May 15, 2017  | Tags: workers compensation, income protection insurance, Insurance

"Why would I need income protection when I have access to workers compensation?”

If you've asked that question before then you're not alone. Many people believe that workers compensation is their safety net, should they unfortunately be injured and forced to miss work.

But before you jump to conclusions, take a moment to consider a few of the basic differences between income protection insurance and workers compensation.

What is Workers Compensation?

Throughout Australia, employers must take out insurance to protect their employees in the event that they suffer work-related injury or illness. This is called workers' compensation. Any business that employs people (be it full-time, part-time or on a casual basis) must have workers compensation insurance to cover all workers. Depending on the state and the applicable scheme, benefits can include weekly payments, medical expense coverage, rehabilitation costs, and lump sum payment for permanent impairment.

What Is Income Protection Insurance?

Income protection insurance covers you for up to 75% of your salary in the event that you are not able to work in your own occupation due to injury or illness. You are generally protected under an income protection policy 24 hours a day, seven days a week, anywhere in the world. The premiums are usually tax deductible.

Did You Know ...  

• 75% of injuries in Australia happen outside of work¹ and of those that do suffer an injury at work, 36% don’t receive any financial assistance.²
• Over 2.6 million Australians under age 65 are living with a physical disability many of which include conditions like cancer, stroke and depression which are not covered by workers compensation.

If you are self-employed, you are not likely to be covered by workers compensation. There are also frequent changes to legislation which affects workers compensation, and entitlements continue to be reduced. If you are relying on the workers compensation scheme for cover against becoming injured or disabled, you may be compromising the financial wellbeing of your family.

Would You Like To Know More?

Your ability to earn income is your greatest asset - don't risk it. At Calder Wealth Management, our advisers will work with you to find the right insurance for you and your family. 

Contact us or call 08 8373 3333 to arrange a free, no obligation appointment. 

Written by Marisa Maiolo, Life Insurance Specialist at Calder Wealth Management.

1  AIHW (2008) Australia’s health 2008, Cat. no. AUS 99, Canberra

2 Australian Bureau of Statistics, Work-Related injuries 2009 – 2010