Hello Fellow Investors,
I have been asked on many occasions to explain the difference between life insurance and income protection insurance. They are almost exactly what they sound like, and both of them can be important in protecting your lifestyle and family.
Income protection insurance is designed to replace a significant portion of your regular income typically up to 70% if you’re unable to work due to illness or injury. This type of cover ensures that you can continue to meet your financial obligations even when you’re not earning a paycheck. The payments can be used to maintain your lifestyle by covering essential living expenses such as rent or mortgage repayments, utility bills, groceries, and other day-to-day costs. By providing a steady stream of income during challenging times, income protection helps reduce financial stress and allows you to focus on your recovery without compromising your standard of living.
Life insurance is designed to provide a lump sum payment to your nominated beneficiaries in the event of your death. This financial support is typically used to ensure that your surviving partner, children, or other dependents are not left in a vulnerable position. The payout can help cover a wide range of expenses, including mortgage repayments, everyday living costs, education fees and outstanding debts. By securing life insurance, you’re helping to provide long-term financial stability and peace of mind for your loved ones, ensuring they can maintain their lifestyle and meet future needs even in your absence.
If you’d like to explore how these covers alongside Total and Permanent Disability (TPD) and Trauma Insurance can fit into your financial plan, feel free to schedule a meeting with us.
Joshua Napier (Associate)