Income protection supplements the income you are unable to earn due to illness, injury, disability or accident.
This can be for a potentially short-term reason, for example a severe car accident that injures you, however you will return to work in future even if it is a year or 2. Or it can be for a very long-term reason, like being unable to work as a result of these injuries. Income protection generally only covers 75% of your income .
Important to ensure that if your income stops, you can continue to meet your living needs like your mortgage, school fees, utilities and food.
For you to access this money from your insurance contract, you are required to meet a ‘waiting period’ that is, you can prove that you are unfit for work for a particular period of time for example, 30 days, 60 days or right up until 720 days. Once you can satisfy this claim then you will be paid for the length of a stated benefit period, for example, 2 years, 5 years or up until age 70. Both the waiting period and benefit period are recommended by your financial planner in direct consultation with you about your personal circumstances.