Income Protection Policy
Before You Get Income Protection Insurance, Make Sure You Are Getting The Right Insurance To Protect Your Income
To make income protection insurance worth it, you need to make sure that the policy your income protection insurance broker finds for you is appropriate for your needs – which is why choosing a good income protection insurance broker is the first step in making the right choice.
Before you even choose your income protection insurance broker, though, take some time to understand what an income protection insurance policy actually is.
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Income Protection Insurance, Do I Need It?
Outside of legally required insurances like the ACC which is partially funded by your motor levy and some industry specific professional insurance, you don’t technically “need” any insurance.
Could it benefit you to get various types of insurance to protect you, your family, and your way of life, though?
That’s up to you and depends on your circumstances. Often, despite not being a legal requirement, having something like income protection can be a dealbreaker for folks – especially those with many dependants or high risk job.
The best income protection insurance for dentists, for example, is very different to the best income protection insurance for tradies because each other those professions would need cover for different things.
For example, the dentist may need a higher cap on the level of income protection to cover their higher salary but it might not cover them if it is a workplace related injury that causes them to be out of work. A tradie on the other hand might not need such a high cap, but does need robust terms and conditions for physical injury.
The best income protection insurance for contractors might protect them for a time period after they have recovered, if the reason they were unable to work also costs them additional contracts.
When it comes to income protection insurance, eligibility goes both ways – you need to meet the requirements of the policy, but the income protection insurance policy also needs to meet yours.
What Types Of Income Protection Insurance Are There?
Income protection insurance can take a few forms.
A pure income protection insurance policy will cover you for exactly that – to replace some or all of your income should you become unable to work. For example. If you were to have an accident income protection insurance could pay all or some of your income for the whole time you’re out of commission but not necessarily cover the physical therapy you need after the accident.
Mortgage protection won’t cover your food or phone bill, but can take care of your mortgage payments.
Redundancy insurance wouldn’t kick in for temporary inability to work, but could cover you for more things or longer than income protection would if you were made redundant.