Income protection is changing from 1st April this year. How does this concern you? Well, if you’re self-employed or a contractor, you definitely need to take action now.
Income protection insurance provides replacement income to policyholders if they become unable to work due to sickness or injury. Currently, when an income protection policy is taken out, an “agreed policy” is purchased. This means that the policyholder and insurer agree on an amount based on earnings at the time of contract, therefore if you have a decrease in earnings, you are still covered for the full amount stated in the policy.
From 1st April, this is changing. Individuals will no longer be able to purchase an agreed value policy. Instead, in the event of sickness or injury, income payments will be made based on annual earnings at claim time. This is a big deal for self-employed or contractors whose income fluctuates throughout the year!
What should I do? This update is coming into effect from 1st April, so take action now by updating your existing policy to secure the agreed value before it is no longer an option! Alternatively, if you don’t currently have an income protection policy in place, it’s time to ensure your most valuable asset – your ability to earn a regular income.
Why should I insure my income?
You probably insure your home, its contents and your car. Yet your ability to earn a regular income often gets overlooked in the insurance stakes. This may be because we often think we won’t come in harm’s way. But a simple run around the park with the kids or a drive to the shops could see you experience an unexpected injury that could put you out of work for weeks – even months or years.
Your income is something you shouldn’t overlook – research shows that 77% of Australians aged between 45 and 64 don’t have adequate levels of insurance*. Talk to us to make sure you and your loved ones are protected.
*Source: KPMG Underinsurance – Disability Protection Gap in Australia Report, 2014.
Your income is worth protecting.
How can Carbon Wealth Management we help you?
At Carbon Wealth we specialise in income protection insurance and understand how important it is to protect your family is what we do. Let us help you understand the legislative changes by undertaking a review of your personal insurances.
Please contact our financial planning team on 08 6444 6645 or fill out the contact form below.