Why Is There An Increase In The Number Of Individuals Looking For Long-Term Income Protection?
2020 has changed our lives in many ways and our priorities and lifestyles have been turned upside down. We know now this is going to be the new normal, and people have started focusing on long-term needs like insurance, which was before a secondary thought and has now become a primary one.
When it comes to uncertainty, nothing protects our finances like insurance does. According to research by Global Data, Australians are “panic buying” income protection insurance products amid growing concerns of the future and the uncertainty it can hold.
The pandemic pushed a huge increase of people looking for long-term Income Protection (IP) cover as they are afraid about the prospect of having no income if something were to happen. Most of the people who have lost their income during this time a would not be prepared to lose it again over an illness or injury.
Income protection is the best way to protect the most important asset in your life. Income protection pays you a benefit amount of up to 85% of your income if you are unable to work due to injury or illness. It is also important to look at the two essential factors of income protection insurance before buying, the waiting period and benefit period.
The waiting period on income protection insurance is the period a policyholder must be unable to work for before they are eligible to receive their benefits from their policy. A benefit period is the maximum length of claim per event. The options for benefit period include 1 year, 2 years, and 5 years.
One of the major reasons for the increase in the number of individuals looking for long-term income protection, i.e. five years of benefit period, is uncertainty.
Before the pandemic happened, most people didn’t look for long-term income protection because they didn’t think they would need it.
Now they have seen the uncertainty the world can hold, and people are looking at their lives, as if they must protect what cannot be controlled. People are afraid of losing income from not being able to work, so they want a more secure option.
For those who haven’t purchased income protection cover yet, with a bit of forward planning, you can take control of your future. If you’re worried about you or your family’s financial security, if you are unable to earn an income while you’re injured or sick, consider income protection insurance to safeguard against uncertainty. You never know what is around the corner, but you can always plan to make it better.
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.
