Income Protection Insurance - where to start

[danwatto]

Hi All,

Having doubled my IP debt recently and increased LVRs, I'm thinking it's time I took out some insurance for my income.

However I've never ever looked at this kind of insurance before.

With lots of loans and more than the usual amount of properties, I'm assuming buying insurance online via comparison sites is probably not a good idea and that I might need a broker?

Can anyone recommend a good broker?
Or a particular insurer that works well with property investment?

Also anyone keen to share good or bad experiences with income protection insurers? Any I should avoid?

Thanks

 

[wylie]

Go for a policy that covers you properly for "your" job, and doesn't force you back to work when you are capable of doing "anything at all".

The policy hubby has covers him 24/7 doing anything if he is hurt and cannot work (even though he isn't working now - apparently. We have checked this with the broker and the insurer but never had to make a claim. While we have big debts, we keep the policy.)

I have a friend who worked in the insurance industry who sold herself the Rolls Royce of policies and went on claim at least 15 years ago. Two of her friends had lesser policies and were cut off or paid out measly sums. The right policy is so important.

Give Jason Nairn a call or email. He has looked after us well. He is based on the Gold Coast, but that shouldn't make any difference.

Jason Nairn | Director
Linked Financial Services
are Authorised Representatives of AMP Financial Planning Pty Limited
Suite 5, 211 Ron Penhaligon Way, ROBINA, QLD, 4226 | PO Box 711, Robina, QLD, 4226
T 07 5593 0561 | F 07 5593 0103 | M 0432 918 214
[email protected]

 

[Peter_Tersteeg]

Good advice above, you don't want to be forced to go work an Coles when you used to be qualified as a rocket scientist.

Also consider level premiums instead of stepped. Ask for a comparison of the costs over time and ensure you understand the benefits. Level premiums will cost more initially, but they don't increase as you get older and will save you significantly more money in the long term. A lot of people cancel their insurances in their 50s because they can no longer afford the premiums; right about when they're more likely to actually need the insurance.

 

[HD_ACE]

The most important points

- Same job
- Paid until 65 not just 1 or 2 years
- Alter your waiting period from 30 to 60 or 90 days to decrease premiums as long as you can self insure that waiting period.

 

[danwatto]

Go for a policy that covers you properly for "your" job, and doesn't force you back to work when you are capable of doing "anything at all".

The policy hubby has covers him 24/7 doing anything if he is hurt and cannot work (even though he isn't working now - apparently. We have checked this with the broker and the insurer but never had to make a claim. While we have big debts, we keep the policy.)

I have a friend who worked in the insurance industry who sold herself the Rolls Royce of policies and went on claim at least 15 years ago. Two of her friends had lesser policies and were cut off or paid out measly sums. The right policy is so important.

Give Jason Nairn a call or email. He has looked after us well. He is based on the Gold Coast, but that shouldn't make any difference.

Jason Nairn | Director
Linked Financial Services
are Authorised Representatives of AMP Financial Planning Pty Limited
Suite 5, 211 Ron Penhaligon Way, ROBINA, QLD, 4226 | PO Box 711, Robina, QLD, 4226
T 07 5593 0561 | F 07 5593 0103 | M 0432 918 214
[email protected]

Thanks Wylie, I finally got around to calling Jason recently and he helped me sort something out.

Cheers

 

[Hysteria]

Let me assure you it will be of great comfort knowing that you are covered.

I recently activated my income protection for the first time in 17 years.

When the Doc told me I may not be back at work for 6 months it was of some relief knowing I had that protection.
It wasn't a workplace injury so I had no grounds to claim on.

The policy paid out from the day of injury and pays to 65.

That many people tell me how lucky I am to have income protection...luck is when you win the lotto. You have a choice to have insurance or not.

You have made a good choice. You will sleep better!

 

[Big Will]

If you cant afford to lose it then insure it, I think is the line they use but it makes sense.

Yes I hate paying for all my insurance, however if something went wrong or worse I died I know that my wife and child will be financially okay and can grieve without having to worry.

If I get cancer and need kemo I wont have to worry about our expenses and will be able to pay for any out of pocket expenses.

 

[danwatto]

It's alot cheaper than I thought too.

The policy I'm going for pays for up to 6 years 75% of my IT job income, and is only $1100pa. That's on level premiums too, so it only goes up with indexation not age.

After 30% tax deduction, that's only $770pa, cheaper than a single building insurance on one of my IPs.

If I get sick or injured or whatever, I'll still have enough income to both live and service my IP portfolio.

6 years is $600 cheaper than payouts until 65 for me, and in the very slim chance of me being sick more than 6 years, I will live off my portfolio after that. Should get some growth just by sitting on the portfolio in that period.

The best thing is it gives me peace of mind to keep growing the portfolio, should anything happen to me I know I can afford to hold it with the insurance income.

 

[Alex P Keaton]

I'll be investigating this when I'm on holidays in Feb. can anyone recommend a good Perth insurance broker?

 

[wylie]

I'll be investigating this when I'm on holidays in Feb. can anyone recommend a good Perth insurance broker?

You don't need a local broker. We only met Jason because he took over the business from the previous broker we'd used for probably over 15 years, and I never met him.

We did everything by phone call or email.

 

[D_One]

I reviewed my insurances last week and Jason did a great job looking after me as well. Everything was done over the phone and email. He responds to emails and phone calls within 30 mins. My wife even understood everything when he spoke with her.

I'll recommend him.

 

[S.T]

Any of you guys have redundancy insurance attached/optioned to income protection?

 

[danwatto]

Any of you guys have redundancy insurance attached/optioned to income protection?

I didn't as I want to keep the cost down. But to me the risk is low because:
-5 year service, would mean a payout if redundant
-Contacts I can get a job with
-Properties are neutral/positive cashflow

To me this insurance is something I never want to claim on, and I think the chance of claiming is fairly low. But if I really can't work due to sickness or injury I WILL need something so I have a policy, albeit one that's not too costly in the meantime.

With the higher unemployment rate though, could be something to consider! But talking to your financial planner is the best option, as everyone's circumstances are different..

 

[S.T]

Just curious as I recently took out redundancy insurance extra with my policy.

Premium is an extra $55 a month. Cant claim in the first 6 months since taking out this extra cover.

Pays out $3000 a month for 3 months on being made redundant.

 

[danwatto]

Interesting.
I pay annually so that's probably about $600pa extra.

Not too bad actually, but not needed for me.

 

[Big Will]

Just curious as I recently took out redundancy insurance extra with my policy.

Premium is an extra $55 a month. Cant claim in the first 6 months since taking out this extra cover.

Pays out $3000 a month for 3 months on being made redundant.

Doesn't seem that great unless you think it will take you more than 6 months to find a job :S.

 

[S.T]

Doesn't seem that great unless you think it will take you more than 6 months to find a job :S.

I'm not sure I worded that correctly, it's a 'waiting period'. So you have to pay 6 months of the premium before you can claim. Meaning, if you take it out today, you cant claim until June 18th. So if you get made redundant before 18th of June, bummer. But anytime after, you can claim.

 

[S.T]

Interesting.
I pay annually so that's probably about $600pa extra.

Not too bad actually, but not needed for me.

I worked it out that I should profit from it, if I get made redundant in the next 13 years. Very rare to have a job for 13 years these days I'd think.

Max $9000 payout

13 x $660 = $8580

Other factors come into play, I may not be out of work for very long etc. Just gives me some protection in case of redundancy plus the extra premiums should be tax deductible.