Income Protection- one of a number of disability income products available
Your ability to earn an income is, for most people, their biggest asset. Think about how much income you could generate over your entire working life. (An example best illustrates what this all means: let's say you are 30 years old and you earn $84,000 per annum. Should you be disabled at age 31 and never work again, your lost earnings could exceed $3.7 million.) Then ask yourself, if you had an accident or became very ill and were no longer able to earn an income, how would you manage financially?
In some circumstances you may receive financial assistance form the Government. The probability is that it's unlikely to be enough to maintain your current lifestyle, let alone pay off the mortgage, provide for your children's education, plan for the future. (For more on this click here)
Income protection, a product paying you a regular monthly income for a predetermined period or to a predetermined age, can help you live the life you want to live. It can give you the ability to be financially independent regardless of whether or not you are able to return to work.
One feature you can have with an income protection policy is the ability not to have to pay your premium while on claim. In terms of this benefit your income protection premium is waived during that time. For other products, however, there is a specific benefit you can apply for. In the event that you are totally disabled and unable to earn an income then your financial priorities would change. The last thing you need to be doing is paying your insurance premiums during that time. And the last thing that you would want to be doing is cancelling your insurance because of financial strain. This feature- "Premium Cover", "Waiver of Premium", etc- means you would not have to pay your premium while you're on claim.
In some circumstances you may receive financial assistance form the Government. The probability is that it's unlikely to be enough to maintain your current lifestyle, let alone pay off the mortgage, provide for your children's education, plan for the future. (For more on this click here)
Income protection, a product paying you a regular monthly income for a predetermined period or to a predetermined age, can help you live the life you want to live. It can give you the ability to be financially independent regardless of whether or not you are able to return to work.
One feature you can have with an income protection policy is the ability not to have to pay your premium while on claim. In terms of this benefit your income protection premium is waived during that time. For other products, however, there is a specific benefit you can apply for. In the event that you are totally disabled and unable to earn an income then your financial priorities would change. The last thing you need to be doing is paying your insurance premiums during that time. And the last thing that you would want to be doing is cancelling your insurance because of financial strain. This feature- "Premium Cover", "Waiver of Premium", etc- means you would not have to pay your premium while you're on claim.
Another danger is that too many people believe that ACC will take care of them. So what are the chances of that? Previous statistics have indicated that 1 in 3 people between the ages of 30 and 65 will be off work for 6 months or longer. Unfortunately, only about 5% of them are for accident related causes for which ACC may be relevant (1). The overwhelming majority of people who will be off work for an extended period of time will be because of illness related issues, for which ACC is irrelevant.
Relying on a "sickness benefit"? You may think that Government assistance will be enough for you and your family if you become sick, injured or disabled, and lose your source of income. Depending on your age, personal circumstances (whether you have children a partner), where you live you may qualify for the Job Seeker Support and Supported Living Payment benefits. Check out what that means in actual $$ terms (2). It's important to ask yourself if this would be enough to cover your living expenses.
There are other disability income products available. One of them helps protect your mortgage repayments (click here for more) Another provides cover for household expenses apart from the mortgage. In most cases there would be no offsets against these benefits. (What is "offset"? When you receive another benefit because of the same disability, that amount could be deducted from your income protection). That is why it's important for you to carefully consider your options if you would like to achieve the best possible result. We can help you with that. Click here if you would like to email us, or call us on the numbers listed below.
So what are the chances?
Much of what has been said in relation to the impact of traumatic events also applies here. Consider also that in 2013 24% of New Zealanders were identified as disabled (3).
There are other disability income products available. One of them helps protect your mortgage repayments (click here for more) Another provides cover for household expenses apart from the mortgage. In most cases there would be no offsets against these benefits. (What is "offset"? When you receive another benefit because of the same disability, that amount could be deducted from your income protection). That is why it's important for you to carefully consider your options if you would like to achieve the best possible result. We can help you with that. Click here if you would like to email us, or call us on the numbers listed below.
So what are the chances?
Much of what has been said in relation to the impact of traumatic events also applies here. Consider also that in 2013 24% of New Zealanders were identified as disabled (3).
But the really worrying figure is this: about 1 in 3 people (actually that's 32% for males and 37% for females) will be off work for 6 months or longer before age 65 (4). Link that to further research data (5) and it becomes a more worrying picture- just 4 weeks after sick leave and annual leave (remember, if you are a business owner you don't have either of those!) ran out an overall 55% of households would be unable to pay all their expenses and maintain their lifestyle. Over 50% would not be able to meet their mortgage or rental payments.
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What does this mean to you?
Having the right cover in place can make an enormous difference to the financial security of you and your quality of life post such a disability happening to you. How many of those 60,000 stroke survivors in New Zealand needing significant daily support are unable to work and therefor unable to generate an income? There is no reason to put you and your family at risk by "doing it tough", or by making the mistake others have made in thinking "ACC will sort it.". If you would like help to see what you can do click here to email us, or call us on the numbers listed below.
(1) Statistics New Zealand, 2001
(2) Work and Income NZ Benefit rates at 01/04/2020
(3) 2013 Disability Survey, Statistics New Zealand,.
(4) Australian Institute of Health and Welfare (2001), Cancer Survival in Australia 2001
(5) Financial Services Council (Underinsurance- Income Protection Report), October 2012
Having the right cover in place can make an enormous difference to the financial security of you and your quality of life post such a disability happening to you. How many of those 60,000 stroke survivors in New Zealand needing significant daily support are unable to work and therefor unable to generate an income? There is no reason to put you and your family at risk by "doing it tough", or by making the mistake others have made in thinking "ACC will sort it.". If you would like help to see what you can do click here to email us, or call us on the numbers listed below.
(1) Statistics New Zealand, 2001
(2) Work and Income NZ Benefit rates at 01/04/2020
(3) 2013 Disability Survey, Statistics New Zealand,.
(4) Australian Institute of Health and Welfare (2001), Cancer Survival in Australia 2001
(5) Financial Services Council (Underinsurance- Income Protection Report), October 2012