Income Protection Insurance

This form of insurance may be the most financially necessary, as it provides cover for your greatest asset - your ability to earn income.

Under income protection insurance, up to 75% of the life insured's earned income may be insured. The insurance provides an income stream in the event the insured becomes totally or partially disabled. Benefits are payable after the selected waiting period and are payable for a predetermined period, known as the 'benefit period' as long as the insured continues to be totally or partially disabled.

Waiting periods vary between 14 and 720 days. The longer the waiting period the lower the premium. Benefit periods range between 2 years to a lifetime. The shorter the benefit period the lower the premium. These premiums are generally tax deductible, since the income while on claim will be included in assessable income.

Selecting waiting and benefit periods depends on your current circumstances. For example if you have accrued sick leave or other employment benefits.

We use needs analysis to advise clients which company's policy and selection of benefits will most suit their requirements. The premium cost largely depends on the insurance company's policy definitions along with the age of the insured, the benefit period and waiting period selected, the level of income insured, occupation risk, the additional benefits chosen and whether stepped or level premiums are to be paid.

It is advisable to take advantage of the level rather than the stepped premiums if you consider keeping the policy in force for the long term. This avoids significant price increases that usually occur after the age of 40 years by averaging the cost over the life of the policy. However, you need to be aware that you pay more premiums initially than the stepped option which is only an issue if you decide to cancel the policy.

Harlocks can quote from all leading Life Insurance Companies. Our advice is based on the most suitable policy for your needs, while allowing you flexibility to choose a policy to accommodate your financial position. When quoting we provide a full Statement of Advice (SoA) which provides a comparison between companies, policies, definitions and premium cost. This allows our clients to make an informed decision based on our advice, while ensuring that the policy best suits their needs.

For more information or a quote on this product please contact us.