How to protect yourself from becoming financially vulnerable?

Last updated on July 28th, 2021 at 05:07 pm by Bill Tsouvalas

Being in control of your finances is a constant battle for many Australian households. With 1 in 3 Australians being reported as being financially vulnerable, it is important to find a way to protect your number one asset, your income. An income protection policy can create a buffer for when you are unable to receive an income. Here are five ways in which an income protection policy can be beneficial for you.

Pay off your bills when you are not working

Not being able to go to work is due to circumstances that are out of your control can keep anyone up the night, especially when you have bills to pay. According to a study by Deloitte, 6 million Australians are at risk of not being able to pay off their household bills or put aside savings to help them when they need it the most. Having an income protection policy can help you take care of everyday expenses and debt that could affect your credit score.

Take care of your rehabilitation bills

Sustaining a critical injury or falling critically ill can be costly when it comes to paying off medical bills or going to a rehabilitation centre. This can have a huge impact on your loved ones who want to be there for you physically and financially. Having a policy in place can alleviate the stress of finding ways to help you recover. This can also be beneficial for people who have a spouse and want to hire someone to help them around the home.

A continued source of income

Having your salary cut off can be devastating, especially when you don’t have a backup plan. Being able to stay in control of your finances can get stressful when you have many responsibilities to take care of. Being able to have a continued stream of income is essentially when it comes to keeping any household afloat. Stressing over your finances can be the last thing that you need when you are on the road to recovery, which is why it can be beneficial to have a policy in place.

Get cover when you lose your job

Some circumstances are beyond your control and you could find yourself out of a job. According to the Australian Bureau of Statistics, unemployment increased from 4,600 to 672,100. Furthermore, research by Deloitte revealed that 29% of Australians were now less confident in their ability to retire comfortably by the time they reach 65 or even raise a $1,000 in a week. There are some insurers that offer policies that cover people who have become redundant, but it is vital to ask your insurer if they will be able to cover you for this before taking out a policy with them.

Protecting you and your loved one from becoming financially unstable by having an income protection plan can be one of the best things that you can do to protect your future financially.