cash saveThere are always ways to be money wise, and being smart about what you pay for with your insurance is one of them. Here are some tips to help you save on your Income Protection insurance.

  1. When comparing prices, check rates for wait periods. When you are unable to work, there is a wait period before your income benefits begin. If you can wait a bit before receiving benefits, you will save considerably on the cost of your premium. The length of time you can afford to wait will depend on whether you qualify for benefits from your employer or have sufficient savings to cover a length of time with no income coming in.
  1. Compare the premiums of the various benefit period options available. The cost of having your insurance pay out for a period of 2 years versus till you turn 65 will vary significantly. Some insurers base calculations on a length of time, while others base it on age. In either case, you can save money by choosing a shorter period.
  1. Look to see if the income protection provider offers age-related, guaranteed, or reviewable types of policies. Review the pricing on the different types of policies and select the one that best meets your particular situation.
  1. If your premium is high because of your medical history, consider reducing the amount of coverage to meet your budget. Having income protection that provides a smaller payout is better than none at all.
  1. You don’t have to insure yourself for the full value of your earnings. If you earn $50,000 you can still insure yourself for less, say around $30,000, as you may have some savings that you can draw upon. Again having a smaller payout is better than none at all.

HOT TIP: Make sure you look at splitting you Income Protection cover with Mortgage Repayment Insurance as this can allow you to claim on ACC and collect a second benifit! Read here for more details.

 

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