Many Australians will have some level of income protection within their superannuation, especially if it's an employer-sponsored super fund.
Unfortunately, many Australians also believe that the income protection within their super fund will be sufficient to protect them when they need it, however the truth is somewhat different...
Employer-sponsored and industry super funds generally only have benefit periods of two or five years. Whilst this is fine for a short-term period away from work, what happens if something more serious happens and you are away for ten years, or even for the rest of your life?
Thankfully there is a way to top-up your income protection insurance, and it doesn't mean having to cancel your existing cover, which is generally provided either free or at a low cost.
Getting a new income protection policy with a 30 day waiting period may not be cheap, but because you already have income protection in your super fund that will pay for up to two years, you only need your new policy to kick in after two years.
A new income protection policy with a waiting period of two years is going to be very much cheaper than a policy with a waiting period of 30 days.
This way, your super fund insurance will pay you for the first two years, then your new income protection policy will kick in after that and continue to pay you until you reach age 65 or are able to return to work, whichever is sooner.
Some income protection policies offered within super funds can be free or very cheap, but they can also be very basic policies which are difficult to claim on. Before making any decisions it is best to study your existing cover to make sure it is a decent policy. If it's not, then you may be better off replacing it.
If the idea of comparing different income protection insurance policies seems daunting or you just don't have the time, a licensed financial adviser will be more than happy to do the research and running around for you.
Depending on the financial adviser you use, often there will be no additional costs to you for doing this work, as the adviser will be paid by the insurance provider rather than having to bill you for the work.
Income protection insurance is vital in protecting your and your family's financial security. Whichever way you and/or your adviser choose to structure your cover, it is hard to beat the feeling that comes with the peace of mind knowing that everything will be okay financially if you are struck down by illness or injury.
For more information on income protection insurance please follow this links within our website or contact your financial adviser.