Income Protection Insurance and the benefits of protecting your superannuation

Income protection insurance is an important way to safeguard your income and living expenses in case of an accident or illness that prevents you from working. With income protection insurance you can be comfortable knowing that your current standard of living could be maintained if you had to take time off work but have you considered what might happen to your superannuation fund if you were unable to make regular ongoing contributions?

Opting to pay a portion of your income protection insurance into your superannuation fund may be a beneficial addition to your income protection policy as it allows you to maintain some level of superannuation payments even while you are unable to work.  Without some way of maintaining your super, it is likely that any payments you receive through your income protection insurance will be used up in day to day living expenses, potentially leaving you vulnerable when you reach retirement age.  The level of financial hardship you may encounter as a result of this increases with age and the number of working years you have left to replenish your super fund if necessary.

When choosing a superannuation option for your income protection policy, you can usually elect to either receive 75% of your payment directly and a further 9% into your superannuation fund or you can choose to have it all packaged together. Factors such as current lifestyle and level of debt are important considerations when deciding which option would be most suitable.

Superannuation protection is an optional addition to your income protection insurance policy but one that is well worth considering if you want to safeguard your lifestyle in the long term.

 

Advice warning disclaimer

More Information on Income Protection or Get Income Protection Insurance Quotes

Leave a Reply