Is your income protected? Talk to an Independent Financial Advisor in Sydney

Many people seek risk management products. Here are the important considerations for income protection.

For a start, there are four types of personal risk management tools:

• Death cover or life insurance
• Income protection or income replacement
• Total permanent disability
• Trauma cover or critical illness cover

Income protection is designed to pay a monthly benefit, whilst the other covers are designed to pay a lump sum benefit.

In simple terms, income protection will be an important safety net for you if you fall into one of the following scenarios:

• Have people that are financially dependent on you eg your family
• Are in a debt-laden situation due to the love of property see “Mortgage debt levels in Australia: debt management” and “Debt, gearing, leverage and money management – the simple truth”
• You deploy similar strategies as Warren Buffet see “Warren E Buffet and wealth creation via long-term investments”
• You want to be forward thinking see “Forward thinking: Contingency plans and protection for your family”

This is because prudent money management means that you don’t get into too much debt and still have room to move when the economic environment changes or when something unexpected happens in life.

If due to illness or injury, you are unable to perform one or more duties necessary to produce income from your regular occupation, how are you going to continue with your lifestyle?

How are you going to pay your bills and make debt repayments to avoid a fire sale?

What about covering additional cost due to treatment and rehabilitation?

Look at these income replacement benefit payments made by various insurance companies:

Companies in year 2014:

• A: $100m
• B: $121m
• C: $275m

Here is a statistical view of the type of cases company C has paid over the past 6 years.

Death cover, income protection, total permanent disability and critical illness cover is not about winning a lottery. It is not an investment, but rather a safety net for unforeseeable disastrous events that can happen in life.

The aim is to dampen the financial impact for you and your family.

Money buys you options and provides you with choices – nothing more. Make an informed decision, whether it is having no income protection, some cover or a large amount of cover.

Speak to our independent financial advisors today about a customised income protection solution for you.