Income Protection

Income protection insurance is designed to replace up to 75% of your income if you become injured or sick and cannot work

Income protection is particularly important as your ability to earn an income is probably the most valuable asset you have. If you were to be injured or get sick and were unable to work for several years, how would you meet your monthly commitments like mortgage repayments, bills and other expenses.

The premiums you pay for this type of insurance are tax deductible to the owner of the policy as an individual or company. You can insure a maximum of 75% of your income although some insurance companies provide booster payments or additional amounts on certain claims that will increase this percentage.

There are several options that will effect the cost of your income protection policy, these are:

Waiting period
The amount of time that you will have to wait after you are unable to work as a result of injury or sickness and before your claim commences. The typical waiting periods are 14 days, 1 month, 3 months, 6 months, 12 months and even 2 years. The shorter the waiting period the higher the premium. With some insurance companies you can also apply for a policy that has a 30 day wait period on sickness but a shorter wait on injury that can be as low as 4 days.

Benefit period
The number of years that your benefit will continue to be paid after you have made a claim. Insurance companies normally offer the choice of 2years, 5 years, and to age 65. The longer the benefit period the more expensive the premium, but being paid to age 65 will give you and your dependants long term security, and remember the premium is tax deductible, so the net cost difference between a 5 year benefit and to age 65 may not be that great.

Business Expense Cover
Business expense cover provides a monthly benefit to reimburse certain business expenses if you are unable to work because of injury or sickness. The type of expenses covered include, rent or mortgage payments, rates & taxes, leasing costs of business equipment, salaries of employees not generating business income, accounting fees, etc.

The waiting period is normally 14 or 30 days and the benefit period is 1 year. The premiums for this policy are tax deductible. If you are in partnership or have co directors the policy will cover your share of eligible expenses.

Features, benefits and price of insurance have gone through considerable change in recent years .There Are also tax and legislative changes that make a regular insurance review even more important Contact us to see how you could benefit from an obligation free review.