Do I Need Income Protection Insurance?

Income protection insurance is like a safety net if you can't work due to illness or injury. It’s not just for high earners—everyone can benefit from knowing they have financial support when they need it most.

What Is Income Protection Insurance?

This insurance provides a portion of your regular income if you can’t work for an extended time due to illness or injury. Unlike life insurance, which offers a lump sum if something happens to you, income protection gives you a steady income until you’re back on your feet.

There’s usually a waiting period before the payments start, but once it kicks in, you’ll get regular payments to help cover your expenses.

What Does Income Protection Cover?

It helps cover a portion of your income if you’re unable to work due to illness or injury. This can relieve the financial pressure while you recover and focus on getting better.

Can Self-Employed People Get It?

Yes! If you’re self-employed and work over 20 hours a week, you can still get income protection. Since you don’t have sick leave or workers' compensation, it’s especially important for peace of mind and long-term security.

Is It Enough If It's in My Super?

Many super funds offer basic income protection, which is cheaper but might not provide full coverage. Keep in mind that premiums paid through super may reduce your retirement savings. It’s worth checking if this is enough or if you need a separate policy.

Income Protection vs. Life Insurance

Life insurance covers you if you pass away, providing a lump sum to your beneficiaries. Income protection, on the other hand, keeps your finances afloat while you’re recovering and can’t work. It gives you regular payments to cover living expenses until you're back at work.

Key Terms to Know

• Benefit Period: The time you’ll receive payments. You can choose this when you apply.

• Waiting Period: The time you have to wait before you start receiving payments. A longer waiting period means lower premiums.

  
  

How to Choose the Right Policy

When picking a policy, consider:

• Your expenses and how much cover you need

• What you can afford to pay in premiums

• How long you can wait before receiving benefits

  
  

Always check the Product Disclosure Statement (PDS) to understand the details.