- The Savvy Promise
Even though 62.5% of young people have a degree, 13.3% of youth between the ages of 15 and 24 years old are unemployed; with 18% underemployed. These figures can change: an increasing number of people may lose their jobs, particularly since retrenchments are higher among younger people.
A solution is to take out income protection.
Lower premiums
Premiums for income protection for young people are much lower than for someone older, young people being lower risk. For instance, a male aged 22, with a starting salary of $2 000 monthly, will need to pay $35 a month. By contrast, a 60-year-old male earning $5500 per month will pay $415 monthly for income protection.
Tax benefits
It has been stated by ATO that income protection is tax deductible. However, the cover must be separate from that of superannuation, unless you are self-employed.
Travel benefits
Many young people enjoying travelling, with 10.9% of Australians between the ages 25 to 29 travelling abroad in 2016. There is always a possibility of mishap back home. However, a traveller with income protection can benefit by receiving an economy ticket to return home in the event of an emergency.
The benefit of having funds for rehabilitation
If, for instance, you have been in an accident, and need rehabilitation, income protection allows for access to funds to pay for the treatment. Should you not have cover, you are obliged to foot all the bills from your own pocket, or to depend on family or others. With access to rehabilitation, you can re-join the work force sooner.
Some aspects to be aware of
Certainly the premiums will increase as you age; however, you will have a favourable standing with your insurer, and therefore you can negotiate better rates in the future. However, it is better to view income protection as part of your broader lifestyle-protection solution, than something your parents would opt for. In case you need such benefits, your lifestyle can continue unaffected by loss of salary.
Did you find this page helpful?
This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.
Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.
For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.