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 income protection policies.
Here we have listed a few considerations for you to take into account when looking into income protection.
1. What type of income protection policy in Australia should you choose?
There are two main types of income protection 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 income protection 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 Australian income protection insurance ‘benefit period’ be?
The ‘benefit period’ outlined in an income protection policy’s product disclosure statement (PDS) refers to the maximum length of time you can claim on your income protection insurance. This length of time is usually 2 years, 5 years or up to 65 years.
Advice on income protection insurance Australia
If you need advice on income protection insurance Australia speak to a qualified financial adviser. An experienced financial adviser can compare income protection insurance policies Australia and offer free income protection quotes
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Unlike general types of insurance, Personal Insurances vary greatly across the Australian marketplace and therefore it is important to ensure that you have someone on your side who understands the market and who can easily explain your options.Opting for an Income Protection Insurance is the wisest thing to do now in the process of ensuring your future.
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