INCOME PROTECTION INSURANCE
Your income — whether as an employee, business owner, or sole trader — currently provides you with a healthy standard of living. However, if you become ill or injured and were unable to work — could you continue to support yourself and your family?
Income protection insurance — also known as salary continuance — replaces part of your salary if you’re temporarily incapable of fulfilling your employment duties. Not just providing financial benefits to pay your household costs and bills, but also easing money worries — allowing you to concentrate on returning to full fitness.
It’s particularly suitable for self-employed people, small business owners, and professionals whose businesses rely heavily on their ability to work. Some companies may offer it as part of an employer’s salary package, but it’s worth investigating the specifics of that policy before deciding whether to take out your own cover instead.
And to protect the income of entire corporations — not just an individual — we also deliver reassuring business interruption protection.
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What Income Protection Policies Cover
Each individual income protection policy has its own definitions of disability — total or partial — and the benefits it provides under the cover.
Typically, it insures up to 75 per cent of your gross wages for a specified time period — for example, for two years or up to the age of 60.
However, as every sole trader, business owner, and trade professional’s requirements differ — talk to our team at PIB. As an income protection insurance broker, we can recommend the optimal cover to suit you and your needs.
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Who Can Benefit From Income Protection Cover?
If your finances would become dramatically impacted if you could not work, you should consider the best income protection insurance.
It can be crucial if you’re:
- Self-employed — you don’t work, there’s no income.
- A small business owner.
- A professional — accountant, doctor, lawyer, etc.
- Employed by a business that offers no, or insufficient, sickness and injury cover.
- Providing for a wife, partner, or children that rely on your income.
- Currently paying debts such as a loan or mortgage that require repayment irrespective if you’re working or not.
Types of Income Protection Insurance
Income Protection for Business Owners
Many business owners, especially those in the small-to-medium sector, are the key revenue generators in their operation. In short, if they don’t work, company finances are seriously affected — making it impossible for them to continue to receive a wage or salary.
If you’re the proprietor of a small business — the best income protection insurance will provide you with an income while incapacitated. Furthermore, business interruption protection can safeguard your entire enterprise should unforeseen events restrict your ability to trade.
Income Protection for Sole Traders
Perhaps more than any other sector — income protection is crucial for self-employed sole traders. If you’re one of the hard-working men or women in this category and with no additional staff back-up — your financial reward is based purely on your ability to ply your trade.
Loss of sole-trader income can make it tough to make ends meet — with recent research indicating that 20 per cent of Australians have less than $1000 in savings. PIB’s income protection allows you to continue to receive a monthly financial benefit while you recover from injury or illness.
Income Protection Insurance for Professionals
If you’re a trade professional — such as an accountant, pilot, doctor or lawyer — you undoubtedly insure your home, contents, and motor vehicles. However, many pro-sector workers fail to protect their most valuable asset — themselves.
Highly trained and educated, your experience, knowledge, and skills bring significant financial rewards — but should you experience a serious illness or injury, your cash generation will be negatively affected. Income protection cover from PIB will ensure you continue to have a regular monthly salary.
Additionally, it’s also advisable to consider professional indemnity insurance — defending you against alleged claims for negligence, errors, and omissions in your expert advice and counsel.
Considerations When Choosing Your Income Protection Cover
At PIB, we will ensure that you receive the ideal income protection cover for your particular employment or self-employment circumstances.
Areas we will discuss with you include:
Income Protection Policy Type
Our policies fall under two categories:
Indemnity Value
Provides a stated percentage of your current salary. Hence, if your wage income decreases after you take this cover — you’ll also receive a lower financial benefit in the event of illness or injury. Typically, this format is the most cost-effective option and ideal for those who have a fixed income.
Agreed Value
When you take out the policy, you opt for benefits that provide a specific percentage of a stated monthly value — for example, 75 per cent of $2500. Although with a slightly higher premium cost than indemnity value — they’re particularly useful if you receive a salary that varies significantly each year.
Waiting Period
The period of time that you must wait before you begin to receive your income protection payments following illness or injury.
Generally speaking, the lengthier the waiting period, the more affordable the insurance policy. For professionals and sole traders holding significant savings, it can be beneficial to opt for a longer waiting period.
Benefit Period
This defines the period of time that you will continue to receive your income protection benefits — which can be for a specified term, such as two or three years, or up to a stated age.
Most commonly, the longer the duration, the more costly the policy cover. However, longer terms mean greater financial stability and peace of mind.
Premium Type
With many insurance protection policies, you can elect to pay for your cover with either:
Stepped Premiums
These increase every year upon renewal of your policy — based on the assumption that as you age, the more likely you are to make a benefit claim.
Level Premiums
Typically require you to meet higher premiums at the commencement of your cover — but feature low annual increases.
Why Choose PIB for Your Income Protection
Since 1986, at PIB, we have been ensuring financial stability to Australia’s workforce with income protection insurance — shielding against incapacitating illnesses or injuries.
Our industry-respected reputation for attentive personal service, integrity, and honesty has permitted us to deliver income cover specific to individual business owners, sole traders, and white-collar professionals.
Working with you to understand your particular needs and requirements, the PIB team of knowledgeable and qualified advisors will recommend the optimal cover — ensuring you the ultimate in income insurance protection.
OUR GROUP
Professional Insurance Brokers is part of Australasia’s largest general insurance broker network, the Steadfast Group. We leverage Steadfast’s scale to ensure our clients have access to a wide range of insurance companies, a broad range of products, exclusive policy options, and of course, competitive pricing. And when the time comes and you need to make a claim, you will have the backing of Steadfast behind you.
Professional Insurance Brokers is a leading specialist in custom, tailored insurance policies for individuals and business. Through our subsidiaries, including Unicorn Risk Services, we also have extensive experience in brokering insurance policies for the massive range of community and not-for-profit organisations that operate throughout Australia.
Professional Insurance Brokers (NSW) Pty Ltd
3 Harold Street, North Parramatta NSW 2151
Phone: (02) 9630 8788
ABN: 32 003 068 540 | AFSL: 241251
