By Liz Maroney, Wesltlawn Wealth Adviser 13 November 2013
When we think of our assets, we generally consider such things as our home and other property, our business and investments as well as valuables such as jewellery, collectibles and perhaps our motor vehicles. But many people often overlook what is likely to be their greatest asset of all – their income.
It is our income that allows us to acquire all our other assets. And if we lose our ability to earn that income, our other assets may suddenly be at risk. As we are generally 3 times more likely to suffer a serious illness or injury than we are to die during our working lives, the importance of protecting our income as part of an overall wealth creation strategy becomes clear.
Income protection insurance
Income protection insurance, also known as salary continuance, can help safeguard your income by paying you up to 75% of your regular salary should you be unable to work due to illness or injury. You continue to receive the benefit until such time as you’re able to return to work and perform at least one important duty of your usual occupation.
Income protection policies offer flexibility to suit your individual circumstances and can vary depending on your occupation, health and budget. Even if you participate in what may be considered a dangerous activity, such as skydiving, for example, you’ll generally be able to find an income protection policy to suit your needs.
You may be able to take out income protection through your superannuation with premiums deducted from your super account. Alternatively, if you pay premiums from your after-tax income, the premiums are generally tax deductible.
What about Workers Compensation?
Income protection differs from Workers Compensation insurance in that Workers Compensation protects the business by covering the salary of employees who are off work due to a work-related injury or illness. Most injuries and illnesses, however, occur outside the workplace where Workers Compensation provides no protection.
There is a wide range of income protection policies and options available. Choosing the right policy and options will depend on your individual situation, so contact your Westlawn Wealth Adviser for assistance.
General Advice Warning The advice on this site may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial, tax and/or legal advice prior to acting on this information.
Westlawn Wealth Management Pty Ltd ABN 32 124 861 409, Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749, Australian Financial Services Licensee, 105 -153 Miller Street North Sydney NSW 2060.