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Income Protection Insurance

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Does anyone here have/use this at all?

I never really looked into it, but last 3 weeks I had a unexpected trip to china which led to coming back with a nasty flu,

Being on meds I am not allowed to work as I over look anywhere from 1-100 workers for safety matters in a very high risk job, Based on a casual pay but perm full time I missed 2 weeks work plus a week for my trip.

Being out of pocket for loss of income of $5000 as taken a small toll on my cash flow, Now it got me thinking what if I got sick for 3 months? There is no way I could cover the house repayments and investments and living costs. And or if any medical bills on top of that.

 

If you do have it, what does it cover? how much does it cost? etc

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I've had nerve problems from a bulged disc and knee bursitis. as a tiler it has almost been career ending.

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Generally speaking there are a couple of different ways that you can protect yourself:

 

Life / Total and Permanent Disablement (TPD) Cover - This will pay out a lump sum to either yourself or your beneficiaries if you get killed. ie if there is one major breadwinner in the family this can ensure that the other partner/kids are covered. This is also the most common type of cover and is often included at a basic level in your super.

 

Trauma Cover - Similar to Life/TPD except that it costs more and will pay out for non fatal things like a heart attack, cancer etc that may not be 'permanently disabled'. It is designed to help offset the time off work as well as medical expense.

 

Income Protection Insurance - This covers a broad range of things that prevent you from working. If you get laid off or fired, get sick injured it pays you a stream of payments that are usually calculated as a percentage of your salary until you are at retirement age.

 

The cheapest cover is life/TPD then Trauma which is like an extra you ad to the life/TPD and the income protection will be the most expensive.

 

The actuall cost of each will vary depending on the amount you want to be ensured for and a heap of other factors like age, sex etc...

 

Most covers won't pay out for existing conditions and you aren't usually covered for things like suicide for ~12 months.

 

Heaps of sharks out there trying to sell all these things to you, main thing is if you don't understand it don't buy it...

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I have a long term protection of income via my incolink scream, But if I claim I have to be off work for a set amount of time etc. I just want something I can handle myself and get a weeks pay if I'm sick etc.

So just a short term smaller protection of income style thing.

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See if your super provides it as well.. This can have advantages as it can be cheaper due to the fact you may be paying less tax on the $$ that is going into your super. Compare the price and cover of a few different policies though

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depending on what type of income protection you choose, they have different terms of use against them.

 

i have just been looking into it my self.

 

they usually wont pay out unless you have been off of work for 30+ days. then its a monnthly / weekly payment.

 

read teh fine print ;) they usually only keep that cover stuff for pretty extreme circumstances ie, bad car crash, off work for 2 months etc etc.

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Not income protection but i have Loan Protection with the anz. I have consolidated my debt into one loan so if i do lose my job or become incapacitated they will cover me for up to 3 months (from memory) until i can afford the repayments.

 

http://www.anz.com/p...oan-protection/

 

Hey mate, I believe that the loan protection insurance is effectively a form of life/TPD insurance with the amount equal to the payout figure of the loan. I would be surprised if it actually covered 3 months of payments if you lose your job.

 

Most banks will give you a 3 month window where you aren't required to pay if the account is in good standing... You still get charged interest on the balance...

 

EDIT: Just read the PDS and you are right it covers for involuntary unemployment for 120 days, I don't like that 'Through no fault of your own' clause though :D

Edited by Kez180

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See if your super provides it as well.. This can have advantages as it can be cheaper due to the fact you may be paying less tax on the $$ that is going into your super. Compare the price and cover of a few different policies though

 

Income protection insurance premiums are tax deductible which contrasts with Life/TPD/Trauma cover which is not. If you don't want the Income protect but you want some tax benefit you can purchase an insurance policy through your super fund and then make additional contributions to cover the premium, essentially creating a tax benefit. (ie income taxed @ 15% instead of your marginal rate on the additional contributions to the super fund) Beware of the max contribution caps as well..

 

Once again if you don't understand how something works don't buy it/do it...

Edited by Kez180

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I have income protection insurance as the bank pretty much makes you sign up for it when you get a home loan. It pays out a percentage of your regular income if you suffer a severe accident. It's like $10 a week.

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Does anyone here have/use this at all? I never really looked into it, but last 3 weeks I had a unexpected trip to china which led to coming back with a nasty flu, Being on meds I am not allowed to work as I over look anywhere from 1-100 workers for safety matters in a very high risk job, Based on a casual pay but perm full time I missed 2 weeks work plus a week for my trip. Being out of pocket for loss of income of $5000 as taken a small toll on my cash flow, Now it got me thinking what if I got sick for 3 months? There is no way I could cover the house repayments and investments and living costs. And or if any medical bills on top of that. If you do have it, what does it cover? how much does it cost? etc

 

Without being specific Damo, there are a huge amount of products (for income protection/salary continuance) that offer different levels of protection/cover/benefit/waiting periods. In general terms, from the information that you've provided, you could assume premiums will be on the higher end of the scale (high risk occupation etc.) or you may be considered as "uninsurable". That being said, there are a large amount of factors that are considered/influence the premium.

 

If you already have a financial planner I would suggest speaking to him/her. If you don't, I'm willing haha.

