Protect my Income

Your greatest asset – your income

If you’re employed or self-employed, you should consider income protection insurance.

If you had a machine in your backyard that generated $70k p.a., you’d insure it, wouldn’t you? You’re the machine!
What are the benefits?

By using this strategy, you could:

  • Receive up to 75% of your pre-tax inome if you are unable to work due to illness or injury, and
  • Maintain your family’s lifestyle while you recover
How does the strategy work?

Many people insure their home and contents, event their life. Yet, all too often, they don’t adequately protect what is potentially their greatest asset – their ability to earn an income.

Think about it this way, If you are unable to work for an extended period due to illness or injury, how will you meet your mortgage repayments and other bills and expenses? Without an income you could run down your savings very quickly and face difficulty

Rather than putting your family’s lifestyle at risk, income protection insurance could pay you a monthly benefit of up to 75% of your income to replace your lost earnings.

Most income protection policies offer a range of waiting periods before you start receiving your insurance benefit (with options normally between 14 days and two years).

You can also choose from a range of benefit payment periods, with maximum cover generally available up to age 70.

While you can buy income protection insurance within or outside a superannuation fund, insuring in super could be more affordable.

What is you future earning capacity?

If you’re in any doubt about the importance of protecting your income, the table below shows how much you could earn by the time you reach age 65.

For example, if you are currently 35 and earn $80,000 pa, you could earn around $3.8 million before you turn 65. Isn’t that worth protecting?

Current income (pa) Age now
25 35 45 55
$40,000 $3,020,000 $1,900,000 $1,070,000 $460,000
$60,000 $4,520,000 $2,850,000 $1,610,000 $690,000
$80,000 $6,030,000 $3,810,000 $2,150,000 $920,000
$100,000 $7,540,000 $4,760,000 $2,690,000 $1,150,000

Assumptions: Salary increases by 3% pa. No employment breaks. Figures rounded to nearest $10,000.

To find out if a strategy like this will help you, please book a meeting.

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