'May PERAan' is SBS Filipino's new podcast series which features financial experts seeking to answer the most common questions about money and finances.
"Income protection or income insurance is different from death insurance, which only gets paid off when you die and it's for your family, or health insurance when you get sick," financial expert Michelle Baltazar explains.
Income insurance, on the other hand, is paid out to those who are too ill or incapacitated to work.
Highlights
- You might need income insurance if your salary is more than 100,000 AUD a year.
- Your superannuation has income insurance.
- You might need income insurance if you are under 30.
When you do: If your salary is roughly above 100,000 AUD a year
Michelle shares that you might need to seriously consider income insurance if you have mortgage repayments and if it's unlikely that you can immediately find another job that pays you the same amount of salary.
"In the past, I had a pretty significant salary. I had to fill up a form for income cover. It meant that if I got into an accident, I would be given 5,000 AUD per month."
She admits that 5,000 AUD would have probably only been enough to cover her mortgage and investment property repayments.
When you don't: If you have income insurance in your superannuation
If you have a super, you automatically have income insurance. Income insurance would vary though depending on the amount of super you have.
"If you earn 80,000 AUD a year, check how much of it goes to income insurance when it comes to your super. Check if the amount is enough for you to live on while you are unable to work," she shares, adding, "The good thing is you can top up or add more money to your super."
When you might: If you are under 30
"There is a new rule in Australia that if you are under 30, if you earn a certain amount, you don't have income insurance from your super. If you're a millenial, I suggest you check."
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Disclaimer: This article is for general information only. For specific financial advice, you should consider seeking independent legal, financial, taxation or other advice to check how the information here relates to your unique circumstances.
