Because you never stop looking after them

Whether you have a partner or children or both, the nature of living in different close relationships means supporting each other emotionally and practically, which usually requires money.

Even if you’re a ‘glass half empty’ type of person, too few of us seriously consider how we and our loved ones would cope if we were unable to earn an income due to sickness or injury. Most think it won’t happen to them. But the reality is, illness or injury could strike at any time.

Insuring your income can be surprisingly affordable and offer you and your family precious peace of mind.

Income protection insurance, also known as salary continuance, generally pays up to 75 per cent of your gross annual earned income in regular payments, to help you cover living expenses such as loan repayments, food, household bills, education and car costs, should you be unable to work.

Cover may even be available through your super fund, offering cash flow advantages as premiums do not need to be funded from your take-home pay. Usually you can choose waiting and benefit periods to suit your needs, and premiums are generally tax deductible. A longer waiting period lowers the premium, so consider your need for access to emergency cash and entitlements like sick leave and annual leave when choosing a waiting period.

It’s important to take a ‘big picture’ view of your insurance – and there can also be cost advantages in bundling cover. Other types of cover include life insurance which usually pays a lump sum upon death or terminal illness, total and permanent disablement which pays a lump sum if you become disabled, and trauma insurance which pays a lump sum in the event of a serious illness, for example.

One of our advisers can help you choose competitive cover including the type of cover and level of cover to help secure a brighter future for you and your loved ones.

Matt & Sarah’s story

38-year-old Matt worked as a builder, enjoyed competitive road cycling, and thrived as a family man with his wife Sarah and three young children. Keeping so healthy and active, Matt felt pretty invincible until one afternoon when he was hit by a car while cycling with friends. His terrible injuries left him bed-bound in hospital, needing rehabilitation and unable to work for over 4 months. Fortunately Matt had income protection insurance that covered much of his family’s day-to-day living expenses until he was back at work.

Otherwise, with a mortgage and very little savings, Matt and his family may have struggled to make ends meet. Income protection insurance freed Matt and his family to focus on improving his health and getting better, rather than having to stress about bills. It also meant they weren’t weighed down with more debt after Matt’s recovery – for example, they weren’t forced to extend their home loan to cover every day costs. This would have had a significant impact on the health and well being of the family.

Download your issue of The Key Spring 2012 Newsletter

Posted in Articles, Newsletters, The Key Newsletter.

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