The Income Protection Gap No One Talks About 😳

Replying to @ELLS If your employer is giving you an income protection policy for five years at 70% of your pre-disability income, that is a really strong starting point.

But you’re right. At the end of that five-year period, the policy stops. If you’re still unable to work, that income also stops.

One strategy can be to take out a second policy with a five-year waiting period, payable through to age 65. Because of the longer waiting period, premiums are usually lower, but it means if you’re still unable to return to work after those first five years, this policy can then step in and continue supporting you.

It’s also important to check whether the policy includes superannuation guarantee contributions. Some policies only cover income, not super, which can impact your long-term retirement position if you’re off work for an extended period.

Realistically, the chances of needing income protection all the way to age 65 are low. But insurance is there for the “what if.” You’re paying for peace of mind, hoping you never need it, but knowing it’s there if you do.

And if you structure it well, you’re not just protecting your income today, you’re also protecting your future self.

General advice only.
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