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Income protection / Life insurance


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#1 Jane Doe

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Posted 31 January 2011 - 08:07 AM

**I acknowledge this is a luxury and will allude to my husbands higher income, this is in no way, shape or form to antagonise or draw out the current trend of topics that are coming up at the moment**

Because I'm not working at the moment, I am finding myself watching a bit of daytime TV, and I have noticed the CONSTANT ads for Income Protection/Life Insurance.

So now it's something that I think about most days. What if something DID happen to DH that meant he could not work, we would be royally screwed. Genius marketing.

I did an online quote, and Income Protection including TPD was $150 per month ohmy.gif I just did another one, and the Income protection alone was $237 per month. Most others you have to put all your details and have someone call you back, and I don't want to do that at this point.

I did one online quote for $500k life insurance was ~$50k per month.

So, without wanting to be completely morbid, do you have IP/LI? Do you think it's worth it?




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#2 MrsBee

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Posted 31 January 2011 - 08:27 AM

When we bought our house last year our solicitor advised us to obtain at the very least death and disability insurance so that if something happens to one of us the other one is able to pay off the house and not have to worry about that.


We bought in October last year and I am still looking for a policy. We get screened out all the "you don't need to take a medical" policies because DH has a diagnosed heart condition. When I find a policy that is right for us we'll take it out/sign up.

We'll probably only purchase a policy for 5-10years so that it covers the time when our mortgage is the highest. After that we would probably be ok. We have good savings, and if worst came to worst we could sell the apartment and keep the house.

Not sure if that helps answer your question ... but that's my 2 cents worth smile.gif
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#3 AK2

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Posted 31 January 2011 - 08:32 AM

It's something we've been thinking about lately too, I'll be interested to read this thread.

One thing to keep in mind that most superannuation policies come with a TPD payout figure, so we are hoping to reduce the amount of LI etc to factor in that money in. It's still a lot though, isn't it!!

#4 aChocLover

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Posted 31 January 2011 - 09:55 AM


Yes - we have - we see it as one of those necessary evils just like other insurances.
Income Protection, Life Insurance & Trauma Insurance.
Costs us about $3K per annum.

And we only have additional amounts in those to what our Super provides for wrt Death/Disability etc.

I think risk vs likelihood makes Trauma Insurance look very attractive (over Life Insurance, considering our Super payouts on death - that is, in our personal circumstance).




#5 purpledixie

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Posted 31 January 2011 - 10:02 AM

Also will be watching this thread with interest because we are in a similar situation and should take it out.

I have heard that income protection insurance is tax deductable, not sure if that is true though or if it applies to all policies??

#6 bluenomi

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Posted 31 January 2011 - 10:27 AM

We haven't got any but both our supers have insurance with them. DH's is only enough to pay off the house but that would probably be enough if we needed it.
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#7 aChocLover

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Posted 31 January 2011 - 11:07 AM

QUOTE(purpledixie @ Jan 31 2011, 10:02 AM) View Post


I have heard that income protection insurance is tax deductable, not sure if that is true though or if it applies to all policies??


Yes, I believe it is .. but not life insurance or trauma insurance ... I think ph34r.gif

#8 Lee Lee

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Posted 31 January 2011 - 11:17 AM

We have both of these.

I do remember my DH had to go and get tests done - eg blood tests, medical exam he also had to provide details of his gp so they could be contacted.

For the life insurance I think his policy is a few million which costs a bucket load as most life policies aren't for very much.

Also for the IP insurance that also costs a packet as well as my DH took out a policy that would cover 75% of his income. A lot of the policies say they cover 75% of income upto a certain figure, so that might be that if you have an income of $100k they will cover $75k, however if you have a income of $200k they will still only cover $75k as that is the maximum benefit etc.

Sure these are a luxury, but where would I and the kids be if we didn't pay it?
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#9 ~AnA~

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Posted 31 January 2011 - 04:42 PM

We don't have income protection on our current property as if one of us cannot work, the other can still cover the mortgage quite easily. As some have mentioned, we have partial cover through both of our supers.

However we are thinking of buying another house, and when we do, we are definitely getting income protection. Income protection will be on top of the super's payout.

I spoke to a bank manager friend about it, and he suggested getting income protection and then within the 21 day period cooling off period, go and see a financial advisor (free service with our bank), who might be able to suggest a better income protection deal based on our professions (we're not in what is classified as 'high risk' professions).

And yes, we were quoted for $150/month, for both of us (I think it was both of us!!).

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#10 TEN

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Posted 31 January 2011 - 05:36 PM

We have income protection, TPD, Trauma and life insurance, for both of us. For all of that it costs around $200 a month. I loathe paying it, like most other insurance, but as AuChocolat said, I see it as a necessary evil.

Income protection insurance is the only part that is claimable on tax. Would be fabulous if it all was. I think it is a great incentive, seeing as if I have income protection insurance if something goes wrong, I won't be going on government benefits.

