How long can you survive without an income?

There are a few different factors to consider when purchasing Income Protection Insurance – your health, age, occupation, your income and features like waiting and benefit periods.

The waiting period is how long you will have to wait from the time you are unable to earn an income, to the time the income protection payments start. If you choose a longer waiting period it can reduce your premium. However, the waiting period should really be determined by how long you are prepared to survive on your savings and any annual leave you may have, before your income protection insurance starts. If you don’t have any annual leave accrued, or if you’ve changed employers, you may end up with no income at all until your waiting period ends.

Waiting periods for income protection insurance can range from 14 to 90 or even 120 days. The easiest way to determine how long your waiting period should be is to speak with a financial planner. They can help you take a much bigger look at your financial situation and may point out some costs you haven’t thought of.

One of the other important features of income protection insurance that needs to be considered is the benefit period. This is the maximum length of time you will continue to receive benefits from your income protection insurance. The benefit period starts after the waiting period expires.

Benefit periods for income protection insurance can be for a nominated number of years, e.g. 2 or 5 years, or it can be set to a nominated age like 60 or 65, or even when you are ready to return to work. The longer your benefit period, the higher the premium will be for your income protection insurance.

While determining a benefit period isn’t easy, a financial planner can advise on the different costs involved with different benefit periods. Also, as income protection insurance is about all of the ‘What Ifs’, sometimes it is better to insure for the worst-case scenario.

The team at Highland Financial understand the many different factors that need to be considered when protecting your income, we even ask about things like overtime and fringe benefits.

We offer obligation free consultations, so you’ve got nothing to lose! Call or email us today:
P: 07 3010 9290
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