While many Australians are covered by workers’ compensation policies at their jobs, a growing number are not. With the rise in self-employment, small business ownership, and independent contractors, more and more people are finding themselves with nowhere to turn if they’re suddenly unable to work. An illness, accident, or injury can result in your being unable to perform the functions of your job for an extended period of time, and without workers’ compensation, you could find yourself losing a lot of money. Income protection exists so that you can replace up to 70 percent of your income if any of these events should happen. If you’re considering investing in income protection for yourself, keep reading to learn more about how you can find the best income protection insurance in Australia.
What is income protection insurance?
In case you aren’t familiar with income protection, let’s go over the basics of income protection insurance and why it can be beneficial. Income protection insurance can help you get by in the event that you should find yourself unable to work for one of the reasons covered by your policy. Covered reasons for being unable to work include injuries, accidents, and illnesses. However, there are exceptions to which events fall under your policy. Typically, pre-existing conditions and injuries or illnesses resulting from intentional, criminal or self-inflicted acts, alcohol or drugs, and sports or motorsports are not covered.
Income protection is particularly useful for independent contractors, self-employed small business owners, and anyone else who isn’t covered by a workers’ compensation agreement, according to the Australian Securities and Investment Commission. Workers with a family may also be particularly interested. Some policies include an option for your beneficiaries to collect a lump sum payment in the event that you sustain a permanent disability or pass away in an accident.
How can you find the best income protection insurance in Australia?
Different protection policies offer different levels of compensation. They can vary based on what percentage of your paycheck you want covered, what events you want covered, and what terms and conditions your policy will be subject to. It’s important to read the details of a policy thoroughly before you sign up to ensure that you’re getting the coverage that you want. You can get started by simply searching “income protection insurance Australia” to compare the plans you’re eligible for.
Many people want to know if income protection covers redundancy, and the answer is that it depends. Some policies offer coverage if you’re subject to an involuntary redundancy, but this isn’t universal. Prior to selecting your policy, read over the terms and make sure you understand what you’re covered for and what you aren’t. Income protection also typically requires a waiting period to claim your benefits. This refers to the time that must pass before you can make a claim, and you generally must be incapacitated for the duration of the period. Some policies offer different choices for waiting periods, reflected in the cost of your monthly premium.
Income protection insurance can be a major boon to any worker who isn’t protected by a workers’ compensation policy. Income protection can help you reclaim up to 70 percent of your lost income in the event that you are unable to work for a reason that is covered by your policy. Your level of protection, from the amount of your paycheck that you can recover to the waiting period before you can claim your benefits, can vary significantly depending on the policy you choose. This is why it’s essential that you read the terms and conditions of any policy you’re considering carefully before you sign up. While no one wants to think about being injured or incapacitated, income protection can help provide you with some peace of mind and a safety net in the event that a sudden illness or accident prohibits you from working.