Australian insurance companies provide income protection cover for temporary as well as permanent disability. You will be considered disabled, if you suffer a reduction in earnings of 20% or higher. Then you will be eligible for cover until you return to work.

Disability Insurance

Disability insurance is another name for income protection insurance and is generally a part of life insurance which provides you with enough financial support in the event of an illness or injury. Sometimes you might come across a situation where you can't work for the rest of your life. In such cases, you will receive your insurance in the form of disability insurance.

Degrees of Disability

If you have income protection insurance, you are entitled to receive the cover in three different ways - permanent disability only, temporary or permanent disability, and total and permanent disability. Any of these options can be chosen when you first apply for the insurance. If you chose the first, you will receive payouts only when you are permanently disabled and it will continue up to the age of 65 years. With temporary disability, you will still get monthly payments, but it will be only for a short period of time, say one or two years. The total and permanent disability allows you a lump sum payment. The only difference is that you will get a lump sum payment instead of monthly payouts which can be used to cover the medical expenses, pay bills, and even make an investment. This way you can plan for your future and get income to maintain your lifestyle.
Premiums for each category will also differ and is determined by your age, sex, smoking history, general health, occupation, how long you are prepared to wait for your first payment, and the type of insurance you want to chose (temporary or permanent). For instance, people with a smoking history and those who work in industries that are prone to accidents and injuries will need to pay a higher premium compared to others of the same age and sex.

TPD Insurance Payouts

Total and permanent disability (TPD) insurance often will pay you up to 75% of your annual earnings. However, the duration of payouts will depend on the amount of premium you are willing to pay. You can also choose from agreed value or indemnity options. The latter option is much cheaper, but the payouts will be based on your earnings at the time you make a claim. Whichever income protection cover you choose, it will enable you to lead a normal lifestyle even when you suffer from temporary or permanent disability.

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Income protection insurance is designed to replace your monthly income if you are unable to work through sickness or accidental injury. Whilst this type of insurance is a valuable investment for all employees, people are often put off by the industry jargon and the wide choice on the market. Here, we have compiled 5 easy steps to guide you through the process of buying an income protection policy.

1) Decide how long you want your policy to pay out
Before you start to look for income protection, you need to clarify how long you want your policy to pay out for if you are unable to work- this is called the 'benefit term'. There are two main types of income protection, short term policies and long term policies.
Long term income protection allows you to choose your benefit term, but most policies will pay out until retirement age. For example, if you protected your income until the age of 65 and became ill at 45, your policy would pay out until you either returned to work or you reached retirement age at 65. However, short term policies will only pay out for a maximum of 12 months even if you are unable to return to work after this time.
Someone who has been off sick for 6 months or longer has an 80% chance of being off work for 5 years. Long term policies give a much greater level of protection, but may have higher premiums.
2) Decide what you want to protect
Typically, income protection is designed to protect your income by paying you a tax-free monthly benefit. This money can be used however you deem appropriate. Most people use it to cover their essential monthly outgoings such as their mortgage, rent, bills, council tax and food. Others use it to maintain their lifestyle, by meeting the cost of gym membership, holidays or school fees. Income protection will generally pay up to a maximum percentage of your earnings, often 50 or 60 per cent.
Income protection insurance can also be linked to a specific debt, such as your mortgage or your loan repayments. These policies are usually short term and will only pay out for a maximum of 12 months. Mortgage Payment Protection Insurance (MPPI) will meet your mortgage repayments, whilst Payment Protection Insurance (PPI) will meet the cost of your loan or credit card repayments.
Policies that are linked to a specific debt are often more expensive than policies that replace your income.
3) What do you want to protect against?
Income protection is designed to replace part of your monthly income if you should be unable to work through accidental injury or illness. If you feel secure in your job and are not worried about redundancy, then this level of cover will be ideal for you- it will only pay out if you were to suffer an accident or sickness which left you unable to work.
However, most short term policies will include cover for redundancy as well as accident and sickness. Long term policies do not usually include cover for redundancy, but it can be added as a bolt-on for a higher premium.
Excluding unemployment insurance from your policy will make the monthly premiums cheaper.
4) How long can you survive on your savings?
The deferred period is the length of time after making a claim that your policy will begin to pay out. Policies usually offer deferred periods of 4, 13, 26 or 52 weeks, and you can choose your deferred period depending on your individual circumstances. Before buying an income protection policy, check with your employer about your sick pay- by law, an employer must pay statutory sick pay for up to 28 weeks- and work out how long you can survive on your savings or your partner's income before you start to receive your monthly benefit.
The longer the deferred period, the lower the cost of the policy will be. If you are looking to reduce the cost of your income protection, choose a longer deferred period.
5) Compare the market
Once you have decided what you want to be covered for, it is time to compare the whole market to find suitable income protection quotes. Whilst you could contact each insurer individually, it can be more beneficial to use a comparison website to view the whole market in a few easy steps.
However, income protection insurance varies widely depending on your individual circumstances. Your occupation, your medical history, your family history and your smoker status will all affect what type of policy you are eligible for and the price.
By comparing the whole market, you will be sure that you get the best level of cover at the right price.

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Protecting ourselves is something that we do take seriously, most of us will worry about something happening which could leave a lasting effect on ourselves or our family. It is imperative that we protect ourselves where possible and not always because it's the law to do so. As much as we may not want to purchase car insurance because we'd prefer the extra cash in our pocket, we know just how important it is to have in place because what use is the extra cash going to be when you're in an accident and need to pay for two cars to be fixed? If the money you saved by not having car insurance has been spent then you would really struggle. Will it ever be worth saving that small amount each month when by not having the protection devastating things could happen and you could be in a position where you are not able to cover costs.

