Inspirational Case Studies
Income Protection Insurance
Geoff and Janine are married with three children. They own their own home with a mortgage of $230,000. Geoff earns $70,000 p.a. as a builder and Janine works as a sales assistant earning $35,000 p.a.
Their children go to private schools and all of Janine's income is allocated to covering school expenses.
Unfortunately Geoff had a major vehicle accident on the way home from a Saturday golf game and he is likely to need three months off work to fully recover. There is a possibility he may also permanently loose the use of his right arm, which will affect his ability to continue working as a builder. He has two weeks sick leave entitlement through his employer and limited cash reserves to pay medical and living expenses.
Some options and issues to consider:
• Salary continuance through superannuation would have covered 75% of Geoff's salary for up to two years, allowing the children to continue on at private schools.
• An Income protection policy (the premium is tax deductible) could have covered Geoff for up to 75% of his own occupation for periods up to age 65, ensuring a reasonable quality of life if he is unable to carry on working as a builder.
• Without this cover, not only is the quality of their children's education put at risk, but also their lifestyle right through until retirement and beyond.
• The family's current lifestyle could be insured for an after tax cost roughly the equivalent of their house insurance policy.
