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Archive for income protection insurance

Tips for Choosing the Best Income Protection Insurance

Why you may need income protection insurance and how to decide which level of cover you want.

If you are like most of us, you work for a living. Your income and livelihood depend upon being able to work every day. Most of us take it for granted that we will continue to be able to get up and go to work tomorrow and for many tomorrows to come. But what happens if you get sick or injured so badly that you can no longer work?

Choosing the Best Income Protection Insurance

Who is going to pay your mortgage repayment? Your car payment? Who is going to buy food and pay the utility bills? If you have income protection insurance, you may receive up to 75% of your weekly income while you are unable to work. There are many different levels of coverage available, with the cost of the policy generally rising as the length of cover does.

How is Income Protection Insurance Different?

Income protection cover provides regular payments if you become unable to work. This helps you meet your monthly expenses. Life insurance pays your beneficiaries: not you. Total and Permanent Disability only pays when your disability is permanent. Trauma insurance pays for specific events or illnesses.

Income protection cover makes sure that you don’t “fall through the cracks” of your other insurance covers.

How do You Choose the Best Cover?

Your options will be based on a number of metrics such as age, smoker or non smoker, risk factor involved in your occupation and even gender. You will be presented with a series of options based on those factors. Then it will be up to you to determine your level of cover. You will choose based on how much you wish to spend.

Talk to a Professional Financial Planner

The best way to choose is to talk to a professional financial planner in Perth who can help you figure out what you can afford to spend on insurance without detracting from investments or lifestyle.

Call 08 6462 0888 today.

Fast Facts: Income Protection Insurance

A basic guide with facts that can help you compare income protection insurance.

Income protection insurance is designed to help provide funds for you and your family in case you are unable to work for an extended period of time. Illness or injury can create a lot of unanticipated expenses, compounded by the fact that you are unable to produce income. You may have to take part in expensive rehabilitation and even reformat your home to make allowances.

Facts About Income Protection Insurance

Your spouse may have to take time off work to assist you in your recovery or you may have to hire a full time nurse. In addition, your daily household expenses are still there, such as groceries, utility bills, mortgage repayments and car loan repayments. With no income, this could be crippling to your finances. Luckily, protection is available in the form of income protection insurance.

The Elements of Income Protection Insurance

To compare income protection insurance policies, you need to know some basic facts. There are two main points that you will compare: the amount or percentage of your income that you will want to receive if you are unable to work for an extended period of time and the length of time you would like to receive it.

In most cases, the more and longer your compensation, the higher your premium. A majority of policies are written for 75% of current income with compensation periods lasting from two to five years. Some policies also allow the insured to receive benefits until the age of 65 if necessary. No two situations are alike, so you should contact one of our insurance professionals or financial planners in Perth for an individual consult.

What to Look For

When comparing income protection insurance policies, it is wise to take your individual needs into consideration. While we will be happy to help you figure them out, it is also helpful if you have given it some thought before you consult.

Call Approved Financial Planners

Call Approved Financial Planners today if you would like to compare income protection insurance policies. 08 6462 0888.

Income Insurance for Subcontractors: What You Need to Know

Why income insurance is an important part of protecting a subcontractor’s assets.

Subcontractors find themselves in a unique position. They don’t have a boss or a regular paycheck, meaning that they don’t have access to workers’ compensation or sick leave. If they become too sick or injured to work, they don’t have a financial “cushion” upon which to lean on. That is why many purchase income insurance, or “income protection insurance.”

Income Protection Insurance for Subcontractors

How Income Protection Insurance Works

Simply stated, if you are hurt or ill and unable to work, income protection insurance can replace as much as 75% of your income until you are able to go back to work. This comes in handy for feeding your family and paying bills while you are unable to produce income through working.

Every income protection insurance policy has three parts:

Benefit Amount

This is the amount of money you will be able to collect if you cannot work. Usually, it is 75%, but some people opt to save money in premiums by decreasing the benefit amount.

Waiting Period

This is the period of time from when you are unable to work until you are allowed to start collecting your benefits. Typically, this works out to thirty days.

Benefit Period

This is the amount of time you can be out of work and still collect money. Most policies are written with a benefit period of between two and five years. Some are written with a benefit period that lasts until age 65.

Why “Subbies” Purchase Income Protection Insurance

As mentioned above, must subbies don’t have access to any kind of compensation if they are injured or sick. Even those who have saved up a tidy sum of money can run through it a lot faster than they thought if they are suddenly out of work for an extended period of time.

Income protection insurance has emerged as one of the more popular ways for a subbie to protect themselves in case of illness or injury.

Call Approved Financial Planners

If you are a subcontractor in Perth who would like to learn more about income protection insurance or other alternatives, call Approved Financial Planners on 08 6462 0888 for an individual, no-obligation consultation. You may or may not opt for income protection insurance, but it pays to know your options.

Wishful Thinking Best Left to Others: Don’t Skip Income Protection

Why best case scenarios concerning income fail to protect your interests.

