Various insurance companies are now gearing up to push income protection as governments of Victoria, Queensland, and New South Wales are looking to cut workers’ compensation schemes. Lots of workers in Australia are not covered by this because they believe that their state government’s workers’ compensation scheme is enough to provide them with financial assistance in the event of sickness and injuries. But what they don’t know is that income protection insurance goes far beyond providing financial assistance and can cover more than what workers’ compensation does.
Income protection is basically a type of insurance that provides payout in the event the policyholder is not able to work for a period of time due to sickness or injury. Unfortunately, according to a survey by Lifewise, in Australia, there is only about 31% of Australians who are covered by income protection. That’s roughly one-third of the population, which only means that majority of Australians rely only in workers’ compensation schemes run by the government. But with the cut that the governments are considering, rules on compensation schemes could change any time, so there’s no certainty if a certain workers’ compensation payout will still be available tomorrow or in the years to come.
To have peace of mind then, workers must not rely on handouts like government support if the breadwinner in the family suffers a serious illness or injury and is unable to work. Governments could not tailor their support system to meet all the needs of each individual – any minute, compensation scheme could change since governments are looking to reduce the relatively high cost. And so, AIA, which is Australia’s largest group insurer, agrees that workers’ compensation must not be viewed as the only solution for financial support in case of inability to earn income – income protection must also be deemed necessary and must be made part of any worker’s overall protection needs.
Generally, income protection provides coverage over the long term with benefit periods of up to 65 years old. And in most cases, premiums for this type of coverage can be tax deductable. Rates of premiums vary from one insurance company to another, as there are several factors being looked into such as age, gender, and job or occupation. Insurers will discuss these details to their clients to give them a clear understanding of what income protection is all about. Free insurance quotes may also be provided to offer clients with various options.