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With the current uncertain economic climate, wage earners should think to protect their most valuable asset, their income. As one could not really rely on a stable source of income when one gets sick or injured, disabling one to work, it is but wise to buy income protection insurance Australia. What is Income Protection? Income insurance is an insurance policy that pays a monthly benefit to policyholders of up to 75% of their income in cases when they are incapacitated and unable to work due to illness or accident. Why should I Consider Income Insurance? If you want to secure your income and meet your living costs and repayments on your mortgage, enabling you to carry on financially until you return to work, Income Protection is the best means as it can provide you a monthly tax free income for as long as required, up to retirement age being age 65 (depending on your occupation), should you be unable to work due to long-term sickness or injury, accidents, or major traumas. Do I need Income Insurance? If you have a family, or if you are the sole breadwinner in your family, or if you just want to be financially secure, then you need income protection insurance Australia. Income Protection is designed to provide partial income substitution in the event you become unable to work due to injury or illness. As you won’t have any income to pay your daily expenses if you are not working, Income Protection will cover you until you can begin collecting your normal salary again. Income Protection is also a very good option for both employed and self-employed people as when self-employed people cannot work, their business could fail. Income protection can help them get financial security when they cannot earn money due to problems such as temporary disability. During a period of high stress and disability, it is very important to have the peace of mind that comes with knowing that you have fulfilled your financial obligations. Types of Income Protection Indemnity Value Insurance The indemnity contract has limitations; hence, it is usually the cheapest since if the policy holder’s income is reduced after he applies for insurance, then the amount he receives for the claim will also be reduced. It is assessed when the policy holder files the claim. This means that the policy holder’s financial documents have to be supplied directly at the time of filing a claim. Basically, in this type of insurance cover, the insurance company will assess the policy holder’s financial records before making a claim payment. Agreed Value Insurance In this type of policy, the policy holder is required to submit his financial documents at the time of applying for the insurance. This means that the amount received by the policy holder will remain the same even if his income reduces later on. This implies that the policy holder will receive a fixed amount when he files a claim. Guaranteed Agreed Value Insurance Similar to the agreed value policy cover, the policy holder is also financially assessed with all corresponding financial evidence when the policy holder applies for the insurance and in certain situations the decided amount may be guaranteed without any financial documents being required. There are only a handful of insurance companies in Australia that offer guaranteed agreed value covers. Before one buys Income Protection, buyers should remember to assess their own needs and compare income protection types, as well as consider their personal and financial requirements before buying a policy. Benefits of Income Protection Insurance | 
