Many of us insure our cars, our houses and our possessions, but how many of us actually insure our ability to earn income? The answer to that is very few! In fact we surveyed a sample of our clients and discovered that only 2% of last year’s returns had a deduction for income protection.
Income protection can be claimed as a tax deduction, yet most people still do not have any!
Now consider this: More than 25% of people over 30 years old will take more than 6 months off work between now and retirement due to illness or injury. Can you afford to live without your pay for six months?
So what is Income Protection?
Income protection is one of the most basic forms of life insurance. In the event that you are unable to work and you are insured – your policy will typically pay you 75% of your income for a period pre-determined by you.
And the best part is- Income protection is tax deductable!
How do I ensure I have Income Protection?
- Check the insurance section of your last superannuation statement. Is there any income protection or salary continuance cover(Note that income protection organised as part of your super is not tax-deductible.)
- Check your employment agreement to see if your employer offers income protection insurance as part of your salary package.
- If you have completed the above checks and still don’t have income protection, you should either:
a. Call your super fund and ask what they can offer you, or
b. Call your favourite insurer.