What is your biggest asset? Your home? Your business? Your yacht? No matter how many assets you have amassed, your biggest asset is your ability to earn income. Without the ability to earn income, the other assets are not possible unless you already have more money than you can ever spend.

Don’t Skip Income Protection

Therefore, it is important to protect your biggest asset with income protection. Income protection cover protects you in the event you are unable to work due to injury or illness. Usually, it pays around 75% of your income until you can get back to work. Income protection cover is tax deductible and you can spend it on whatever you choose to spend it on.

Determining the Cost of Income Protection Insurance

Numerous factors go into determining the price of income protection insurance. Whether or not you smoke, your age, your gender, your occupation, your health, your income and the amount of desired coverage are all factored in to the price. Most people choose a financial planner to advise them on how much cover they need.

Why Income Protection Cover is Important

Income protection insurance fills in the gaps that other coverages leave out. For example, a standard sick leave entitlement may be 12 days a year that you can take off due to illness or injury. Workers Compensation covers you for injuries but not illness. Private health cover helps defray medical expenses and hospital stays, but doesn’t cover incidentals such as mortgage repayments, electric bills and food. In most cases, Government disability insurance won’t pay nearly enough to sustain your current lifestyle.

Call Approved Financial Planners

At Approved Financial Planners, we provide a full range of services in the Perth area, including financial planning and insurance. That means that we can advise you on how much insurance cover you need and provide you with insurance from a respected and reputable company.

We also offer other services, such as retirement planning, establishment and maintenance of superannuation funds and self-managed superannuation funds, wealth protection, investment planning, estate planning and a plethora of business solutions.

For help from financial planners and insurance consultants who care about you, call (08) 6462 0888.

Comparing Income Protection Quotes: Know the Pitfalls

Many Australians purchase income protection insurance and think they are fully covered, only to find out that their policy only provided partial protection and that they don’t have enough to cover all of their expenses. While it’s great to compare policies, a lot of people look for the wrong things and end up making bad choices.

Here are some pitfalls of comparing insurance protection quotes.

Comparing Income Protection Quotes: Know the Pitfalls

Limited Payment Periods

If one is permanently disabled and can no longer produce income, they would expect to be paid for the rest of their lives. However, many policies cap payments to periods of one or two years. We won’t recommend any particular length here, but be sure that you know exactly how long you will be paid in the event that something terrible does happen to you and you can no longer work.

Note that payment is often capped depending upon occupation.

Payment Period Differentials

This is a partial version of limited payment periods. The company pays different lengths of time for different conditions. An example would be paying lifetime benefits on accidents but only two years on illness. If your policy has differentials, make sure that you know exactly what is defined as “illness” and what is defined as an “accident.”

Also, beware of “secondary disabilities” which are caused as a consequence of the original problem. This may not be included in your cover.

Non-Renewable Policies

Imagine paying premiums for years, only to be told you are no longer eligible for insurance. This can happen with some policies. Some plans are renewable and some are not. It is helpful to know the difference.

Non-Indexed Plans

Some plans are indexed to inflation, while some are not. Inflation has historically happened nearly every year; there is no reason to believe that it won’t continue to be an issue.

Limiting Definitions

Many policies limit the definition of disability by excluding those who can physically work in their profession but only on a part time basis. If your policy has an income-based definition, you can be compensated based on your ability to earn.

Call the Professionals

At Approved Financial Planners, we make sure that you know exactly what you are getting, no matter what cover you choose. Save the “surprises” for Christmas and birthdays. Call us today: (08) 6462 0888.

How to Protect Your Hard-Earned Income

Have you ever stopped to think of what would happen if you suddenly had no income for three months? Six months? If the answer to this question disturbs you, it’s time to learn about income protection insurance. Income protection insurance pays you if you are unable to work for an extended period of time. This can help you with expenses that are crucial to keeping your home and providing for your family.

Income Protection Insurance with Financial Advisors Perth

Who Needs Income Protection Cover and How Does It Work?

We recommend income protection cover for everyone whose ability to support their lifestyle is dependent upon them working to earn income. This can be someone with a small business that depends on their presence to function correctly. It is great for the self-employed and for those whose ability to work depends upon their physical health.

Income protection cover works exactly as one might think. If you are unable to work due to illness or injury, it pays you up to 75% of your current income. Income protection cover is 100% deductible. However, you must pay taxes on your income if you ever need to collect benefits.

Most policies have limits. For example, they will pay you until the age of 60 or for a set number of years. Your premiums may be stepped or level. A stepped premium means that your premium starts out lower and increases as you age. A level premium means that you pay the same amount of money each year. This ends up being more expensive in the beginning and cheaper towards the end.

Other Types of Coverage

We also offer Total and Permanent Disability cover, in which cost of living, rehabilitation and debt repayments are covered in the case of total and permanent disability. Life insurance covers you in the case of death, providing the money for your beneficiaries. Trauma cover provides cover for specific illnesses such as cancer or stroke.

Call (08) 6462 0888 to learn more.