What is your most valuable asset? Is it your $500,000 house? Is it your car?
In fact your most important asset is your capability to obtain an income.
You or your family’s lifestyle & financial future depend upon it.
If a sudden accident or illness occurs, how can you carry on financially?
What is Income Protection Cover?
Income Protection Cover can protect up to 75% of your earnings due to accident, illness or mental health such as depression and anxiety. This cover can assist you and your family to maintain your lifestyle until you are back on your feet.
2.6 million Australians aged 65 or under are living with a physical disability.i
There are 1/3 Australians at risk of being diagnosed with some sort of cancer before the age of 75.ii
Out of the 690,000 Australians that were in an injury at work between 2005 – 2006, 43% did not receive any financial support.iii
In Australia, 3/5 people will be disabled for more than one month during their working life.iv
More than 25% of Australians will be disabled for more than three months during their working life.v
Without the ability to earn an income, debts and bills can be a lot more stressful than you think. How long do you think you can continue covering your expenses until you totally empty out your savings?
An illness doesn’t have to affect you financially. Income protection will compensate you for any time taken off work however many Australians don’t seek protection because of some common misconceptions until an accident or illness occurs.
“I’ll be covered under Workers Compensation”
Workers Compensation is very limited. It only applies if you are injured at work during working hours or for illness directly resulting from your employment. If you’re self- employed, there is a good chance that you may not even have this cover.
“I can’t afford it”
Income Protection premiums are tax deductible and can cost as low as less than $4 per day.
What do the payments protect?
Income protection gives you a monthly benefit to assist you to keep on track with debts, medical bills and generally maintaining your lifestyle until you are back at work.
Mortgage repayments; there will be funds available to protect the family home.
Day-to-day expenses: Everyday bills can build up fast. Without being able to earn a steady income, this payment can help cover everyday living expenses such as food, utility payments, clothing and schooling.
School fees: With income protection, you can continue to send your children to the school of your choice.
Additional care: Disabilities will need extra care or assistance around the house. Ongoing payments can support to cover this any potential disabilities that may exist.
Rehabilitation: In some cases rehabilitation is needed in order to get back to work. Ongoing payments will assist you to afford this.
Retirement savings: There are options to choose that will allow you to cover up to 75% of your earnings, to help maintain your retirement goals.
What are the cover features?
These are just some of the features you can expect to have with your Income Protection Cover:
Tax deductible premiums: Income Protection Cover premiums are mostly tax deductible, allowing cover to be easily affordable.
Partial payments: if you can return to work part-time, you can be given a partial monthly payment to assist you until you can return to full time employment.
Additional benefits: a range of additional benefits let you customise the policy to suit your lifestyle.
What are the cover options?
Below are just a few of the options you can expect with your Income Protection Cover:
‘Agreed value’ or ‘Indemnity’:
>Agreed value’ will pay the pre-determined sum insured regardless of what your income is at the time of claim.
>‘Indemnity’ cover will pay the lesser of your sum insured or income at time of claim.
A choice of waiting periods: you have the option to choose how long you have to wait before receiving your monthly payment benefit after lodging a claim.
Benefit periods: this is the duration of how long the claim is paid for. You can choose your benefit period from either two, five years or to age 65. The payment is paid until the date of returning to work or the chosen period above, whichever is earlier.
Extra options: the Retirement Protection Option will protect your super contributions in the incident of you lodging a claim.
Inside or outside super: You may be able to structure your Income Protection Cover inside super and pay premiums using pre-tax dollars. There are often restrictions with this structure, so it’s important you talk to one of our financial advisers for further information.
Choice of premium options:
>‘Stepped’ premiums increase on a yearly basis in line with your age
>‘Level’ premiums remain the same until age 65 (at this point, they then convert to Stepped).
Causes Of Claim
How do I get protected?
One of our financial advisers can help tailor the right level of cover for your needs.
Save yourself one less worry and contact one of our agents today or request a quote from us.
i AIHW (2008) Australia’s health 2008, Cat. no. AUS 99, Canberra
ii AIHW (2008) Cancer in Australia: an overview 2008, Cancer series no. 46, Cat. no. CAN 42, Canberra
iii ABS (2007) Australian Social Trends 2007, Cat. no. 4102.0, Canberra,
iv Fabrizio, E (2007) Australia & NZ Disability Income Experience www.actuaries.org/IAAHS/Colloquia/Cape_Town/Walker_-_Income_protection.pdf
v AIHW (2008) Cancer in Australia: an overview 2008, Cancer series no. 46, Cat. no. CAN 42, Canberra
The most common TAL Income Protection claims conditions in 2011
TAL Income Protection claims in 2011