Would you consider paying 1% of your wage (can be more or less) to extend your sick leave? If the answer is maybe, and you wish to learn a little more about income protection, please see below:

Income Protection
*Continues a portion of your wage/salary if you are too sick/injured to work. You should see your GP asap so they can record your date of sickness as early as possible to get a head start on the waiting period.
*Some are portable and can follow you around despite changing jobs.
*Flexibility of benefit period – 2 years, 5 years, age 65 are common options.
*Flexibility of waiting period – manual workers might benefit from a 14 day waiting period, others 30 days, and others longer. Beware that benefits may be paid 30 days in arrears, ie a 30 day wait may result in you receiving benefits after 60 days (30+30).
*Tax deductible premiums – some policies can be tax deducible, if held outside superannuation. Some policies inside superannuation maybe entitled to a 15% tax rebate.

Existing Policy Review & Price
*If you feel you are currently paying too much for your existing Income Protection, consult your financial adviser/planner/broker if it is appropriate to make changes to reduce costs. Things that you could potentially do include moving policies from outside super to inside super (for cash flow), move to lower cost waiting period or benefit period, tweak other policy options.
*If you improved your health, stopped smoking, changed to a different work industry, you might be eligible for a lower cost premium or removal of exclusions.
*Some policies are double the price for lesser quality – I recently found an industry super fund premium double the price of a higher quality fully underwritten retail fund.

Warnings
*Some policies may not pay you if sickness/injury occurs while you are unemployed.
*Some policies will not pay you for pre-existing health conditions for a waiting period that may be measured in years. These might be commonly found in group superannuation policies when you join a new employer (check your super statement), or advertised direct to customer policies.
*Some policies will reduce the pay out as your wage goes down.

Financial Planning
*Consider how much you could lose in your savings/investments if there was an unexpected accident/illness that took you out of work for a few months. For example, say your pay was $5,000 per month, and you were out of work for 3 months ($15,000). What if you were unlucky and were out of work for years? If the premium cost was $40 per fortnight (pre-tax deduction), would that income be worth protecting? What if that policy could potentially pay up to age 65?

Questions
*Ask your financial adviser/planner/broker for a comparison quote or insurance review (or me if you don’t have one). They have access to policies that are not available directly to the public.

Picture Source: Pixabay / Parentingupstream