Income Protection

Income protection is designed to protect the policy holder against financial disaster should they become injured, fall ill, or are unable to work for a significant period of time.

ACTIVITY

Income protection is designed to protect the policy holder against financial disaster should they become injured, fall ill, or are unable to work for a significant period of time.

Unless you have an occupation that only provides employment for short periods (such as a seasonal job) or that is a high-risk, you can purchase income protection insurance that covers most situations. 

The cost for income protection insurance depends on a number of factors. The most common include occupation, earning stability, qualifying /deferment period, health, benefit period, and age. Policies for income protection insurance are usually tax deductible.

Protecting personal income

Income protection insurance provides individuals security about their future earnings from paid employment.  The following table outlines future earnings accumulated to age 65 based on four different current weekly income levels:

Age now
(years)

Accumulated earnings to age 65

$600 per week

$800 per week

$1,000 per week

$1,500 per week

20

1,404,000

1,872,000

2,340,000

3,510,000

25

1,248,000

1,664,000

2,080,000

3,120,000

30

1,092,000

1,456,000

1,820,000

2,730,000

35

936,000

1,248,000

1,560,000

2,340,000

40

780,000

1,040,000

1,300,000

1,950,000

45

624,000

832,000

1,040,000

1,560,000

50

468,000

624,000

780,000

1,170,000

55

312,000

416,000

520,000

780,000


Comments