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Income Protection Insurance – Protect your most valuable asset
INCOME AND FUTURE EARNING CAPACITY IS OUR GREATEST ASSET
A regular wage or salary provides a steady cash flow to pay bills, make mortgage repayments and lay the foundations of future wealth.
When we think of our most valuable assets, our home, super or other investments often spring to mind first. Yet our ability to earn a regular income is probably the most important asset of them all. Having that income cease due to illness or injury would severely impact most people’s lives. That makes income insurance a vital part of a sound wealth creation plan.
DOES EVERYONE NEED INCOME PROTECTION?
As long as you rely on your income to maintain your lifestyle and pay your expenses then there is always going to be a need to protect it regardless of what you earn.
- A 30-year old worker earning an annual income of $85,000 can expect to receive lifetime earnings of $2.2 million after tax by age 65.
- Every working Australian has a one in three chance of becoming disabled for more than three months before reaching retirement age.
- Workers Compensation will only cover you for accidents or injuries that occur during work hours or for an illness that is a direct result of your employment.
Source: Lonsdale Financial Group, Rice Warner Actuaries May 2011, Zurich Financial Services Australia
PROTECTING YOUR ABILITY TO EARN AN INCOME CAN BE EASY
There is a cost effective and simple way to protect you and your family from the financial hardship that follows a loss of income. Income Protection Insurance replaces up to 75% of your income (and 100% of your superannuation contributions) while you are unable to work at your full capacity due to sickness or injury. This insurance enables you to continue to pay rent, make mortgage payments, cover living expenses, pay for vital medical expenses, as well as continue to save for retirement.
You can avoid the financial stress of drawing down on assets or taking on more debt simply by taking out income protection. Income protection can be easily purchased either inside or outside of superannuation. By purchasing income insurance through your super fund, the premiums are cost effective and the process of arranging cover is simple and streamlined.
CASE STUDY: INCOME INSURANCE SAFEGUARDS YOUR FUTURE
Annabelle was 40 and working in hospitality when she broke her leg in a skiing accident. Unfortunately Annabelle required surgery and was off work for nearly 3 months.
Despite her holiday and sick pay Annabelle still needed to fund the remaining 8 weeks that she was without income. With living expenses, medical bills and her mortgage, Annabelle was greatly out of pocket.
Although she had insured her car, house and furniture, Annabelle had failed to insure her most important asset – her ability to earn income.
Many of us take our income for granted. Your income may stop but the regular bills don’t and that’s where income insurance plays a vital role in your financial wellbeing. It offers protection from the financial hardship that may arise if your income were cut short.
If you don’t have income protection you could easily find yourself in serious financial distress like Annabelle. Source: BT Market Insights
Bell Partners Financial Services can help you get the cover you and your family need.For more information on income protection insurance or to make an appointment for a full risk review please phone Nick Thomas or Justine Hendry on 9832 8453.