Protecting yourself from sickness and injury – so you can keep on earning a living.
We help people living with well-managed HIV, diabetes or other complex health conditions get high quality Income Protection cover
Previously, people with complex health needs were excluded from high-quality Income Protection - now that's changed for our clients.
- Income Protection is an insurance cover for one of the most important assets of all – your ability to continue to keep on earning a living.
Explaining Income Protection
Income Protection insurance as the name suggests is designed to protect your ability to continue to earn an income and pay up to 70% (previously 75%) of your income if you're unable to work due to sickness or injury. It can provide cover worldwide 24/7 and can even protect 100% of your employer's super contributions too.
- The waiting period is the number of days before the income benefit payments start. It can be as short as 14 days and can be as long as 12 months (or even more), whatever you choose.
- The benefit period is the length of time you’ll receive payments while you’re unable to work due to sickness or injury. These can often be for set periods of 2 years or more, even up to age 65 (and now in some cases age 70), depending on what you choose.
- The payment method is the way you agree to pay the insurance premiums. These can be from your personal funds, perhaps from your super fund or even a combination of both, depending upon whatever you choose.
There are so many different options available with Income Protection.
Your financial advisor from unusual risks is the expert to best help you understand your options and cut through what can often feel an overwhelming process to find your unique solution.
Our income drives our lifestyle - not just paying rent, mortgages, car loans and credit cards, but living a full and interesting life Drew Browne
Practically speaking - always protect what you cannot afford to lose
Meet Amber and Jenni: corporate professionals who, like most Australians, rely upon their weekly wages to maintain their lifestyle.
Leanne had a back injury that over time deteriorated into a herniated disk in her lower back and she needed to claim upon her income protection insurance.
This is how Leanne's income protection was useful in three different ways;
- While needing to work part time with reduced hours due to the injury, her income protection insurance helped cover the part time loss of wages.
- A year later when the doctors decided a surgical solution was needed and Leanne was unable to work at all, her income protection helped cover the full-time loss of wages while surgery, recovery, and rehabilitation occurred.
- After successful surgery and rehabilitation, Leanne returned to work, initially part-time. Her income protection insurance again helped cover the part time loss of wages until she was able to fully return to work and continue her normal job. At that point, her income protection stopped and life returned to a new type of normal.
Having access to flexible income protection, Leanne was able to take time off work as she needed and have her income continue to meet her mortgage, car loans, manage credit cards and plan a way through with financial certainty.
In an unrelated incident the following year while cleaning a blocked gutter in the rain, while standing on a wheelie bin, Leanne slipped and broke her leg and was off work again - and her income protection commenced again as it was needed.
Why you may need income protection
The financial engine of our lifestyles is our continuing ability to earn our incomes.
Over the course of a lifetime, most people will earn a small fortune (and rely upon their super contributions for their ability to eventually retire).
Protecting your ability to continue to earn an income makes clear financial sense.
It’s especially relevant for:
- Single people who might not have strong family or relationship support
- People in relationships depending upon dual incomes
- People with ongoing debts, like a mortgage, rent, credit cards and personal loans that couldn't be paid if they were unable to work due to sickness or injury.
- People who have regular family expenses like food, household bills, council rates or strata fees, school fees, vehicle costs (and perhaps child support payments or IVF treatment costs) and who don't have immediate access to substantial savings to use to replace their lost income if needed
- People who want an effective backup plan in place if one (or both of their incomes) were to stop due to sickness or injury
A special note for self-employed people
Self-employed and business people have different needs and restrictions on their incomes so if that's your situation, relax, the professionals behind Unusual Risks Insured can talk you through your special options too.
Real Life Statistics
- 20% of all mortgage defaults in Australia are ‘due to illness or accident in household'
(Mortgage default in Australia: nature, causes and social and economic Impacts, Australian Housing and Urban Research Institute, March 2010)
How it works together with other insurance covers
This is how Income Protection works alongsideTotal and Permanent Disability.
- Income Protection insurance is designed to protect up to 70% of your income after a waiting period of your choice, while you cannot work due to sickness or injury.
- TPD insurance is designed to protect against long-term disability and pay a lump sum after 6-month wait if you become permanently disabled, as defined in the policy and you can no longer work in your current occupation.
- Crisis Recovery insurance is designed to pay an immediate lump sum to help offset short-term unexpected medical expenses should you suffer a medical crisis specified in the policy, to help stabilise debt obligations and personal cash flow.
Together they can protect you against short term interruption in your ability to go on earning your income and long term permanent disability when you meet the conditions of both insurances you can receive both benefit payments
Questions people ask about ...
Income Protection Insurances
Take a look at some quick questions people ask about Income Protection Insurance.
What is it?
Income Protection Insurance provides a regular payment in place of your income if you’re unable to work for extended periods due to injury or illness.
- Income Protection can protect up to 70% of your earned income if you're sick or injured and can't continue to work in your current job.
How it helps you?
Income Protection can help get you through a difficult period, without having to eat into your savings or rely on outside help – so a temporary setback to earning your income doesn’t put you behind for years.
What's the chance of needing it?
- There is a 1 in 4 chance of needing to claim for Income Protection insurance during your working life.
It can pay you for as long as you remain temporarily disabled and unable to work, as specified in your policy and depending on the policy, can also replace your super fund contribution, so your retirement savings can keep growing even while you’re unable to work.
Do I need Income Protection insurance?
Most probably, Yes.
You have a 1 in 4 chance of being off work for at least 3 months due to sickness or injury before you reach age 65 and most people do not have sufficient liquid assets in an emergency fund to replace their income (and continue to pay their regular bills) for more than 30 days.
When you start thinking about Income Protection insurance, you're also protecting your ability to continue to receive an income until you either recover or retire.
How much does it cost?
The cost of Income Protection insurance is based on a range of factors: your age, gender, smoking (and vaping) status, current health, lifestyle, and general occupation.
How do you pay for it?
Income Protection insurance premiums can be paid monthly, half-yearly or yearly by direct debit and may be tax-deductible.
You may even be able to have the premiums paid from an existing super fund or SMSF as an automatic partial rollover, in certain circumstances.
How much Income Protection cover do I need?
You can choose up to 75% of your earned income How much cover you need depends upon your ability to meet your own ongoing living (and perhaps Rehabilitation) costs, the degree to which you depend upon your income and who depends on you financially.
Can they cancel the policy on me if I get sick?
No. A Guaranteed Renewable Income Protection policy obligates the insurer to continue coverage as long as premiums are paid on the policy, regardless of changes in the policy owner's health or occupation.
Can I upgrade the policy as I need later?
You can always apply to upgrade an existing policy to a higher level of cover when you're verifiable income increases beyond 75% of your current in force policy.
Do I have to update them about changes in my health?
No. There is no requirement for you to update a life insurance company about any changes in your future health.
Once an Income Protection Insurance policy is in force, any future changes in your health (or even your occupation), will not affect your cover while the policy remains paid up and in force.
Where to Now?
Continue your journey…