02 9294 8246

What is Income Protection?

Income protection is an important type of insurance that helps replace your income if something happens that stops you from working and earning your normal living. Income protection generally pays a monthly benefit of up to 75% of your income, once your selected waiting period has passed. It is paid out to you in the event you cannot perform in your usual occupation due to any illness or injury that occurs to you. It simply acts as a replacement income for you, should you be unable to work. It is designed to cover your usual bills, rent/mortgage, living expenses or whatever it is that you generally spend your income on. 

Income Protection is tax deductible, as the benefit is taxable. (See your accountant for rules that apply).


Am I covered for playing sports? 

Most sporting and recreation activities are covered by your insurance policy. However - Not all insurers will allow coverage for some passtimes ie, all codes of Football or any amature bike racing.

At F40 Financial we will do our best to source insurers that will allow for the maximum passtimes to be insured. Generally you are covered 24/7 worldwide. Some exclusions will apply. 

Speak to your adviser to find out if any exclusions may apply.


How will the insurance help me return to work? 

Depending on the policy you choose there can be a rehabilitation expenses benefit included in the policy. It’s one thing to fall sick or seriously injured, stop working and have an insurance company cover your costs but quite another to have them see you out and assist you with returning to work. It’s in the best interests of everybody to have you return to work, hence why insurance companies do offer a valuable benefits like this.


What is the Critical Illness or Booster option? 

The Critical Illness or Booster option is a lump sum benefit paid to the life insured if they suffer any of the listed Trauma conditions in the product disclosure statement (PDS). It usually pays six times the monthly benefit without the need to have a separate Trauma policy. It is a cost effective way to gain more coverage with out the hefty price tag. 


What if I am a Sole Trader or in Partnership?

If you are a sole trader/proprietor or a member of a partnership, you are not a worker of your own business and cannot take out workers compensation insurance to cover yourself. A workers compensation policy will only cover your employees if you have any. If you are not an exempt employer and you employ any workers, or apprentices or trainees within the meaning of the Apprenticeship and Traineeship Act 2001, you will need to take out a workers compensation policy to cover them. A personal accident and illness or an income protection insurance policy may be suitable alternative insurance options for sole traders or the partners of a partnership. Please note that it is not a legal requirement to take out this type of insurance in the same way that workers compensation insurance is a legal requirement for employers. If you are hired as a worker by someone else, that person may need to take out a workers compensation policy to cover you. 

Examples

Barry is an electrical contractor. Barry is a sole trader/proprietor with no workers. Barry is Not eligible to take out workers compensation insurance.

Steve and Jason are tilers and conduct their business as a partnership. As they employ an apprentice, Steve and Jason are required to take out workers compensation insurance to cover the apprentice. The workers compensation insurance does not cover Steve and Jason.

Call 13 10 50 for more information about workers compensation insurance requirements for sole traders and partnerships.

F40 Financial has written authority to publish this piece of intellectual property.

http://www.workcover.nsw.gov.au/insurancepremiums/Policies/doyouneedinsurance/Pages/Soletraderpartnership.aspx