Income protection


Maintain your living expenses and reduce stress, should you no longer be able to work.

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Do I Need Income Protection Insurance?

Income protection covers you and your family's bills and other costs should you no longer be able to work due to injury or illness. This allows you to maintain your living expenses and reduces your stress levels as you recover. eChoice’s insurance partners are equipped with the skills and experience to ensure that you and your family receive the right level of protection.

The Cost of Income Protection Insurance

Income protection not only covers you for lost revenue, should you become sick, injured or incapacitated, but repayments are also tax deductible. This, for many, makes the cost of income protection much easier to bear, especially when premiums can be higher than life insurance.

Premiums for income protection insurance are typically worked out based on your age, gender, smoking status and occupation. Other factors, such as waiting periods before receiving payment and the duration that your benefit payment spans over, as well as minimum working requirements, may also impact the amount your premium costs.

The Benefits of Income Protection Insurance

Apart from giving you a regular income while you're sick, injured or incapacitated, income protection also gives you peace of mind and added security. This is why it’s important to keep your income protection up to date.

Stop for a moment and ask yourself, what would happen if you couldn't work for two, three or four months? How would you cover the cost of your utilities, groceries, and your rent or mortgage? In most cases, employment leave will only cover you financially for a couple of weeks. After this, you're on your own financially.

Comparing Income Protection Insurance

When comparing income protection insurance, it’s important to determine the coverage of the insurance, and how much your claim payment will be, as well as how much the cost of the insurance premium will change. You are likely to encounter two main types of income protection insurance,

  • Agreed Value: When you apply for your income protection policy you will be asked to submit proof of income. The monthly amount specified on your proof, will then become the value that your insurer will cover. An agreed value policy is usually more expensive as the value of the payout has been pre-set to a specific amount.
  • Indemnity Value: The insured is covered for either 75 percent of the insured's pre-accident or illness income or the monthly amount on the policy document - usually the lesser amount. To determine this value, the insurer will need proof of income at the time of the claim. This is usually determined by the last 12 months of income earned but can vary between insurers.

Tips for Applying For Income Protection Insurance

When applying for income protection insurance you need to consider several aspects to ensure that you get the best cover and an affordable price:

The Cover's Features - Look at and compare pay-out waiting times for claims, the different exclusions for medical conditions and injury, and the cover's terms. Look for a policy that has realistic terms and conditions and that fits you and your circumstances.

Coverage Level - Work out how much cover you need to cover your essential costs. Then make this amount your base coverage level.

Cost - Look at and compare premiums based on the level of cover that you want. Most policies become more expensive as you get older, so you want to make sure that the policy you are looking to take out is affordable now and well into the future.

What Policy Options Do I Have?

Income protection policies can vary greatly depending on the type of policy you have, your insurer and the type of work you do. However, it is possible to tailor an income protection policy to your needs. Some of the options you'll encounter are as follows:

  • Waiting Period - The time that needs to pass before you can make a claim. Some policies have a minimum of 3-6 months, while others can be longer.
  • Policy Duration - How long the payments will continue when you make a claim. Your policy can last as long as you are ill, or for a set period.
  • Policy Type - Two types of policies, an indemnity value or an agreed value.
  • Additional Benefits - Some policies include hospital and accident benefits, nursing care and other forms of support.

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eChoice Insurance is proudly powered by Life Broker, the experts in comparing life insurance products. They compare life insurance policies offered by Australia’s leading insurance companies, to match you to a policy that suits your needs. Life Broker has been in the business for over 10 years, so you can rest assured that an expert will assist you with all the complexities of life insurance with trusted and personalised service.

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Stepped Vs Level Premium A stepped premium starts lower but increases over time and a level premium starts higher but remains the same.