Income Insurance in Australia Secures Your Income

Income insurance in Australia is a well worth consideration for people that work, as income cover can pay up to 75% of your income if you are unable to work temporarily due to an injury or illness. Depending on the contract term, will depend on the length of time you receive benefits.

For instance your contract term could be either two or five years or until you reach the age sixty or sixty five. Income insurance varies and will depend on the amount of cover you have opted for. Income protection insurance is specifically designed to meet the costs of living expenses should you meet with an injury or illness.

There are two income insurance types, one being agreed value and the other indemnity.

Superannuation funds can provide an indemnity policy whereby premiums are deducted directly from the insured's account. The most expensive option is agreed value insurance, this type of cover pays out agreed benefits that reflect your income at the time you start your policy, and any fluctuations of your income will not affect the policy amount.

The most common and less expensive are the indemnity value, whereby you verify your monthly income at the time of submitting a claim and your benefits may be adjusted accordingly. However, this could present a problem if your monthly income fluctuates, if for instance you have become unemployed, taken maternity leave or have worked part time.

Income insurance in Australia provided by a superannuation fund is the most affordable option, as they are indemnity value based, although these policies offer less flexibility and fewer features. Both types of policies offer individual benefits such as agreed value, which covers the insured regardless of employment status, and is well suited to self employed people. An indemnity policy may suffice for those that have regular reliable incomes.

It is important to choose income protection with the right level of cover to suit your needs. Superannuation funds on the other hand offer insurance protection, and applications are guaranteed without medical examinations, and are an ideal alternative as opposed to not being covered.

Your present monthly salary will determine the amount of income protection you will require. Income protection provides around 75% of your monthly income in the event of injury or illness which will prevent you from working. You will need to calculate the costs of your debts, maintaining your family, mortgage and any other investments and assets.

Bear in mind that income insurance in Australia is a means of providing an income stream, should you not be able to work.