How to Choose the Right Income Protection Insurance

It’s a well-known fact that most people are underinsured, especially when it comes to income protection insurance. This type of insurance is designed to replace a portion of your lost earnings if you become disabled and are unable to work.

There are a number of factors to consider when choosing income protection insurance, including the type of policy, the amount of coverage, the length of the benefit period, and the premium. Here are a few tips to help you choose the right income protection insurance for your needs.

Things to Consider When Choosing Insurance

Policy types 

There are two basic types of income protection insurance: short-term and long-term. Short-term policies provide benefits for a specific period of time, usually one to two years. Long-term policies, on the other hand, provide benefits for a longer period of time, usually five years or more. 

If you’re not sure which type of policy is right for you, speak to us about your options.

Cover amount

The amount of coverage you should get will depend on your income and your family’s needs. If you have a family, you’ll need to consider their financial requirements as well.

Benefit period 

The benefit period is the length of time you’ll receive benefits. Most policies have a benefit period of two years, but some policies offer longer periods of time.

Premium 

The premium is the amount you’ll pay for your policy. Premiums can vary depending on the type of policy, the amount of coverage, and the length of the benefit period.

The Insurer

When you’re ready to purchase income protection insurance, shop around. Get quotes from several different companies and compare them. 

Aside from pricing, it’s important to choose an insurer that you can trust. Research the company and make sure they have a good reputation. Good customer service ratings are essential, and turnaround time on claims is important, too. Take a look at the ombudsman reports for the insurer you’re considering to see if there are any complaints against them.

Seek Professional Advice 

When you’re choosing income protection insurance, it’s a good idea to seek professional advice. At Absolute Insurance, we can help you understand your options and make the best decision for your needs. We’ll work with you to find the right policy and ensure you’re getting the best possible value for your money. Contact us today to get started.

Related posts:

• Understanding Income Protection Insurance
• What Income Protection DOES NOT Cover

Reviewed by Greg Maguire

Greg Maguire reviewed this article to make sure the information is accurate and reflects current insurance practice. It is general advice only and does not take your personal circumstances into account.

Greg Maguire is an Authorised Representative (No. 255354) of AD Advisory Services Pty Ltd, ABN 68 005 830 802, AFSL 237058.

Greg Maguire

Principal

Greg Maguire is the founder and principal of Absolute Insurance, a family-run Perth life insurance broker he runs with his wife Steph. Greg has spent more than 20 years helping Western Australian families and business owners protect what matters most, with life insurance, income protection, TPD and trauma cover from Australia's leading insurers.

Before insurance, Greg was a primary school teacher, and that same patient, one-to-one approach is how he still works today. He takes the time to understand your situation, explains your options in plain English, and stands beside you and your family if you ever need to claim.

Greg holds an Advanced Diploma of Financial Planning from Deakin University and a bachelor's degree from Edith Cowan University. He is an active member of the local community through the Chamber of Commerce and Industry WA and Baldivis Rotary.

Greg Maguire is an Authorised Representative (No. 255354) of AD Advisory Services Pty Ltd, ABN 68 005 830 802, AFSL 237058.