If you're at all interested in wealth creation, you need to consider a wealth protection strategy at the same time. By this we mean your personal insurance plan, so you can protect yourself and the things in your life that matter to you. The most important type of cover for the younger generation is certainly income protection, simply because it protects your greatest asset – your ability to earn an income.
If you are 30 years old and earning an income of $80,000 per annum, you will earn $2,800,000 between now and the age of 65 over the next 35 years! (Not including tax, inflation or future pay increases). So by insuring yourself for your working life, you are protecting an asset that is worth $2,800,000 to you! This sum of money will go a long way to determining what sort of lifestyle you live and how many of your goals you achieve.
Listed below are the most important points included with an income protection policy:
This is the amount of cover you are allowed to insure and is normally up to 75% of your taxable income, and is the figure that would be paid to you monthly in the event of a successful claim.
This is the time you must be off work due to your accident or sickness before a claim can commence. Common waiting periods are 30,60 or 90 days.
This is the amount of time that the claim can be paid if required. It can stretch from two years up to age 70 in some cases.
What is covered?
Income protection will provide a monthly benefit to the insured once they have been unable to work for longer than their waiting period due to ANY accident or sickness. There are no specific conditions covered - the main determining factor is your time off work due to the accident or sickness.
If you are unsure about the necessity of income protection, ask yourself this question: If you had the goose that laid the golden egg, what would you insure? The goose or the egg? For most people that answer is fairly simple, and if you would like a second opinion on your income protection policy, or a free consultation on your personal insurance plan, please contact Dominique Schuh on 5482 2855.