Protecting your most valuable asset Author: Konrad Moore Your ability to earn an income is likely to be your biggest asset in life. According to the NATSEM report*, someone who has a bachelor degree is likely to earn about $2.9 million over their lifetime. It’s important to consider what would happen if you were suddenly unable to earn an income and what the impact would be on your family. How would you pay weekly expenses and bills, let alone mortgage repayments and school fees? Fortunately, there is a way to protect your greatest asset. Income Protection Insurance can provide you with up to a seventy-five per cent replacement income if you are unable to work due to illness or injury. The benefits are yours to spend as you choose and the premiums are tax deductible, reducing the overall cost of your insurance. It couldn’t happen to me… No one wants to focus on confronting issues such as illness or injury. The unfortunate reality is that misfortune can strike at any age and when you least expect it. The best time to take out insurance is when you are in good health. As you age, you can suffer health-related issues making it more difficult to obtain cover. Dispelling the myths Many people believe they are sufficiently covered elsewhere or that the government will step in. But your safety net may not be as robust as you think.

• Sick leave entitlements: Typically, salaried employees can accrue up to one to two months sick leave over four to five years with an employer. However, this entitlement does not move with you when you change jobs and a serious injury or accident may mean you are off work for much longer than your sick leave will cover.
• Workers’ compensation: Covers illness and injury associated with the workplace but many serious accidents occur elsewhere, leaving those without cover vulnerable.
• Insurance in superannuation: Superannuation plans may provide some insurance cover, but it is typically limited to death and permanent disability.
• Private health cover: Limited to medical expenses such as hospital stays, and does not extend to general living expenses.
• Social security payments: Very restricted and unlikely to allow you to maintain your standard of living.

Income protection should be an integral part of your overall insurance needs, which can include Life, Trauma and Total and Permanent Disability (TPD) cover. As a financial planner, I can help you work out the right level of insurance for your family’s particular circumstances, with an obligation-free appointment to discuss how to protect your family.   *AMP NATSEM 32 – Smart Australians – Report (24 October 2012)   General Advice Disclosure: This document contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, AMP Financial Planning and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information.