Guest Blog: You’re worth $5,000,000, should you protect it?

By the resi financial blog team, 10 March 2014

Should I get income protection insuracnce

Do you protect the loss or theft of your $30,000 car? If so what is the cost of the premium to do so and how much will you get paid out?

If you are a 25 year old worker who earns $75,000 a year indexed for the rest of your life then you are worth $5,000,000*.

So if you are worth $5,000,000 should you insure yourself for not being able to work?

The question is rhetorical yet only about 6% of Australian's currently have an income protection policy in force. This means the bulk of Aussies are walking around paying thousands in insurance premiums every year insurance for cars, home and contents, health care but their most valuable asset is uninsured and they are vulnerable. The only beneficiary of one of these policies is you and the only person that suffers should you need it and not have it is predominantly you again.

Furthermore, as the cost of the premiums for such policies are tax deductible. This means the government will meet part of the cost of these policies. For example they will pay 38.5% of the premium for those with an income of $85,000.

There are a range of different options available in the market to get this sort of protection. However, the content of the policy is very different between offers so professional assistance is recommended. A good adviser will be able to assist you with the following in regards to evaluating an appropriate strategy:

  • Nature of contract and when the insurer will not pay
  • Type of premium structure and the impact this will have over time
  • Waiting period that applies to the policy before you are entitled to receive benefits
  • If you are on claim how long will the benefits be paid and what is the nature of these payments.

Looking for more advice and support on how to maximise your financial situation? Book a free no obligation meeting with the team at Resi Financial Services.

Article by Robert Coyte - courtesy of Shartru Wealth.


Written by Robert Coyte, Shartru Wealth Management Pty Ltd. ABN 46 158 536 871 AFSL 422409 *Calculation based on receiving $85,000 indexed annually at 3% for 35 years.The advice is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstances.

Categories: Financial Services, Guest Blog, Shartru Wealth