Reasons For Having Income Protection Cover,
Even If You Are Young And Successful!
Income Protection Insurance is not usually a consideration for most young people. However, there are several arguments to be made for taking out an income protection policy even if you are younger – the most significant advantage being the price of premiums.
Income Protection Insurance protects you against the loss of income if you are unable to work in the event of an injury or illness. No matter what age you are, it is beneficial to have a policy in place to protect your livelihood.
Below are some of the benefits of Income Protection Insurance for younger workers to consider:
Cover Your Costs Of Living
What are the Average Weekly Earnings around Australia?
— Australian Bureau of Statistics (@ABSStats) August 15, 2019
Average Weekly Earnings data is used by the community and government to make important decisions for our country, such as making adjustments to a variety of government payments.
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Nearly half of young people could only cover the costs of living for one month in the event something happened which meant they couldn’t work. If you’re forced off work, you still want to be able to cover basics like like rent, bills, food, and other essential expenses.
An income protection policy will pay out a monthly benefit of either 75 or-85% of your monthly income, to cover these living expenses.
Premiums Are Cheaper
Being younger means you are considered less of an insurance risk from a health perspective and therefore the premiums payable are substantially.
Multiple factors are assessed when determining insurance premiums, age being the most important one as young people are considered less likely to suffer an illness.
Maintain Your Savings
Money you have saved and invested can help you live a quality life when you are without any income for a period of time. But you probably want to use your savings to attain long-term goals rather than fulfilling your short-term requirements. Income protection insurance will ensure that you can continue to pay bills and essentials, while maintaining your hard-earned savings.
Would your savings be enough to keep you or your family afloat if you were injured? Credit: MeBank
Tax Advantages
Income protection premiums are tax-deductible in Australia when the policy is purchased outside of your superannuation fund. If you do have to claims on your policy and you receive benefit payments, you need to declare these payments in your tax return. However, the tax treatment of Income Protection will always depend on individual circumstances.
Life’s Uncertainties
It is overwhelming to think about it, but illness or injury can happen to any of us at any time, without warning. We may aim to stay healthy and safe, but some things in life are outside our control.
Usually, people under 30 claim on their policy due to causes like motor vehicle accidents or sporting injuries. Young people are generally active and there are risks associated with that.
Fortunately, income protection insurance offers an affordable way to deal with life’s uncertainties.
It’s never too late to protect your income. Getting a mortgage, marriage, or the birth of a child are the biggest triggers for people to consider income protection insurance. But income protection insurance is a sensible precaution for all of us – regardless of age and your life circumstances.
Click here for a free, no-obligation income protection insurane quote
Mike Wallis
Mike has over 25 years experience, having spent his first seven years working as a Broker at Jardine Lloyd Thomson in Melbourne and in 2002 was transferred to JLT’s Accident and Health Department in London. For four years (2002 – 2005) Mike was a specialist A&H Lloyd’s Broker and during this time developed excellent relationships with the Lloyd’s A&H underwriting fraternity. In 2006 he returned to Australia in a senior broking position with overall responsibility for Placement Strategy, including the implementation of underwriting facilities and the various authorities granted by Lloyd’s. Mike was the underwriter at two specialist Underwriting Agencies prior to founding Aspect Underwriting in 2016.
