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Why you need income protection insurance

Why you need income protection insurance

Income protection insurance is designed to provide up to 75-85% of your monthly salary in case you are unable to work due to an illness or injury.

While it can easily be seen as an extra expense, there are a number of important reasons why you should seriously consider it. For example, it can help you:

1. Stay financially secure. When you’re unable to work for an extended period, your employer might be forced to let go of you. Or if you have your own business, you might have to put it aside to focus on your recovery. Either way, you won’t be able to have access to your regular stream of income.

When insured, you will get monthly benefits which will help tide you over until you fully recover. You can use the money not only for your medical expenses but for the regular outgoings as well. These include your groceries, utility bills and mortgage repayments.

2. Keep your savings intact. Let’s say that you saved money specifically for emergencies similar to the previous example. So why do you still need income protection insurance?

The truth is that you will likely burn through your savings quickly when you rely solely on it for your daily expenses. With income protection insurance, not only will you continue to have a steady income when you’re ill or injured, you’ll also be able to keep your savings intact. You can then use it for other purposes, such as an investment, for your children’s education, or to prepare for your retirement.

3. Reduce stress and worry during your recovery. When you’re sick or injured and are unable to work, it can be a very difficult time for you and your family. And with no money coming in, you will be constantly worried about how you are going to pay for your bills.

Your finances should be the least of your worries when you’re trying to recover. With the regular benefits you’ll receive, you will be able to reduce stress on yourself and your family. Having a positive attitude, you will be able to focus on a quick and effective recovery.

4. Receive tax benefits. Unless you take out income protection insurance through your super fund, you will be able to make a tax deduction on the cost of the premiums. This means you could decrease the tax you have to pay the ATO come tax season.

From keeping you financially secure to helping you enjoy tax benefits, there are many great reasons why it makes sense to take out income protection insurance. But more importantly you are securing your future and that of your family.

Contact us on (08) 9289 7777 or info@rdfinance and we will but you in touch with a qualified insurance broker.