Again like AuChocolat, ours is above what is provided on our Superannuation policies, eg my Super will cover me for income protection after 2 weeks of no pay, up to 2 years, then my own insurance would kick in at the 2 year mark, until I am 65 (if required).

My father died very suddenly in a work accident when I was a child, and if he didn't have insurance my mother would have had to sell our family home, and our life would have been much harder. So that reinforces life insurance for me, as I know that nothing in life is guaranteed.

#11 Rome

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Posted 31 January 2011 - 07:50 PM


We have a life insurance policy which covers us both for $44/month (sounds like a bargain compared to what some others are paying!). We got that policy when our child was first born as we wanted her to have some financial support if anything were to happen to either of us. I hate thinking about it and hopefully we'll never need it, but you never know what might happen in your life. We also have an investment property and another policy would pay off that mortgage if either of us were to die. We've never bothered with income protection.

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#12 scasey77

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Posted 31 January 2011 - 10:25 PM

Yes, income protection is tax deductible to the individual. Life insurance isn't but if you own it through a self managed super fund it is deductible to the fund. Just in case that applies to anyone.


QUOTE(TEN @ Jan 31 2011, 04:36 PM) View Post


Again like AuChocolat, ours is above what is provided on our Superannuation policies, eg my Super will cover me for income protection after 2 weeks of no pay, up to 2 years, then my own insurance would kick in at the 2 year mark, until I am 65 (if required).



I would just double check on that. As far as I know superannuation funds would not be able to pay out on income protection policies as I don't see how you meet a condition of release through loss of income. Although one of the conditions is "financial hardship" but I believe that is very hard to get. They can pay out on life insurance and TPD. Anyway, just thought I would mention it and I am by no means an expert - just know the rules from a taxation point of view.

To answer the OP - we have life insurances, income protection and TPD for both of us. For us they are almost non negotiables because if something did happen to either of us the other would need the payouts in order to continue life with the kids as normally as possible. That is particularly the case for life insurance.
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#13 aChocLover

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Posted 01 February 2011 - 05:52 AM

QUOTE(scasey77 @ Jan 31 2011, 10:25 PM) View Post

I would just double check on that. As far as I know superannuation funds would not be able to pay out on income protection policies as I don't see how you meet a condition of release through loss of income.


Govt supers cover income protection, 75% of your wage for up to 2 years. Not sure if this is across all State & Federal Super funds though. Its actually an insurance policy within the super itself. I'm not sure how it all works, but I know that if, for example, a govt employee was to go out on sick leave (stress, cancer etc), the govt super fund would pay 75% of the wage for up to 2 years (i think they have the option of paying you out if they determine you won't be better by the 2 years), with no impact or reduction in the employee's super balances.

QUOTE(scasey77 @ Jan 31 2011, 10:25 PM) View Post


To answer the OP - we have life insurances, income protection and TPD for both of us. For us they are almost non negotiables because if something did happen to either of us the other would need the payouts in order to continue life with the kids as normally as possible. That is particularly the case for life insurance.


And also agree with scasey (my bold), if you're going to get life insurance, make sure its on both of you, not just the income earner or higher-income earner - if something were to happen to the non/lower-income earner then there's likely to be an impact to the high-income earner's capacity to maintain earning the same $ or potentially increased costs (whether that be due to reducing hours to look after children, needing carers or service providers for children/family/house etc).



#14 deleted user005

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Posted 03 February 2011 - 02:59 PM

We have just signed up for life insurance. It was never something we thought about pre-pregnancy but with the baby due any day it seems important.

We have a pretty low income. DH is the only wage earner and brings home less than $50K per year so we don't have a lot to cover and as a result the insurance was quite reasonable ($10 per week to have both of us covered for a lump sum amount) the insurance includes terminal illness/trauma where part of the lump sum would be paid out in the case of a terminal illness or trauma that resulted in DH not being able to work.

I truly feel like it's SO worth the money, it's such a huge thing that I don't have to worry about now which is such a relief. Losing DH would be so devastating and anything that would make the transition easier is so important I think.

I have covered DH for more than me, because he is the wage earner but have also covered myself because if something happens to me, I want him to be able to take time off work and rebuild a life without having to worry about money.

We don't have a mortgage though and live quite frugally so the amounts we are covered for aren't much compared with some of you will be looking at, and that obviously makes it much cheaper.

#15 Tigridia

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Posted 03 February 2011 - 03:10 PM

Just a note on the IP through Super (I"m talking about government super here) I have been unable to work for 3 years and was employed through the Government. I have now been declared totally and permanently disabled and get an invalidity pension through my super. However, it took until mid last year for this to come through after a long process of assessments and applications. I am still going through the case to get the funds for the 2 odd years I was off work with no income. So while there is protection there it isn't quick or easy to access.

There are exceptions of course, if you are diagnosed with a terminal illness it can be quicker to get money but it is still not a quick process. Don't assume you go off work one day and you'll have money the next fortnight. It really doesn't work like that!


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