Income protection insurance is perhaps the most useful type of insurance of all possible forms of covering your bottom line. This is a catchall type of insurance, designed to deal with the heavy financial risks of not being able to earn an income. This is also unfortunately a type of insurance many people overlook when doing their financial planning. They’ll insure their house against fire, but not themselves against major income issues.

The irony is that for a relatively very small amount of money, getting income protection is very easy. This is a true risk management issue, and sadly many people really don’t understand it. Workplace and accidental injuries are common problems and they can have serious consequences.

Income protection, basics

Income protection insurance is geared to providing a given percentage of income in the event of injury or disability. This includes a long list of debilitating issues which can put people out of work for very long times. If you’ve ever had the unpleasant experience of recovering from an accident, with no money coming in and the bills piling up, you’ll appreciate exactly how useful that really is- It’s money when you need it most.

Income insurance is typically calculated on the basis of a percentage of income, up to 75% in some cases. Compared to no income, that’s a pretty good deal, by any standards. Compared to no income and going broke slowly as expenses eat into savings, it’s a great deal.

Income protection is really basic common sense, in terms of covering serious financial hazards. For a simple monthly payment, usually not much more than the cost of a restaurant meal, your income is covered.

In terms of dollar outlay, it’s also a very practical method of making sure you can deal with problems that can be quite distressing:

• Mortgage
• Power bills
• Rates
• School fees
• Food
• Clothes for the family

Any way you look at it, income protection insurance makes sense.

Income insurance and other benefits

Income insurance is commonly packaged to include additional insurance like trauma insurance, which relates to medical conditions involving stress and similar debilitating conditions. Stress is one of the most common workplace issues today, and it’s no joke. Depression, anxiety and similar medical conditions are responsible for major employment issues and sadly some quite serious related financial problems.

A very large number of people suffer from these conditions as a result of incidents in the workplace, related medical conditions and accidents. Some people are literally out of work for months or years as a result. The financial effects can be catastrophic for these people, and that’s exactly what trauma insurance is designed to manage.

For double income families, usually having major commitments, an income earner unable to work is a real problem. For a family earning a combined income of $150,000 a year, suddenly losing half of that income is likely to cause major financial issues.

The solutions are simple- Income insurance, combined with trauma and disability insurance. All angles covered, and no worries. Worth a look, wouldn’t you say?