How to best protect your wealth: is insurance the answer?

Without a regular income, covering basic expenses can be very tricky for anyone. Bills, groceries, rent – these things are essential for a comfortable life. Plus, if you have a home loan to pay off and a family to provide for, things just get even more complicated from there

Can you imagine how stressful it would be to afford your living expenses if you had no income?

If you and your family significantly rely on one family member’s salary to provide the basic living costs, it may be worth exploring how income protection insurance can provide peace of mind.

What is income protection insurance?

As the name suggests, if you fall ill or get hurt and are otherwise unable to work, an income protection policy provides income insurance.

Income protection is a type of life insurance that provides income for an individual when they are unable to work due to illness or injury. 

What does income protection insurance cover?

The standard income protection cover allows you to claim 70% of your regular pre-tax income. It could be the ideal level of cover for your living expenses to be taken care of while you’re unable to work. 

It’s important to evaluate your personal insurance needs to make an informed decision on which income protection cover would be most suited to you. If you need guidance, it may be best to seek expert advice from a financial adviser.

However, if you feel you won’t need that much coverage, it’s possible to choose a lower benefit instead. That said, it’s always best to check the PDS (product disclosure statement) to see what a specific insurance policy covers.

The insurance cover works like receiving a work salary does: it is usually paid monthly.

How much should an income protection policy be? How much does income protection cost?

The cost of your income protection insurance policy will depend on many factors: the provider, the policy, your salary, and the level of cover you decide on.

When setting the level of coverage you get from an income protection policy, it’s key to strike a balance. 


Too little cover won’t be financially beneficial or provide the peace of mind you need; too high and premiums will be expensive and outweigh the cost to benefit ratio.

It may be worthwhile starting from your existing budget and take the following into consideration:

  • Living expenses (groceries, bills, rent, petrol)

  • General loan repayments

  • Monthly mortgage

  • Possible medical bills

  • School feels (if children are in the picture) 

While income protection insurance can seem expensive, a financial planner can support you to analyse the cost to benefit ratio of your personal situation and find the right wealth protection solution.

Need financial advice related to wealth protection and income protection insurance?

Looking to work with reliable financial advisers in The Southern Highlands? 

Drop Poole Advisory a line today! We are a boutique financial advice firm offering sound financial advice. Our team can’t wait to assist you through our suite of financial services.


Compliance Disclaimer:

This information contains general advice only, that is, advice which does not take into account your needs, objectives, or financial situation. You need to consider the appropriateness of that general advice in light of your personal circumstances before acting on the advice. You should obtain and consider the Product Disclosure Statement for any product discussed before making a decision to acquire that product. You should obtain financial or credit advice that addresses your specific needs and situation before making investment or borrowing decisions. Taxation information is based on our interpretation of the relevant laws as at 1 July 2018. While every care has been taken in the preparation of this information, Prosperitas Partners Pty Ltd does not guarantee the accuracy or completeness of the information. The case studies are hypothetical, for illustration purposes only and are not based on actual returns

Poole Advisory Pty Ltd ABN 15 642 040 604 is a Corporate Authorised Representative (No. 001282603) of Prosperitas Partners Pty Ltd ABN 30 662 654 453 AFSL 544 917

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