Income protection insurance vs. salary continuance insurance: Know the difference

What is Income Protection Insurance?

The income protection policy pays you part of your lost income in case of accidental disability or injury. Income protection cover helps you focus on recovery instead of worrying about money.

If you’re unable to work due to disability, the insurance pays  –

  • up to 90% of your pre-tax income in the first six months.
  • up to 70% for a specified time after six months.

Every income protection policy has its definition of disability and injury. You can get an income protection policy quote by visiting the vendor’s official website.

Who needs an income protection policy?

Anyone who is the sole earner should make it a point to get an income protection policy. If you have dependents, you don’t want to risk their future by not giving them financial cover in case of a disability.

Anyone can avail of income protection online, with little hassle.

What is Salary Continuance Insurance?

An income protection policy becomes salary continuance insurance when it is held in a super fund. You pay the insurance premiums from the superannuation fund.

Whenever a claim is filed, the benefits will be transferred to the super fund instead of your account. In unfortunate events, income protection and salary continuation insurance provide you with a steady income.

Is income protection insurance the same as salary continuance insurance?

Typically, insurers require that you be, ultimately, partially, or permanently disabled to receive benefits. Income protection policy and salary continuance insurance may seem the same. Some differences need to be understood.

Income protection insurance Vs Salary continuance insurance:
What are the differences?

You can find online income protection quotes on the insurer’s website and compare the insurance. To save you from the hassle, the following are some common differences.

Insurance Protection. Salary continuance.
Tax benefits. The premiums you pay towards income protection are 100% tax-deductible if you pay them directly from your bank account. You cannot get tax benefits.
Policy benefits. You will continue to enjoy the policy benefits as long as you pay your premiums on time. You get policy benefits provided you are making timely premium payments. If you’re part of a group plan, you may lose the benefits upon changing your job.
Benefit period You can choose to receive the payout for 2–5 years or even up to 65 years of age. The standard benefit period is 2 years. You can opt for 5 years as well.
Customization You can customize your policy with the extra riders of your choice, which may help you mitigate risk. Customizing the policy is complex, as it is usually taken through a group.
Premium. Being an individual policy, the premiums are expensive. However, you get tax benefits on the premiums paid. The premiums are cheaper compared to insurance protection.
Availability through Direct insurer. Superannuation fund.

Summing it up.

When deciding about your finances, you want to be sure you’re making the right choice. When it comes to choosing between salary continuance insurance and income protection insurance, there are a lot of factors to consider, including what’s suitable for your specific situation.

That’s why it’s essential to talk to an insurance consultant who can guide you as per your needs and unique situation.

Take a step towards income protection with our bespoke services. Get an online income quote today free of cost here.

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