Tag Archives: Income protection insurance

What stops you?


If you are one of those people whose living and investments rely on your ability to earn income, then Income Protection Insurance is definitely for you. Only with one condition; “your health must allow it to be considered”.

Basically, income protection insurance is about insuring up to 75 to 80% of your before tax income against an illness or accident that can stop you from working.You can get your income protection cover inside or outside of your superannuation. However, terms and conditions, and benefit definitions would be different.
What determines the quality of an income protection cover;

  • the definition of the benefit
  • having it inside or outside of your superannuation
  • any existing medical condition of the insured person
  • In order to ensure your cover meets your needs , it is worth talking to a financial adviser.

    Experiencing an ill health or suffering from an accident is not anybody’s dream of lifestyle. However, it happens, and it can happen to anyone of us unexpectedly regardless of how fit you are or not. In case of it, the good thing is that you do not need to worry about how to pay your rent/ mortgage repayment, cover living expenses and medical cost. As your income protection claim payment kicks start after predetermined waiting period until either you recover and go back to work, or by the end of your predetermined benefit period which one occurs first. In general, the premium would be 2% of the insured amount and it can be tax deductible.

    Imagine not insuring your income at all. What would happen if you were not able to work due to illness or accident? Your income would stop compare to having your income insured and being able to get 75% of your gross income paid to you on a monthly basis until you recover or the end of your predetermined benefit period.

    income protection cover advantageSmart people make smart choices. Rather than having the possibility of losing 100% of their income, they spend up to 2% of their income to protect their income earning ability.

    If you do not have any income protection cover , YES, it is the best time of the year to get one. As you know the end of financial year is on the corner. What does it mean?
    Well, imagine you got your Income Protection Insurance NOW, you would be claiming your premium when you are doing your tax return in July. So certain percentage of money you have spent you will get it back sooner rather than waiting for 12 months.

    Feel free to contact Halle now for a 15 minutes obligation free consultation (the offer is valid by 21 June 2015).

    Halle Yilmaz is a financial adviser and business consultant. As a financial adviser, she gives solid advice that can create rapid and lasting results for her clients. Sign up for her free E-Book and download “7 Steps to Healthy Wealth Management.” Follow Halle on Twitter @halleyilmaz

How well your lifestyle support system works!

Having the ability to earn income can boost your confidence in dreaming and living the lifestyle you have worked for.

As you know, being healthy day in day out, year after year of your working life is a pretty tall order. Lifestyle and IncomeWhat if a severe illness or injury were to prevent you from earning income today for a period of time – weeks, months or even years? How long could you sustain the lifestyle you have worked very hard to create?

Here are 3 simple calculations to find out.
Step 1: Current position
Add up your total monthly expenses (mortgage/rent/, food, clothing, utility bills, child’s education cost, insurance etc).Disregard your main income; add up any other income after tax.

$monthly expenses – $other income = +/- $current position

Step 2: Emergency cash
Calculate your emergency cash fund by adding together any owed weeks of sick leave and annual holiday. Multiply this by your weekly income (after tax) and add that to any accessible savings.

weeks multiply $weekly salary plus $accessible savings=$emergency cash

Step 3: Funding months
To calculate the number of months sustainable without your income, divide emergency cash by current position.

$emergency cash divide $current position = months of self-funding

Did you know? 75% of Australians have had a disease or other health problem that had lasted, or was expected to last, 6 months or more. Source: AIHW 2010

What if you could not work more than your self-funding months and you still had to

  • meet your mortgage repayment
  • cover the cost of your immediate and ongoing health cost
  • pay living expenses
  • fund your children’s education – if you have any

How would you cope with all,beside your efforts to get healthier again?Well, do not stress up! There is a solution to your problem; Before too late, simply get your ability to earn income is insured. How?

Basically, income protection insurance provides up to 75% of your before tax income when you cannot work due to an illness or an accident.The benefit payment would be on a monthly bases like salary/wages.The good thing to know about this type of insurance is that premium payable is tax deductible.

I assume you will agree with me that your income is not just about paying your living expenses. It is also your lifestyle, your future! And insuring of your income is the cheapest option to consider when it comes to making sure you can receive an income in the event of not being able to work because of an unexpected illness or an accident.

Should you want to find out more about income protection plans, and the best possible strategy that suits your need feel free to contact Halle Yilmaz.

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Halle Yilmaz is a financial adviser and business consultant. As a financial adviser, she gives solid advice that can create rapid and lasting results for her clients. Sign up for her free E-Book and download “7 Steps to Healthy Wealth Management.” Follow Halle on Twitter @halleyilmaz

NDIS is not replacement of your personal insurance.

Many people get confused with National Disability Insurance Scheme (NDIS) and life insurance or other personal insurance policies.

The disability insurance scheme covers only the basic costs of care for those disabled from birth or as a result of an accident and the condition significantly affects their communication, mobility, self-care or self-management.

It does not cover the cost of daily living expenses and will not provide a support that consists of income replacement. This is not a criticism of Disability Care, which is a massive step forward that will assist many Australians. But it will not provide a substitute income for those left unable to work.

On the other side, Total and Permanent Disability insurance pays a lump sum if you become totally and permanently disabled and cannot work rest of your life again. In 2008, the Australian Institute of Superannuation trustees found that about 71per cent of its superannuation fund members had TPD cover. However, the level of coverage is too low to meet ordinary wage earners’ daily expenses. In general, your employer on behalf of you sets up the insured amount without taking into consideration your personal and financial commitments. Moreover, the total and permanent disability insurance option under your superannuation fund is any occupation not own occupation. Some of the insurance covers under superannuation environment are reduced each year, as you get older.

We all know that an accident, sickness or death of a working age parent will usually have a significant impact on the financial circumstances of the family. Despite this, Rice Warner Actuaries calculate that over 95 per cent of families do not have adequate insurance in Australia. Based on current median levels of cover for total and permanent disability, the level of underinsurance is an extraordinary $8 trillion nationally and, for income protection alone, $600 billion.

Income protection insurance provides a replacement income for those who are temporarily or permanently unable to work due to illness or injury. The replacement income can be up to 75 – 80 percent of your current gross income and can be for short or long periods, generally after a preselected waiting period. And the premiums you pay are tax deductible.

The 2008 Household Income and Labour Dynamics Australia Survey found that more than 235,000 working-age people, living as members of a couple with dependent children, had suffered a serious injury or illness in the previous 12 months. The same survey found that more than 17,000 employed people who were living, as members of a couple with children were unable to continue working due to illness, disability or injury over the previous year.

By taking out income protection, life insurance or other personal insurance covers – total and permanent disability, trauma – you are ensuring that if your income stops, your lifestyle does not. In case you stop working due to illness or accident, or pass away, your family can continue with financial support to live the life you have worked so hard to provide them with.

Let’s be in control of our financial life.