Your income is the foundation upon which your family’s financial plans are built and in most people’s lives there won’t be a larger asset to protect than their cumulative income. Consider this – a 40 year old currently earning $40,000 per annum with salary increases of 7% each year will earn around $2.5 million by retirement. I think you would agree that when it’s put that way, your income is certainly worth insuring!

Life has a habit of throwing up hurdles. Planning for possible problems and insuring against them reduces the risk that you may not achieve your goals.

Basically, to achieve your life plans you need to maintain your cash flow, so what happens if it should suddenly stop? Income Protection Insurance will replace 75% of your income if you can’t work due to accident or sickness and it is also tax deductable.

It isn’t a replacement for workers’ compensation, sick leave or private health insurance, but income protection insurance is a long-term solution that should be tailored to work in concert with these and other insurances.

Could this be you?
Bill was a 40-year-old carpenter who broke his leg in five places when he fell off a trampoline playing with his son. His financial circumstances were:

1. Rent $1200 per month
2. Maintenance to his ex-wife $600 per month
3. Children’s school fees $600 per month (paid annually and due shortly)
4. General living expenses (food, bills etc.) $800 per month
5. Car repayments $280 per month

Due to the severity of the break, Bill was off work for 10 months. The accident cost him $42,000 in lost income and $6,000 of his savings. He borrowed from his aging father to cover shortfalls such as school fees and rent. After his recovery, Bill found it difficult to work as a carpenter because his injury didn’t allow him to climb ladders or balance well on roofs.

If Bill had income protection insurance with the appropriate conditions and terms he would have been able to recuperate without the stress of huge financial pressures. Additionally, he may have received an ongoing partial income while he retrained for another career.

Consider your own circumstances in the event of misfortune and ask yourself honestly – how would my situation unfold? Then discuss your current protection and possible strategies with us.

Call the office on 5990 1000 and ask for an appointment with Silvio Marinelli, our experienced Financial Planner.