work include:

  • Food
  • Rent
  • Mortgage
  • Water
  • Electricity
  • Mobile phone
  • Rehabilitation
  • Credit card debt
  • Personal loans, eg for your car
  • Student loans

Choosing between indemnity and agreed value Income protection

Contrary to what other young adults might say, thinking about getting income protection is not at all boring and complicated when you consider the benefits it can give you. Once you get past the initial confusion about insurance jargons, you will begin to appreciate the benefits it can give you. And here’s another insurance jargon to decipher to give you a better understanding what income protection really is.

  • Indemnity Value Income Protection – This is the cheaper policy between the two income insurance policies available. Under this policy, your insurance provider has the right to reduce your monthly benefit if your income decreases when you get the policy. Therefore, your insurance provider will ask some financial proof about your income for the past 12 months before claim time to even out your monthly benefit with the latest salary you have prior to the claim.
  • Agreed Value Income Protection – As the name suggests, this income protection policy gives you the assurance that whether your income falls during claim time, you will receive the full amount of monthly benefit you applied for. The only downside to this, however, is that this assurance comes with a much higher price to pay.

Receive quotes for income insurance protection for young and single people

William Eve

Will is a personal finance writer for specialising in content on insurance. While he cannot give personal advice to clients, Will enjoys explaining the intricacies of different types of protective cover to help individuals and businesses find affordable cover that won't leave them underinsured.

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