For many the unfortunate answer to that question is no! Alarmingly, one in three Australians will be off work for more than three months during their working life.
Also, less than 10% of Australians have Income Protection insurance. Put the other way over 90% of Australians don’t insure their income. What makes the situation worse is that many of us don’t have an adequate cash reserve to fall back on.
Many more people insure their car, house, boat and caravan, which are worth significantly less than their income.
I was recently preparing some advice for a 43 year old Electrician whose income was $91,000 per annum. His potential income over the next 22 years (to age 65) would be in excess of $2.7million. This is with his income increasing by only 3% per annum.
His income was therefore worth significantly more than his house, car or any other asset he owned, and more importantly, he probably would lose some or all those assets if he couldn’t work for a lengthy period due to a sickness or accident.
Workers Compensation is not the safety net some think it is, as it only covers an accident at work or travelling to and from work. Half of all serious accidents occur away from work so are not covered by Workers Compensation. Furthermore, most income protection claims are for illness rather than accident.
51 yo Carpenter male NSW earning 64,000 p.a. non smoker cheapest v dearest price difference is 62%.