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Income Protection Insurance

Insurance for something that can’t be seen or touched, such as income, may seem strange. But how is the mortgage repaid when it comes to illness or injury?

When considering insurance, it’s common for people to pass it off as a pesky added fee involved in owning a car, running a business or protecting a house against damage. Income insurance can seem like another expensive precaution that’s unlikely to prove useful.

But remembering that your income facilitates your lifestyle, it’s inexplicably the most important thing you can’t afford to lose. Cars and houses can be replaced, but losing an income, perhaps for life, could see you lose everything!

Income protection insurance covers salary loss due to injury or sickness. Unlike workers compensation, it applies to injury or sickness no matter where you are or when. And, unlike government allowances, it pays in accordance to your earning capacity.

If someone is injured under a worker’s compensation scheme, they receive a higher rate for the first few weeks, but then it drops. So people’s standard way of living is sacrificed if they depend on this form of protection.

Income protection policies vary in regards to their terms and conditions, but they can offer up to 85 per cent of gross wages for a maximum time period. It’s a form of insurance that is particularly important for people who have regular repayments to make against debts.

The most important reason for income protection is when a person has a strong reliance on an income. When there is someone with financial responsibilities, like a family or a mortgage, that’s an important time for income protection.

Having a majority of your current income insured against the possibility of being away from work helps you avoid defaulting on any or all of your liabilities.

It can be the difference between continuing along within your current lifestyle following illness or accident, or being forced to dramatically change your lifestyle due to an inability to maintain your repayments.

One of the greatest benefits is that income protection insurance premiums can be paid from your super fund. Which means that you do not have to adjust your current budget in order to get it right now.

I have always recommended income protection insurance for my clients and Craig Small at Evolution Wealth ( is who I recommend for my clients.

Do you need advice? Call Chris today on 0490 075 039 or send an email to

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