When is it time for Income Protection Insurance?
As the last weeks of the 2018-19 financial year come to an end, it’s time to consider bringing forward
and making tax-deductible purchases to maximise your tax deductions.
If you have a bit cash on hand, you can, for example, pay a year ahead on bills you normally pay on a
monthly basis – including investment loan interest or the handset portion of your phone bill.
June is also a good time to look at things on your ‘should have’ list that you’ve been putting off – and
one of the most important of these is income protection insurance.
Many people have life insurance but either don’t know about or haven’t yet acted on taking out
income protection insurance. In fact, income protection insurance may be of more value to families
– because if the main breadwinner is unable to work due to illness or an accident, how are monthly
bills – including mortgage payments – to be met? 99% of families simply don’t have the cash
reserves to go without a monthly income for more than a few months.
Accidents and illness are arbitrary and don’t discriminate, so it makes sense to be prepared. Income
protection insurance replaces your monthly income for an agreed period if sickness or an accident
prevents you from working. Some insurers even cover redundancy.
Moneysmart has a good overview of what income protection insurance is, how it may vary from
insurer to insurer and the information you’ll need to share with an insurer.
June is also a great time to apply for income protection insurance, because insurance companies
have strong incentive to complete applications before the end of the financial year too.
Applications – which may require a range of information including your medical history – can often
take several weeks. However, an insurance assessor may be able to get the application that isn’t
overly complex finalised over a shorter period.
Take advantage of the timing to get your income – and your family – protected and to include that
tax deduction for this financial year!