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Why Purchase Income Protection Insurance


Buyers in Australia often wonder why they should purchase income protection insurance when they are also offered other types of insurance such as life insurance. The answer to this question is simple, once you understand how income protection covers work.

Life insurance covers protect the buyer’s family in case the buyer passes away due to an accident or due to natural causes however, income protection covers enable buyers to live life normally even after they have been involved in an accident or fall ill. This type of insurance ensures that buyers who cannot work temporarily get a monthly payment so that their lives are not put on hold. Income protection plans protect both the buyer and his family while he recuperates from an illness or injury. Income insurance plans only cost 2-3% of the policy holder’s annual income but they provide many benefits.

Income protection covers are available to people of various ages and the cut off age for such plans is 60 – 75 years. Depending on the requirements of the buyer, the annual income and the occupation, the buyer can insure his income for up to 75%. Since income protection plans are tax deductible buyers are required to declare all aspects or components of their income when they opt for insurance. Buyers who opt for indemnity contracts have to declare these components when they file for a claim and buyers who opt for an agreed value contract have to declare these components when they apply for the policy. Indemnity contracts are cheaper than value agreement plans since the latter has more benefits.

Income protection plans offer other benefits or incentives as well. These benefits include but are not limited to a death benefit for the policy holder, transplant surgery benefits for the policy holder and day one claim benefits. Some insurance plans also offer cosmetic surgery benefits. Buyers who want additional benefits can opt for additional types of insurance plans such as trauma insurance or disability insurance.

In an attempt to encourage buyers to opt for the services of their company, many insurance companies also offer online discounts, online quotes and other useful features. People who want to buy one or more income protection insurance plans should avail of these offers while keeping in mind that by getting multiple quotes and by comparing these quotes they can get good deals while saving on premiums. Some insurance websites allow buyers to compare quotes online by following a few simple steps.

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