Can you still get income protection insurance if money is too tight and you don’t have enough money at the end of the month? Ways to structure your income protection policy.
Income protection insurance is another expense. It’s important, however money is tight, is there a way to get income protection without it affecting your daily cash now.
Income protection will pay you an income should you not be able to work due to sickness or accident.
There are many different variables to income protection, each of these variables have an effect on what you are covered for. Some of these variables include
- Waiting period
- Benefit period
- Amount you can be covered for
- Payment structures
- Tax on income protection
- Occupation
- Evolution of income protection
In this series, I’m going to break down into bite sized chunks these different variables.
Payment structures
Income protection is another expense. When it comes to paying for your income protection insurance there are two ways you can pay for the insurance.
- Pay for it directly. This is when you pay for your income protection policy from your after tax dollars. In other words, after you get your salary. When you do this this way, you claim the amount you pay for your cover as a tax deduction, so you get some money back.
- Pay for it through your superannuation fund: Should you find that at the end of the month you don’t have money left to afford an income protection policy, yet it’s important for your to have a policy, you can structure it thorough your superannuation fund. When you do it this way, the superannuation fund will claim the tax deduction rather than you claiming it.
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