income protection insurance for you

By: insurance 4 you

What should I pay for income protection insurance?
Income protection premiums vary greatly across the market place depending on the level of protection you are after. Prices vary depending on age, the salary you want to insure and other factors, but as a general rule, income protection in Australia can cost around one week’s salary and for most taxpayers premiums are tax deductible.
Income Protection Insurance Premiums are set depending on:
· Age - The cost of obtaining cover generally increases over time
· Occupation - If you are involved in a hazardous occupation or where there are more risks involved, you will pay a higher premium compared to a professional office worker.
· Benefit Period - This is the maximum length of time following the waiting period that the policy will pay the benefit for. These can either be for a set period (2 year, 5 year) or until a certain age (to age 65). If you are able to return to work because you have recovered from your sickness or injury then the monthly benefit will cease at that time.
In the event of job loss caused by a sudden accident or illness Income Protection Insurance policies protect income by providing compensation. However, these plans do not provide any coverage for pre-existing conditions that you might have.
Generally, Australians are overwhelmingly optimistic about their financial future. This optimism is a key driver behind Australia being the most underinsured of any developed country. Alarmingly, many Australians simply do not have enough insurance, and some have none at all.
Many policies will cover up to seventy five percent of your salary if you are totally or partially disabled. Income protection insurance can be taken out for fixed monthly premiums, based on how old you are when applying for the cover and how much you need to cover each month.
What is income protection insurance?
Put simply, income protection insurance aims to protect your income in the event that you can’t work due to illness or injury.
End of Financial Year. Don't forget to claim the cost of income protection insurance premiums for tax purposes .
How does income protection work?
Income protection insurance provides an income stream for you should you become unable to work due to an injury or illness.
In the event of a claim, the insurer will pay an amount (normally up to 75% of your gross salary in Australia) until you have recovered sufficiently to work again, or up until the maximum benefit period as stated in the policy which is normally 2 year, 5 year or up to age 65.
How much income protection cover do I need?
The amount of income protection cover you need will be determined by your salary. In Australia the maximum amount of cover you can get is usually limited to:
· If you are employed: 75% of your current gross salary (including employer packaged fringe benefits and superannuation contributions).

Article Source: http://yourfinance.co.za