Income protection insurance is one of Australia's major types of personal insurance available
. It typically pays up to 75% of your income should you fall ill or become injured.
Income protection insurance Australia cost factors
Premiums will vary between life insurance companies depending on your situation.
These premiums are affected by a number of factors, and these factors should be taken into consideration when comparing policies.
Here we have listed a few considerations for you to take into account when looking into this type of cover.
1. What type of income protection policy in Australia should you choose?
There are two main types of policies available in Australia. You can a choice of choosing between an agreed value policy or an indemnity value policy. There are differences to each type, and both come with pros and cons depending on your particular situation.
For example, an agreed value policy might be more suitable for a self-employed person whose income is more likely to fluctuate.
2. Which income protection 'waiting periods' are available in Australia?
The waiting period refers to the amount of time you are willing to wait until your benefits start being accrued to you. The standard waiting period is 30, 60 or 90 days, however you may extend this out to 180, 360 or 2 years as this suits.
The main rule of thumb in determining which waiting period is best for you, is to calculate the days of sick leave you have, plus the amount of savings you can use to live on.
3. How long should your 'benefit period' be?
The 'benefit period' outlined in your policy's product disclosure statement (PDS) refers to the maximum length of time you can claim on your cover. This length of time is usually 2 years, 5 years or up to 65 years.
Advice on income protection Australia
If you need advice besure to speak to a qualified financial adviser. An experienced financial adviser can compare income insurance and offer free quotes.