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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.

Backed by TAL

^Insuranceline Win 1 of 5 $1000 Visa Cards (Competition). Subject to the Terms and Conditions, the Promotor is offering customers a chance to win one of five Digital Visa Gift Cards valued at $1,000, in one of the four draws. Entry commences on the 1st of April 2024 and will run for four months until 11:59pm AEST on the 31st of July 2024 (Entry Period). During the Entry Period, to be eligible to participate in the Competition, customers must get a quote and take out a new Insuranceline Life Insurance, Income Protection Insurance, or Funeral Insurance policy to enter the Competition. A maximum of one (1) entry into the Competition will be awarded per eligible policy. The Promotion is not open to existing customers, or customers who have cancelled a Promoter branded policy in the 12 months prior to the commencement of the Entry Period and then taken out a new Insuranceline branded policy. Each of the four Prize Draws will take place at Level 16, 1 Denison Street, North Sydney NSW 2060 on the respective Prize Draw and Time, as listed in the table in Condition 13 (and if any Redraws if there are any unclaimed prizes, Condition 19) of the full Terms and Conditions, and the winners will be sent an email and will be attempted to be notified via phone within two (2) business days of the Draw and published on Max. retail value of the total prize pool is $20,000. To be eligible at time of the draw, customers must still have an active policy and have paid 1 month of premiums in full. View eligibility criteria and full terms and conditions here. Promoter: TAL Direct Pty Limited ABN 39 084 666 017 AFSL 243260. Permits: NSW NTP/09255, ACT TP24/00483, & SA Licence No. T24/388.

**Bonus 10% more cover is calculated on the fifth anniversary from the Policy Commencement Date. Each adult life insured will have an extra 10% of the average Funeral Insurance Cover amount held during the previous five years added to their Funeral Insurance benefit. Terms and conditions apply. Refer to the PDS for more information.

#Claims paid figures relate to all Insuranceline life insurance policies in the 2021 financial reporting year (1 April2021 to 31 March 2022). All claims on Insuranceline policies are assessed against the relevant policy terms and conditions. These terms and conditions, as well an explanation of the claims process, can be found in the applicable Product Disclosure Statement. Claims are administered and settled by the insurer, TAL Life Limited.

***Insuranceline is the longest standing provider of Funeral Insurance in Australia, based on: Strategic Insight, Actuaries & Researchers. Funeral Insurance means a policy with periodic premium payments that provides a lump sum to help pay for funeral and associated expenses when you die and excludes pre-paid Funeral Plans and Funeral Bonds.

The information provided on this website is general advice only which means it does not take into account your individual needs, objectives or financial situation. For this reason, you should consider whether it is appropriate for you, and before you decide to buy or to continue to hold an insurance product, you must read the relevant Combined Product Disclosure Statement (PDS) and the Financial Services Guide (FSG). The PDS/FSG contains important information which will help you understand the product, including what's covered and what's not covered and to decide whether it is appropriate for you. The Target Market Determination (TMD) for the relevant product, where applicable, is also available.

If you are considering cancelling a policy you already hold in order to replace it with a new policy, make sure you read the terms and conditions of both policies before you make a decision. The cover terms may be different, you may lose benefits accrued under your existing policy, and waiting periods may apply to the new policy. Changes in your personal circumstances (such as your age, health, and employment) that have occurred since your existing policy was originally taken out may also affect your new policy. As your application for a new policy may not be accepted, and some policies may be unable to be reinstated after they have been cancelled, you should consider waiting until your new policy is confirmed before you cancel any existing cover.

Promoted by Insuranceline, a trading name of TAL Direct Pty Limited (of Level 16, 363 George Street, Sydney NSW 2000) ABN 39 084 666 017 AFSL 243260. TAL Life Limited ABN 70 050 109 450 AFSL 237848 issues the life insurance benefits. St Andrew's Insurance (Australia) Pty Ltd ABN 89 075 044 656 AFSL 239649 issues the Involuntary Unemployment Cover.

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