What is Income Protection Insurance?
Most of us insure our car, and probably our home. But did you know that only 33 per cent of working Aussies insure their income?* Without Income Protection Insurance, you may not be able to cover your bills or support your family if circumstances force you to stop working.
What does Income Protection cover?
Income Protection Insurance is designed to guard one of your most important financial assets: your salary. It’s an insurance policy that provides a regular payout if you’re unable to work due to illness or injury, for a period agreed to by you and your insurer when you take out the policy. It can help you keep paying your bills, and keep you from totally depleting your savings.
With AAMI Comprehensive Income Cover, you can receive up to 75% of your average income over the previous 12 months (up to $10,000 a month) during the claim benefit period. So, say you’ve been continuously employed, earning $4,500 per month and you then fall ill, AAMI will pay up to $3,375 per month until you’re back on your feet (for up to five years, depending on your nominated benefit period). This could have several advantages.
Stay on top of expenses
The bills don’t stop just because your income does! You might even have more bills than usual if medical expenses are rolling in. Income Protection can help you stay on top of expenses and maintain your lifestyle.
Focus on your recovery
The last thing you need when you’re unwell is added stress and anxiety. With a financial safety net, your focus can remain firmly on your health.
Take advantage of tax benefits
If you purchase your policy outside of superannuation, with a provider like AAMI, you may be eligible to claim your insurance premiums as a tax deduction – which can save you money.
What’s not covered under Income Protection Insurance?
Unfortunately some events will not be covered by your policy. For example, an AAMI policy excludes death, some medical conditions, and dangerous sports and occupations. As with all insurance, you should carefully read the Product Disclosure Statement to fully understand your cover or seek advice from an independent Financial Advisor. You may also want to consider Life Insurance to protect your family’s future.
Am I covered if I am stood down or lose my job?
If you’re made redundant or involuntarily unemployed, you won’t usually be eligible to claim. But this isn’t a reason to shy away from insurance – if there’s one lesson to be learnt from recent global events, it’s to expect the unexpected!
While it’s easy to adopt the “it won’t happen to me” mentality, it’s safer to have a backup plan in case of injury or illness. Even if you’re fit and healthy, accidents can happen.
Income Protection provides peace of mind and financial security for you and your family. Want to know more? Explore AAMI Income Protection Insurance online, or get in touch with one of our friendly insurance specialists today on 1300 407 322.
- What’s the difference between Income Protection through super and a standalone policy?
- Why do you and your family need life insurance?
- How much life insurance do I need?
*Rice Warner: Underinsurance in Australia
Insurance is issued by AAI Limited ABN 48 005 297 807 AFSL 230859 (AAI) trading as AAMI. Read the relevant Product Disclosure Statement before buying this insurance. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.