Income Protection…the Goose or the golden egg??

It’s funny that when you mention personal risk insurance cover to people the very first thing that springs to mind is OMG, the cost.

“How much is this going to cost me?”

Well, how much is it going to cost you if something does actually happen to you and you don’t have any cover in place?

I sometimes use this following question with my clients when it comes to talking about gold coast income protection;

Question: If you owned a goose that laid golden eggs, which would you insure first; the goose, or the eggs?

Answer: The goose of course! Because as long as you have the goose then you’ll always be able to have the golden eggs, won’t you?

Now most people straight-out agree with me on this because it’s just so logical and pragmatic.

So, what is your most important asset?…your ability to earn an income, isn’t it?

Because without your income, everything else you have, or are going to ever have is academic.

Most people don’t give a second thought to insuring their cars, motorbikes, jet skis, household contents and of course, their houses but the income that enables them to fund these purchases is usually completely taken for granted.

According to some statistics I read recently, 83% of Australians have comprehensive insurance for their cars, but only 31% have income protection insurance in place.

Doesn’t this seem a little out of perspective with priorities?

Lets look at it this way; if you were unable to work again, how would you pay your bills such as groceries, home loan repayments, school fees and just general living expenses?…you wouldn’t, would you?

I’m a big believer in young people getting income protection cover whilst they’re young, fit and healthy and subsequently able to get the cover in place without any restrictions or loadings etc. and then have this cover as an integral insurance cover throughout their lives for complete financial protection.

The other aspect to consider here is that the premium payments for income protection cover are usually tax deductible, whether you’re self-employed or an employee.

This will of course result is the real net cost of the cover being cheaper!

On the other hand, the premiums we all pay for insurance on our family cars, household contents and other motorised toys such as bikes, boats and Jet Ski’s are most certainly not tax deductible.

So, what’s it going to be, the goose or the gold egg?

* The author of this article, Gary Fabian, is the Principal of Precision Advisory; Licenced finance broker, risk insurance and superannuation adviser and he has comprehensive gold coast income protection cover.