Redundancy Cover For Income Protection Insurance In Australia

Income Protection Insurance Loss Of Job

Income protection insurance is a personal insurance product that provides an alternative income in case you become ill or injured and unable to work.

In the U.S and U.K, income protection also covers against unemployment.

In Australia, however, income insurance protection does not cover against loss of job, but it provides some financial support if you are in such a situation.

If you are wondering whether there is any value in having income protection insurance if you lose your job, there are certain considerations you should keep in mind.

Financial vulnerability

Income protection insurance loss of job provides financial relief when you are incapable of working. Serious illness or accidents leading to injuries occur at the least expected time, leaving you financial vulnerable. When the illness or injuries take longer to heal than your sick leave days, your salary could stop coming in altogether. This means you will have to use up your savings or even sell off your assets to support yourself.

Redundancy benefits

Although loss of job is typically not covered under income protection insurance, there are certain provisions that could assist you in case of involuntary unemployment if you visit our website. Note that this only applies if you lose your job because of redundancy – it excludes cases in which the insured has been fired or quits. Income insurers cover your premiums and mortgage repayments for a given period so you do not lose your cover or investment.

Insurance premiums are waived for about 6 months, allowing you to find a new job so you can get back on your feet. In the case of your mortgage repayments, your insurer makes the payments on your behalf for a given period. This is usually only available if you take out your mortgage with the same provider. Note that you are required to provide evidence that you are actively seeking new employment in order to receive these benefits.

Temporary incapacity

It is important to note that when you become sick or injured and cannot work, you would be physically incapable of working and earning a living. When you lose your job, you still have the ability to work, which is why Australian insurers do not cover this. However, you can still ensure that you receive some kind of financial relief should you lose your job unexpectedly. Note that even the redundancy cover provided to waive your premiums or cover your mortgage repayments may not be available in certain cases.

Some insurance providers also offer redundancy cover as a standalone policy, although this is typically offered by mortgage providers. In fact, mortgage protection insurance is usually compulsory when you take out a mortgage loan.

Income protection insurance can pay up to 75 percent of your normal salary in monthly payouts. This allows you to meet all your expenses and those of your loved ones, allowing you to focus on recovery. However, it is important to ensure that the income protection insurance policy you take out is suitable and adequate for your circumstances. You should therefore speak to you financial planner for an assessment of your insurance needs so you can get the best income protection insurance.