There are a variety of reasons why income protection is so important for employees around the world. Here are some key reasons:
- Financial support to cover living expenses such as rent, utilities, food, and car payment
- Additional funding for medical treatment and recovery
- Financial buffer to put in your emergency fund
- To secure family’s financial future such as funding for kid’s education
- Debt recovery for any unpaid loans
Income protection insurance pays up to 75% of your pre-disability monthly income to keep you afloat during tough times If you experience a drop in income or unexpected job loss due to illness or injury.
Importance of Income Protection
Income protection can help you focus on your health and recovery during tough times. It can remove the financial worry and stress that can come with a drop in income, job loss, or illness. This peace of mind can help you focus on getting better and getting back on your feet. Income protection can give you financial security during retirement Income protection can give you a safety net of income during retirement.
What about workers compensation or sick leave?
Income protection is different from workers compensation or sick leave.
Workers compensation is designed to replace a portion of your income if you’re injured while at work. Sick leave is designed to provide income replacement if you’re unable to work due to illness. Income protection is designed to replace a portion of your income if you’re unable to work due to injury or illness, no matter where or when it occurs.
Sick leave is typically given to an employee and the legislated amount of sick leave is currently 10 days a year for full time employee. As a result, in order to receive sick for a substantial amount of time, you will need to have been with your employer for many years. Additionally, you may well use your sick leave for minor issues and ailments that occur through your regular working life and there is no guarantee that you will have sick leave when you need it most.
Workers compensation will only cover you for incidents that occur at work and as a result, you will need to be injured at work in order to make a claim. This does not provide any financial protection for workers if they are injured or become ill outside of work.
Income protection is different as it will cover you regardless of where your injury or illness occurs. This means that you are protected no matter what and ensures that you have a safety net of income if you are ever unable to work.
What is the impact of having both workers compensation and Income Protection?
You may be wondering whether you need both workers compensation and income protection. The answer is that it really depends on your individual circumstances.
If you’re self-employed, then you may not be eligible for workers compensation but you may still want to consider income protection. If you have workers compensation, then you may still want to consider income protection as well given the significant benefits and flexibility an income protection policy provides.
The bottom line is that income protection is designed to provide you with a safety net of income if you’re unable to work due to injury or illness. It’s important to consider your individual circumstances and decide whether income protection is right for you.
Where To Get Income Protection Insurance?
Curo Financial Services offers expert advice on income protection insurance that is customised and 100% tailored to your financial situation and financial goals. Our team has been helping Australians for decades to get the best income protection insurance that aligns to their employment situation and provide comprehensive income protection coverage. If you have any questions, feel free to send us an email at [email protected] or give us a call at 1 300 665 356.
General Advice Disclaimer
General advice warning: The advice provided is general advice only and in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.
