A health crisis can be financially devastating if you're unable to work. Income protection insurance is designed to provide a steady income while you recover, covering essential expenses and ensuring financial security. Here’s how Australians can use income protection and other strategies to safeguard income during health emergencies.
1. Income Protection Insurance as a Safety Net
Income protection insurance offers a regular income if you’re unable to work due to illness or injury. Most policies provide up to 75% of your income, helping cover bills and other expenses until you’re back on your feet.
2. Combining Income Protection with Savings
Creating an emergency fund alongside income protection insurance provides extra stability. Ideally, aim to save three to six months’ worth of expenses as a financial buffer.
3. Understanding Waiting and Benefit Periods
With income protection insurance, choosing the right waiting and benefit periods can reduce costs and match your financial needs. For example, a longer waiting period may suit those with savings, lowering premiums.
4. The Role of Critical Illness Insurance
In addition to income protection, critical illness insurance can help with recovery costs. Trauma insurance provides a lump sum for medical expenses, covering conditions like cancer or heart attacks.
Protecting your income during a health crisis requires planning, savings, and the right insurance coverage. For general advice on income protection, contact Hooper Insurance.
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