Income protection is an insurance policy you can take out that will pay you part of your income if you're unable to work because of getting sick or injured. Generally, income protection can pay out:
Every fund offers different benefits and definitions of full and partial disability, which will affect what you can claim. Be sure to read the Product Disclosure Statement (PDS) carefully.
Put simply, if you would be in financial stress if you stopped earning your income today, you could probably benefit from income protection. This will be more likely if you have dependencies, debts, or if you rely on a single income. Here are a few examples:
There are few times when you might not need income protection.
No expenses of dependencies: If you have low or no expenses, dependencies or debts, you might not need income protection insurance.
Close to retirement: If you've only few more years in the workforce and have enough savings, your response to sickness or injury might just be to retire early.
Low salary: Income protection is most useful to people earning a lot. If you're on a low salary, you might not benefit from income protection. You could look at Total & Permanent Disability insurance instead, whichpays out if you become permanently unable to work, regardless of earnings.
These aren't the only groups who might not need income protection, and you may still benefit if you fall into one of these categories. You should speak to a licensed financial planner before making any a decision.
Unfortunately, Finder research finds most Australians have far less than 3 month's earnings in their savings. According to Finder's Consumer Sentiment Tracker data from July 2023, around 60% of Aussies have less than 3 months of savings. The full data is in the chart below.
How much could you save if you lived in a different city in Australia? Let's find out.
The right insurance broker can assist you in finding the right policy by comparing the market based on your specific needs.
The tradies guide to income protection insurance.
Income protection for couples ensures your partner isn't hurt financially if you are temporarily unable to work due to illness or injury.
Find out how you can get income protection insurance for anxiety.
Find out why income protection is an important tool to combine with your entitled sick leave.
Australians love their sports, so it’s easy to get complacent about the chance of a serious injury. Find out which sports are the leading causes of injuries.
Find out how you can benefit from income protection even if you have a pre-existing condition, and which providers will cover you.
One of the benefits of income protection insurance is that you may have the ability to claim a tax deduction on your premium benefits. Find out if the same rules apply for policies inside super.
When one in three Australians play sports twice or more per week, we’ve got why income protection can be useful if you play football.
