Income Protection

Also known as Income Replacement, Disability Income or Salary Continuance.

Definition
Income protection insurance that will pay a regular income to a person if they are disabled by a sickness or accident. The maximum benefit covered is usually 75% of gross income after business expenses.

Purpose

• To continue an income stream in order to repay debts and maintain current lifestyle
• To provide the ongoing ability to maintain other protection, savings, investment and retirement plans

Taxation
Premium can be tax deductible if the person is normally eligible for a tax deduction for their superannuation contributions. For example, a selfemployed person. Benefits are not taxed if within a person's Pension RBL. Lump sum tax applies if benefits are paid to nondependants.