Income insurance a necessary form of cover offered in Australia, which can come to the rescue of those who experience an accident or injury and are unable to work.
What is Income Insurance?
This cover helps protects the injured or ill so that they can continue to receive financial compensation and likewise be able to cover their needs and expenses. While Workers’ Compensation will help cover expenses if one is injured at work, but if an accident or injury occurs outside of work, no such cover is provided. Thus, income insurance is without question a true necessity.
Why is Income Insurance Necessary?
As nothing in this world is certain, there is no way of knowing from one day to the next if one will suffer a serious injury or become ill. Just think for a minute how hard it would be to suddenly be without a steady paycheck. The cost of mortgage, rent, food and maintaining a family would be very hard to cover each month, if not entirely impossible, without a reliable source of income.
Australians insure so many important things, such as their cars, houses and even their health. It is only logical to insure something that is as necessary as a steady income.
What Does Income Insurance Cover?
If an injury or accident occurs and the insured person cannot work, they can receive the due compensation from their policy provider. Depending on the plan one chooses, cover can start within two weeks to two months of the accident or illness.
Those who are employed by a business can often receive up to 75% of their normal salary. For self employed persons, they can receive up to 75% of their normal profits, less the typical amount of expenses incurred. Cover from the insurance company will last until they are able to continue working, or for however long their insurance plan offers it. This can sometimes be for up to 2 to 5 years, or even up until the policyholder reaches 65 years of age.
How Much Does Cover Cost?
Normally, premiums cost about 2% of annual income per year. However, many factors can play a role in the cost of the premiums, including: the age of the holder, gender, if they are a smoker or not, any current health conditions and the occupation of the potential policyholder.
While some may say that the price seems high, the price of going without cover is much higher. Another great advantage of such insurance is that the premiums are tax deductible, making them even more economical.