Income Protection Insurance is not usually a consideration for most young people. However, there areseveral arguments to be made for taking out an income protection policy even if you are younger – the most significant advantage being the price of premiums.
Income Protection Insurance protects you against the loss of income if you are unable to work in the event of an injury or illness. No matter what age you are, it is beneficial to have a policy in place to protect your livelihood.
Below are some of the benefits of Income Protection Insurance for younger workers to consider:
Cover your costs of living
Nearly half of young people could only cover the costs of living for one monthin the event something happened which meant they couldn’t work.If you’re forced off work, you still want to be able to cover basics like like rent, bills, food, and other essential expenses.
An income protection policy will pay out a monthly benefit of 75-80% of your monthly income, which is enough to cover your living expenses.
Premiums Are Cheaper
Being younger means you are considered less of an insurance risk substantially lower premiums.
Multiple factors are assessed when determining insurance premiums, age being the most important one as young people are considered less likely to claim on a policy.
By purchasing income protection insurance at a younger age, your policy will stay comparatively cheap. If you wait to purchase income protection policy in your forties, for example, you will probably pay higher premiums.
Maintain your savings
Money you have saved and invested can help you live a quality life when you are without any income for a period of time. But you probably want to use your savings toattain long-term goals rather than fulfilling your short-term requirements. Income protection insurance will ensure that you can continue to pay bills and essentials, while maintaining your hard-earned savings
Tax advantages
Income protection premiums are tax-deductible in Australia. Further, if you do have to activate a policy, when you receive the benefits, you can declare these payments under your tax return.However, the tax treatment of Income Protection will depend on your individual circumstances.
Life’s uncertainties
It is overwhelming to think about it, but illness or injury can happen to any of us at any time, without warning.We may aim to stay healthy and safe, but some things in life are outside our control.
Usually, people under thirty claim their policy due to causes like motor vehicle accidents or sporting injuries. Young people are generally active and there are risks associated with that..
Fortunately, income protection Insurance offers an affordable way to deal with life’s uncertainties.
It’s never soon to protect your income. Getting a mortgage, marriage, or the birth of a child are the biggest triggers for people to consider income protection insurance. But income protection insurance is a sensible precaution for all of us – regardless of age.