Four top tips to keep the cash coming in


Most of us need to work to live. Life without an income can be difficult to manage when we are single let alone if we are married with kids and a mortgage. If the main breadwinner can’t work due to serious injury or illness, financial pressures will most definitely build. Fortunately though, income protection can help to ease this burden.

Here are four common features of a good income protection policy

1. Protection to age 65

 Depending on your policy, Income Protection can provide monthly payments until you turn 65. So it’s like you’re still getting a large part of your salary or wage, even though you’re not working.

2. Tax deductibility of premiums

Depending on your policy and personal financial situation, you should be able to claim premiums you pay for your Income Protection policy as legitimate tax deduction.

3. Superannuation ‘Top-Up’ cover

Most Income Protection policies offer this benefit, essentially, in addition to receiving your Income Protection benefit should you make a claim, your Policy will also continue to make superannuation contributions on your behalf directly into your super fund. This should ensure that your superannuation benefit continues to accumulate for your retirement.

4. Specified Injury Cover

This benefit forms part of any good Income Protection policy. If you suffer an injury as listed in your policy, the insurance company will pay you a ‘lump sum’ payment without the need to serve any waiting periods at a predefined amount.

Things to consider when selecting income protection

Most Income Protection policies will only cover you for 75% of your income (plus superannuation top up cover). Some occupations or people with certain pre-existing injuries or illnesses may specifically not be covered. In other cases cover may be afforded by the insurer by applying exclusions or premium loadings. 

Be sure to shop around and find an Income Protection policy that suits your needs; understand what you are purchasing and the cover provided.  Getting it right at the time of application may make a big difference should you need to claim. When in doubt, always seek independent advice from a qualified financial advisor.

Read more on maintaining cash flow in your business.