There are many different forms of insurance available and each one of them is as important as the next but how do you choose which insurance is most important for you. If you don't choose the most important for you, you could be paying out your wage each month on different insurance policies leaving you with nothing to live on. Not everyone needs all of the different types of insurance that are available, some are required by law such as car insurance others are seen as an essential like home insurance and others are advised for the protection they offer such as critical illness insurance and income protection insurance.
Income protection can give you the peace of mind that no matter what happens at work you won't lose out, if you have an accident which means that you can't work, very few people can afford to be out of work and to not be paid for it simply because everyday expenses need to be paid like the mortgage or rent, the utilities and the food shopping. Being out of work without any form of backup plan or insurance policy will mean that you will struggle to meet your everyday expenses which could leave you in so much financial difficulty. By taking out an income protection policy you will receive a portion of your salary in weekly or monthly payments in replacement of your wage which will enable you to maintain your expenses while recovering or looking for a new job.
Being financially secure is one of the most important things for many of us because we don't want to face what might happen when we can no longer meet our everyday expenses this is why it is advised that you take out income protection insurance for a small premium each month. When you have an income protection policy you will be able to relax and lessen your worry about what would happen if you were to be out of work especially if it was for a long period of time.

It is important that when you've chosen what type of insurance you want to take out that you find an insurance policy which covers everything you need. You don't want to take out an insurance policy only to find when you claim on it that you're not covered, it is equally as important to ensure that you give out the correct information for your policy otherwise you could find that it ends up being void and you can't claim on it even though you could have been paying the premium for years. By taking your time and ensuring that you do everything correctly you can be assured that your insurance policy offers you all the protection you require.
Income Protect offer specialist income protection insurance to help you if you were to be out of work allowing you the time needed to recuperate or hunt for a new job.

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The spectrum of insurance is very vast and broadly covers life and non-life insurance. There are various companies that offer a number of different life insurance plans. These insurance plans cater to specific needs of clients, based on their current and future requirements. This is important because people invest in insurance to take care of their short term and long term needs, and the needs of their families.

There are a number of protection plans in the market that help secure your family in the unfortunate event of your demise. Depending on your financial requirements, these plans also offer you the flexibility to increase or decrease you insurance premium as the need arises. These individual protection plans are very practical because you only have to spend a little money every month or every year, depending on the plan you choose, and your family will be financially taken care of in the event of your untimely demise.

When you are considering the best insurance plan for your family, it is tricky business to decide how much insurance you actually need. Luckily, you can calculate the amount of insurance you need based on your lifestyle, the size of your family and your present and future needs. There are a number of family protection plans that will help you calculate this. You just need to feed in all your details and the insurance calculator will advise you on approximately how much insurance you need. You also have the option to change your details and re-calculate a different life insurance cover. This is an advantage, as you can look at different options before you decide on the best choices for your family life insurance.

Before you purchase a insurance policy, you should consider certain factors that will affect the policy. Firstly, you should consider the premium amount you are paying. The younger you are when you start paying your premium the lower your premium will be. The premium also depends on the condition of your health. Some companies consider if you are a smoker or a non-smoker. A smoker will have to pay a higher premium or get less coverage. If you increase your premium then the cover will also increase. So you should be aware of how much insurance protection you want and pay the premium that will ensure you get that amount of cover. Life insurance policies also offer riders, like additional cover for certain accidents and diseases that you may suffer. So you may want to look into that aspect as well before you pay your premium, and decide whether you would like to add certain riders to your policy.

Life Insurance Plan are an effective way of planning for future, be it of your children or your post- retirement. To know more about such Life Insurance Policy and their benefits, visit us here.

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See More →Protection Plans Are A Kind Of Life Insurance Only

Income protection insurance not only covers employed individuals. These days, it is also offered to self-employed people. Now, a person who owns and manages his own business can rely on the insurance to make sure he will continue to get income even if he suddenly becomes unable to work. While in the past, self-employed people are not provided the same income protection level as those who are employed, now, a self-employed perhttp://www.blogger.com/img/blank.gifson can rely on his insurance cover.

Income protection insurance for self-employed individuals can provide short-term to long-term benefit payments. Are you considering applying for and taking one? You may choose from available plans that may last until your expected retirement age. If you need to file a claim for a long term because of a serious illness or injury (whereon you may possibly not be able to return to work), your payout can be provided each month until the end of the policy term. You may also opt for multiple claims if your medical condition or injury will disable you to work for the short term.

How much can income protection cover especially for self-employed individuals? If you will scour the market, you may find income protection insurance that covers about 50% of gross monthly income. That means in case you will be disabled to work, the insurer will provide you or your family with a monthly amount equivalent to half what you used to earn each month when you were still able to work. There are insurance products that cover 65% to 75% of gross monthly earnings.

Once the claim is filed, the insurer will determine the self-employed individual's monthly benefit level, which is based on regular earnings during point of claim. Some insurance companies average income for the past three years while others look at the income history for the last 12 months. The enterprise's tax returns and bank statements can be examined for this purpose.

For self-employed individuals, income protection can be sufficient for making sure stability is retained in case they will be struck by severe illness or injury. Payout from income protection insurance can be used for various purposes. The self-employed policyholder may decide the use the proceeds to pay mortgages, monthly expenses of the family, utility bills, or other regular outgoings. The funds can also be used for business-related purposes. In the end, income protection insurance is a must-have for self-employed individuals.

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