 

See if your super provides it as well.. This can have advantages as it can be cheaper due to the fact you may be paying less tax on the $$ that is going into your super. Compare the price and cover of a few different policies though

 

Again in general terms, income protection/salary continuance premiums are generally tax deductible when the cover is external of super (super holds its own concessional tax status of course). Kez180 was kind of on the right track, but there are benefits either way, obviously depending on your own specific financial situation of course.

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I got AMP income protection only problem is they made an exception if I hurt myself at the track they won't cover it..

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Generally they cover 75% of your income and up to 5 years cover but you can apply for more and they can sometimes arrange it at an extra cost. I think there's a 30-60 day wait period so I'm not sure whether you're paid in arrears or if that means you need to support yourself for that period. Call your super fund, hassle them for some answers.

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I have it on my super, im just after a short term plan. Not if I lose a leg or break my back. Just something to cover a week long flu, or short term leave due to a medical factor that prevents me from working, with out a 12 week wait etc.

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Combined insurance

 

They do short income protection

 

They do short income protection

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I have it on my super, im just after a short term plan. Not if I lose a leg or break my back. Just something to cover a week long flu, or short term leave due to a medical factor that prevents me from working, with out a 12 week wait etc.

 

Mate it strikes me that actually insuring yourself for that might be a bit excessive. What if you just start putting a couple of hundred dollars a month away in a savings account? The only issue would be what would happen until you could save a bit up....

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That would be logical, but when I build up some savings it gets lumped onto the house, I want it for a piece of mind knowing a weekly income is there no matter what

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Do you have an offset account? That'd let you get ahead on the home loan and still have access to the money for an emergency... it wouldn't be income, but also you wouldn't be paying a premium...

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Do you have an offset account? That'd let you get ahead on the home loan and still have access to the money for an emergency... it wouldn't be income, but also you wouldn't be paying a premium...

 

This.

 

I'm amazed that so many people don't use an offset account.

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Yes I use one, but my own home loan isnt a problem as they repayment for that is low. Its other things I want to be sure is covered.

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Yes I use one, but my own home loan isnt a problem as they repayment for that is low. Its other things I want to be sure is covered.

 

Mate, just go and see a financial planner, just take everything they say with a grain of salt as the qualifications you need to give 'financial advice' are pretty woefully inadequate...

 

The reason I say that is they'll have all the insurances you need available for sale...

 

The FP will either charge you a plan fee upfront, take a commission on the insurance or a combination of both. If they say it is free they are getting kick backs from the insurance...

 

People will insure their house and car, but when it comes to their health and income they never have their shit together. Like you said previously, if they get too sick to work having the house flood insured won't mean that they can keep it...

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I would if I had some spare time, Working every day 14 hours a day makes it hard Kez :P

I would have pm'd you but I was on my phone at the time. heath insurance and income insurance is a important item I am now learning in life, How many get away with out is I do not understand.

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my employer seems to have done it for me

 

i received a letter for Insurance Cover for

 

Death

Total and Permanent DIsablement

Income Protection - Up to $1450 per month which covers all my expenses.

 

Costs $5.70 a week...

 

Noticed it was through my super.

Edited by HYPA13

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Yes I use one, but my own home loan isnt a problem as they repayment for that is low. Its other things I want to be sure is covered.

 

Mate, just go and see a financial planner, just take everything they say with a grain of salt as the qualifications you need to give 'financial advice' are pretty woefully inadequate...

 

The reason I say that is they'll have all the insurances you need available for sale...

 

The FP will either charge you a plan fee upfront, take a commission on the insurance or a combination of both. If they say it is free they are getting kick backs from the insurance...

 

People will insure their house and car, but when it comes to their health and income they never have their shit together. Like you said previously, if they get too sick to work having the house flood insured won't mean that they can keep it...

 

Whoa, that's a bit rich coming from a Mortgage Broker. Just kidding, haha.

 

Their's a lot of poor advice handed out these days, and it's predominately as a result of the pitiful education requirements as you mentioned.

Edited by sx_zx

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Yes I use one, but my own home loan isnt a problem as they repayment for that is low. Its other things I want to be sure is covered.

 

Mate, just go and see a financial planner, just take everything they say with a grain of salt as the qualifications you need to give 'financial advice' are pretty woefully inadequate...

 

The reason I say that is they'll have all the insurances you need available for sale...

 

The FP will either charge you a plan fee upfront, take a commission on the insurance or a combination of both. If they say it is free they are getting kick backs from the insurance...

 

People will insure their house and car, but when it comes to their health and income they never have their shit together. Like you said previously, if they get too sick to work having the house flood insured won't mean that they can keep it...

 

Whoa, that's a bit rich coming from a Mortgage Broker. Just kidding, haha.

 

Their's a lot of poor advice handed out these days, and it's predominately as a result of the pitiful education requirements as you mentioned.

 

:D need to update my profile, I haven't been a mortgage broker in years lol....

 

Also I am qualified as a financial planner too, although I did a degree not a two week on line diploma

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I honestly don't understand it. They're heavily regulating the industry, yet all you need is the appropriate RG and you're on your way to be an adviser. Idiots.

 

It infuriates me to think that I spent all that time going through university, when some fool can have a mid-life crisis career change and makes us all look bad. Anyway, that's the end of that rant haha.

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