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Planning • 3 min read

Is Income Protection just for high income earners?

There’s a common misconception that Income Protection Insurance is only available to those in higher income tax brackets. But this couldn’t be further from the truth.

There's a common misconception that Income Protection Insurance is only available to those in higher income tax brackets. But this couldn't be further from the truth.

What is Income Protection Insurance?

Income Protection Insurance can help safeguard your quality of life and provide an alternate stream of income if you are unable to work for an extended period due to illness or injury.

Replacing part of your lost income when you can’t work due to illness or injury with Income Protection Insurance can give you much needed peace of mind. There is no stipulation on how to spend the money you receive. It can help you stay on top of bills and expenses by paying off childcare, school fees, mortgage repayments, rent or other regular payments.

Do I need Income Protection Insurance?

Income Protection Insurance can be particularly important for you if you’re self-employed or a small business owner, as you might not have sick or annual leave to fall back on when you’re ill or get seriously injured.

If you have other family members who rely on your income, such as kids who need to be put through childcare and have school fees that must be paid, then ensuring that you have an alternate stream of income when you can’t work due to illness or injury can save your family from financial stress.

Income Protection can also be a good safety net that protects you and your family from unforeseen circumstances in the future. You might be young, healthy and fully fit now, but you can’t control everything that happens in life. So, having a plan in place when you can’t work for an extended period due to illness or injury can be a good idea.

Is Income Protection Insurance worth it?

One of the biggest myths surrounding Income Protection Insurance is that only high-income earners need it. However, that’s not true. Regardless of how much you earn or what life stage you’re at, the loss of your income can have a huge impact on your ability to live your life and pay your bills.

Think about how you and your family would cope if you were unable to bring home your regular income for an extended period. How would you stay on top of outstanding bills and regular payments?

Insuranceline Income Protection covers 75% of your average monthly income, up to $10,000 a month, to help you stay on top of bills and expenses. With cover available for as little as $7.45/week*, financial peace of mind is within reach regardless of what you earn and doesn’t have to pinch your wallet.

How much Income Protection Insurance do I need?

How much Income Protection you need depends on your circumstances. Everyone’s personal requirements will be different. But, a good starting point is to prepare a household budget. This will help you see your monthly expenses and the income you'll need to replace. You may want to factor in making payments to your super as well.

You can also speak to a financial adviser to find out what level of cover is right for you.



* Based on a 35-year-old male, non-smoker, blue-collar occupation on standard rates, with a $3,750 benefit amount, 6-month benefit period and 90-day waiting period when paying annually (total annual premium of $387.50). Premiums depend on cover selection, benefit period, Claim Waiting Period, occupation lifestyle, and health at application.

 
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