07 Jan Calculate Your Income Protection Sum Insured Correctly
Tips and Traps
As you weigh up the pros and cons of finding and buying an income protection insurance policy, it is a must to carefully consider the costs of premiums and the total insurance you could derive. In this regard, most of the life insurers we have today, especially those online, are providing instant and accessible calculators to help any potential policy buyer to look at the financial benefits of buying and owning a life insurance.
In general, income protection insurance products aim to protect maximum allowed amount of policy holder’s current income. The protection usually covers up to 75% of the individual’s personal exertion income regular income. Such goals are set on commonly provided reasons that customers seek for coverage. If you want to find out how much coverage you could attain, you may start using any of the income protection insurers’ calculator.
To calculate for your possible income protection sum, determine what your income was either from your:
- Group certificate
- Australian Tax office tax assessment notice
- Profit and Loss
- Employment contract
- Or estimate what your earnings will be.
See here for a more complete definition of income protection.
Using the provided online calculators at websites of income protection insurance brokers would be more convenient. You could determine income protection sum just by appropriately filling in fields and setting other required factors. You usually would be asked to provide your current gross income per week, month, or year and you are all set. However, be reminded that such online calculators only function as illustrative tools that do not necessarily take into account any individual’s other needs, circumstances, and objectives.