Why Income Protection Insurance Shouldn’t be Seen as Optional
[social_share]You have health insurance to cover routine medical expenses and minor trauma. You have trauma cover for more serious, but temporary, conditions. You even have total and permanent disability insurance in case you’re seriously injured or become so ill that you can no longer work.
You might figure you’re adequately covered, but you’d be missing something important: income protection insurance. No matter how well-prepared you think you are there are bound to be unexpected expenses if you become ill or injured.
Whether that condition is a temporary or permanent one is beside the point — will your trauma cover or TPD insurance definitely be enough to cover all of the resulting expenses? Even if you’re reasonably confident in that, will it cover your other routine monthly expenses while you’re out of work as well?
Income Protection Insurance as a Catch-All
Income protection insurance makes sure you don’t have to worry about whether or not that lump sum payment you’re expecting will be enough to deal with your medical bills while also supporting your family for a while. The income protection insurance can pay a portion of your typical income on a regular basis, making sure there’s still money coming in to put towards the mortgage, rent, car payments, utility bills, groceries, and other monthly expenses.
You’ll be able to use that money for pretty much anything you want, from those routine bills to additional medical expenses if your other insurance policies don’t quite cover enough. Your income protection insurance might give you just the right amount of freedom and flexibility to get through whatever you and your family are facing. It can give you peace of mind.
How Income Protection Insurance Goes Further
TPD insurance gives us a perfect example of how income protection insurance can be an important supplement. Let’s say you’re permanently disabled and no longer able to work. You receive a lump sum benefit from your TPD insurance policy. If you were injured at 50 years old, perhaps it would have been enough to cover not only the medical expenses but also your expected income for the rest of your working life. But you didn’t get injured at 50. You became disabled at 30.
That TPD lump sum payment still covers your medical expenses and will replace your income for a while. It won’t last forever though. With income protection insurance you can choose a policy that will pay out for just a few years, or you can even get a policy that pays a portion (such as 75%) of your income until you reach retirement age. If you choose the right policy, your income protection insurance can provide a whole new level of financial security.
Let your trauma cover and total and permanent disability insurance deal with your larger up-front medical expenses like a new wheelchair, ramp, or physical therapy. Let your income protection insurance be your primary backup plan for protecting your income.
