Why Income Protection Insurance Is Critical If You Are Self-Employed Or Running A Small Business
Income protection insurance is one of the most effective financial strategies available for many Australians. In simple terms, even if you’re young, fit and healthy, there is always a risk that an event could occur which prevents you from attending work and earning an income.
Of course, if something disastrous did happen, you will most likely still have outgoing financial obligations such as bills and mortgage or rent payments, food, school fees and a range of other expenses.
If you are self-employed or own a small business, there is a strong chance that you have neither sick leave or annual leave available as an option to help you through in the event of a serious illness or injury. But you and your family are probably highly dependent on your income to keep things afloat from a financial perspective.
Even if you are in a position to bring someone else in to run your business or take on your job while you can’t work, it is most likely that any business income will go directly to remunerating them, leaving you with the ongoing problem of how to take care of your outgoing personal expenses and care for your family.
If you are a small business owner or self-employed, for example as a tradesperson, it is critical that you consider the option of income protection insurance to help manage your financial requirements should something happen that prevents you from earning an income for any period of time.
Of course, given the critical importance of income protection insurance as part of your overall financial strategy, it is equally important that you carefully consider what level of payments you would require in the event that you had to use the insurance policy.
The first thing you need to consider is what base level of income you would require in order to meet all of your financial obligations for the period you can’t work. That means developing a detailed budget addressing issues such as your mortgage/rent payments, school fees, car payments, weekly groceries, the cost of utilities such as water, electricity and gas and any other critical outgoing that you and your family rely on.
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The next important step is to understand what type of policy is going to best meet your needs. Like so many things these days, the simple and obvious solution might be to go online and check out what’s available in the market. However, for something as critical as income protection insurance, you will want to be confident that the policy you select does everything it says it will and is well-matched to your individual circumstances. That means you really should engage with an industry expert that understands the product and tailors an insurance package perfectly that is market-leading in terms of breadth of cover and competitive pricing.
If you are considering taking out income protection insurance to protect the future of you and your family, it is important that you engage with an industry expert such as Aspect UW to make sure you get the right policy for your circumstances.
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.
