Should office workers consider income protection insurance?
While office workers are not exposed to the same level of risk in the workplace as other industries, income protection insurance still offers vital protection against injury or illness.
What cover does income protection insurance provide?
Income protection insurance provides an ongoing benefit payment (usually paid monthly in arrears) in the event that you are unable to work due to serious illness or injury. This benefit is usually 75% of the workers salary though some policies provide over 75% if the extra portion is contributed to superannuation.
What can the benefit be used for?
The benefit helps ensure that you do not experience financial hardship while forced to take time off work. It can be used for expenses such as:
- Rehabilitation costs
- Everyday living costs
- Rent payments
- Children's education fees
Compare income protection quotes from these direct brands
What are the risks of white collar jobs?
While the risk of both minor and major injuries at work are higher for construction worker than office workers, it does not mean that white collar work is risk-free. White collar workers are susceptible to chronic pain such as carpal tunnel syndrome, back and neck pains, and migraines. These little issues, when left unchecked, can build up and end up being debilitating. Common risks for white collar workers include:
These risks don't really worry me, do I still need income protection?
If the risk of working in an office don't seem significant enough to justify income protection then you should consider the fact that many injuries and illnesses can occur outside of the workforce. Without income protection, you'll need to fall back on either:
- Family or friends
- A loan
How much of my income can I get insured if I'm white collar worker?
This will depend on your individual job. Income protection can typically cover up to 75% of your regular income.
Sample of white collar incomes and how much is covered by income protection
Here's an example of the types of jobs and respective incomes based on a various white collar industries in Sydney.
|Position||Industry||Annual Salary||75% of Annual Salary|
|Corporate Finance Graduate||Finance||$40,000||$30,000|
|Senior Brand Manager||Marketing||$120,000||$90,000|
|Mail Room Clerk||Office Support||$45,000||$33,750|
Source: 2016 Hudson 2016 Salary Guide
Can income protection cover high income white collar workers?
If you're an office worker in a high income position, the good news is that many brands can provide cover for high incomes. Maximum sums insured of $1Million and over are shown below:
|Provider||Insurance Type||Product Name||Minimum Cover||Maximum sum insured||How to Apply|
|Life Cover||AIA Priority Protection - Life Cover Plan||No minimum||No maximum||Enquire|
|Life, Trauma and TPD Cover||AMP Flexible Lifetime Protection – Death, TPD, Trauma||No minimum||No maximum||Enquire|
|Life Cover||Asteron Life Insurance (Death Cover)||No minimum||$1,000,000||Enquire|
|Life Cover||BT Term Life||No minimum||$1,000,000||Enquire|
|Life Cover||ClearView LifeSolutions Life Cover||$50,000||$1,000,000||Enquire|
|Life Cover||Comminsure Life Care||No minimum||$800,000||Enquire|
|Life Cover||MLC Life Cover||$25,000||No general maximum though conditions may apply for cover over $15,000,000||Enquire|
|Life Cover||TAL Accelerated Protection - Life Insurance||No minimum||No maximum||Enquire|
- Incorrect lifting technique
- Lifting heavy objects
- Repeatedly moving objects
What can Income Protection Benefits be used for?
Income protection, as mentioned earlier, pays a benefit up to 75% of your gross monthly income. Rather than being paid a lump sum, the benefit is paid in monthly instalments. These funds can be used to cover bills such as mortgage and credit card payments, daily living expenses, and medical and health expenses.
- Mortgage Payments. If you had to stop working because of an illness or injury, would you be able to keep paying your mortgage? Income protection can help you insure that in the event you are unable to work that at least you will be able to service your mortgage.
- Credit Card Payments. Your credit card debts can accumulate a lot of interests when left unpaid. The monthly benefit from income protection can help you cope up with your credit card payments.
- Daily Living Expenses. Income protection insurance can allow you to continue to pay your utility bills and other daily expenses should you be out of the workforce.
- Medical and Health Expenses. When you suffer an illness or sustain an injury, it can be expensive. In addition, your injury or illness could be longstanding and the time of rehabilitation and recuperation might take longer than you expect. Income protection can help you meet the demands of medical and rehabilitation costs, especially if there are modifications to be made to fit your lifestyle change.