Income Protection Insurance For Women

Published: July 28, 2013

How important is your salary? That is the question Australian women should be asking themselves leading up to the next financial year. Think of it this way: if you had no salary or income, how would you survive? This applies to all women in every situation, whether you are single or have a family.

This is why women should have income protection insurance to protect their lifestyle and loved ones. Income protection typically covers 75% of your salary if you become ill or injured and cannot work, making it extremely important for working women. It’s also possible to claim a tax deduction on your premiums.

Policy Maximum Monthly Benefit Percentage of Income Covered Benefit Period Waiting Period  
NobleOak Direct Income Protection AIA
$25,000
75%
2 years or up to age 65
30 or 90 days
Receive up to 75% of your monthly income with Income Protection Insurance. Cover essential living expenses when you’re unable to work due to an illness or injury. Consider the PDS. Issuer is NobleOak Life Limited ABN 85087648708. AFSL 247302.

Single and without income protection insurance

Being a single woman may come with freedom, but times can get tough if you become ill or injured and have no one to rely on financially. The 2001 Census revealed about one fifth of all Australians are living alone, and the Australian Bureau of Statistics predicts that in 20 years the number of single-person households will increase by up to 105%*. Many of these are single women who have credit card debts and mortgages/rent.

Getting divorced or becoming widowed is becoming more common for many Australian women. But many women still fail to protect themselves for unforeseen illnesses if no-one is around to take care of them.

If you are single, there is generally no income back-up at all if you suddenly have to stop work. For example, if you broke some ribs during a skiing trip and needed extended time off work to recover, you could be left in an entirely different situation than a person with a partner.

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Married or have children without income protection

Even if you get married, and there is more than one income earner in the household, the financial burden of losing income can be enormous. Dual incomes are now becoming the norm in Aussie families to make ends meet, particularly if there are children. If you were to lose your income could you still pay for all of the bills? Would your family’s living standards drop?

‘It won’t happen to me, I don’t need income protection insurance’

Many women still seem to believe that “it won’t happen to me”, which could be why women in Australia are severely underinsured. A 2005 study by the Investment and Financial Services Association (IFSA) showed that only 20 per cent of full-time working mothers have enough insurance to cover their income for three years or more (the standard amount is 10 times the annual salary).

AXA research also shows that women are considerably less likely than men to have income protection insurance. Nationally, only 6% of Australians have income insurance, with only 24 percent of insurable income covered. For women this figure falls to about 14 percent.

You may think it’s too expensive, but are you willing to accept the risk of not insuring your income? That is why we asked if you “cared about your salary”, because if your income is truly important to you, you should insure it. Income protection insurance is not an “unneeded frill”, in this modern day it’s a necessity needed for survival.

Questions to ask when buying income protection

Premiums vary widely depending on the insurer, your age and occupation, and because actuarial data shows women may be more likely to make a claim, women often face higher premiums than men. But don’t let this stop you, as the benefits far outweigh the costs. Questions to ask when looking for income protection cover include:

  • Is the policy an agreed value or indemnity-style contract?
  • Does the income definition include superannuation, fringe benefits, over-time bonuses?
  • How is “disability” defined?
  • Is the policy guaranteed renewable?
  • When will partial benefits be paid?
  • Will offsets be applied, such as: workers compensation, sick leave and total and permanent disability payment?

Source: The Age, October 2005

Get the cover you need, so you are able to take care of expenses during extended leave from work due to sickness or injury. You can bridge the gap with income protection insurance. The funds from income protection cover can help pay for bills and living expenses.

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