Income Protection Insurance
Income protection insurance covers your living costs when you’re unable to work. It covers your cost of living and helps you pay bills when you can’t work due to disability or critical illness. Income protection insurance will cover only a portion of your income though. It all comes down to your income protection insurance policy. More on the coverage details and monthly premiums cost below.
Generally, this type of insurance will help pay for your essential needs. This can include food, rent or mortgage, car payments, etc, anything that is fit to see as essential.
Covering your financial needs if you’re hurt outside of work is the biggest perk of income protection insurance. Similar to this type of insurance, there is workers’ compensation. These two are entirely different things. The workers’ compensation will cover the cost of living in case you’re hurt at work. When such a thing happens outside of work, you won’t be covered.
Another reason why income protection insurance can be good for you is it doesn’t only cover your needs. It also provides the whole family’s necessities. So when you get income protection insurance, you’ll secure your family’s future.
Income Protection Insurance Coverage
When you’re unable to work as a result of disability or sudden illness, you get up to 75% of your income as part of the coverage. This usually lasts for about six months until you’re at a certain age. Typically, the age limit is 65 and the coverage duration can last anywhere between six to nine months. Again, it all comes down to your policy.
There are also other similar types of insurance you might pick over income protection insurance. There is the home loan insurance that pays for your mortgage. Unlike the income protection insurance, it can kick in in the case of the policyholder passing or diagnosis of a serious illness.
Another type of income protection insurance is redundancy insurance. The coverage is similar to income protection insurance but it is tax-free and helps you pay the bills. This type of insurance is also known as unemployment protection insurance. In all cases, we recommend the income protection insurance as you’ll get to keep 75% of your income, in cash.
The Cost of Income Protection Insurance
The cost of income protection insurance coverage will be vastly different depending on your age, job, tobacco usage, and gender. Typically, if you’re under 35 or so, you will pay significantly less for your income protection insurance than someone who is in their 50s.
The table below shows the average monthly premium amounts for different occupations in different ages.
| Occupation | Male Under 30 | Female Under 30 | Male Over 50 | Female Over 50 |
| Car Mechanic | $75 | $95 | $350 | $570 |
| Chef | $70 | $95 | $370 | $530 |
| Cleaner/Housekeeper | $85 | $110 | $420 | $590 |
| Electrician | $80 | $120 | $380 | $570 |
| Retail Worker | $50 | $65 | $220 | $340 |
| Sales Representative | $55 | $60 | $250 | $320 |
| School Teacher | $45 | $70 | $265 | $380 |
| Truck Driver | $95 | $110 | $440 | $620 |
| Waiter | $70 | $95 | $390 | $520 |
The prices represent the current average price for the income protection insurance market. The reason why females pay more for coverage is females are more likely to claim income protection insurance. Also, such life events like pregnancy is covered by income protection insurance as well. Therefore, it is normal for females to pay a higher rate for income protection insurance than males.
We’ll keep the average cost of income protection insurance rates fresh. Check back for the changes in the future!
