Life Shield - Your Life, Your Protection, Personal Insurance

Income Protection for Lawyers

You have a specialist occupation and your Income Protection needs to reflect this.

After so many years of study and hard work to get where you are as a Lawyer, one of the most important assets that you have is your income – and it is worth taking the time (and speaking to someone who understands the marketplace) to ensure that you have the best possible cover and at the best price.

Income Protection provides you with an ongoing income stream in the event of not being able to work due to illness or injury. There are many possible variations within the policy and it makes sense to choose the options that are relevant to your occupation and lifestyle. We have covered some of the variations for Lawyers below:

How much can you insure?
Usually you can insure up to 75% of your current income which can be increased as your income increases. There are however Income Protection policies in the Australian marketplace that allow Lawyers to insure up to 100% of their income, at least for a period during the benefit period.
The amount that you are able to insure is capped by some insurance companies at $20,000 per month, though there are insurance companies that will allow up to $60,000 per month benefit for Lawyers.

Contract type – Indemnity or Agreed?
Are you self employed or working as a sole trader? If yes, your income changes from year to year. An agreed contract ensures your whole benefit will be payable in the event of a claim even if you have earned less over the preceding 12 months to claim. An indemnity option means that at the time of claim you will need to provide recent financials to support your benefit amount which may eventually result in a lower benefit payable.

If however you believe that your income will only increase or at worst remain constant into the future, an indemnity contract may be worth considering as you will save approximately 2% on your Income Protection premiums.

Stepped or Level Premiums?
Stepped premiums are great in the short term, however will cost you much more in the longer term as your premium will increase each year due to your increasing age. If you are expecting to keep your policy in place up to retirement, reviewing the level premium option (which does not increase in cost up to age 65) could save you half of your premiums over your lifetime. This will ensure that your Income Protection premiums remain cost effective and affordable.

Waiting Period / Benefit Period
Choosing the right waiting and benefit period on your policy is paramount. This can be the difference between receiving benefit or not and it makes a large difference to the cost of your policy.

For example, if you can afford (through savings or other liquid funds) to be able to manage for the first 3 months of not being able to work and therefore have a policy with a waiting period of 90 days, this will reduce the cost by approximately one-third. If you already have some Income Protection within your superannuation fund that you are happy with (Plum Super for example) with a benefit period of 2 years, an additional policy may be purchased with a waiting period of 2 years in order to further reduce costs. This will ensure that you will be protected for more serious illnesses and accidents that keep you away from work for longer periods of time or even for the rest of your life.

Life Shield is a specialist Personal Insurance brokerage business. We understand the marketplace for Lawyers and we have the experience and knowledge to provide an efficient and professional service.

Either call us directly or use our online enquiry form to make an enquiry and we look forward to discussing your Income Protection and other Personal Insurance needs shortly.

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CORRECTIONS REQUIRED:

After having had my income protection, with a company based abroad, for the last 15yrs I recently decided to sort it here in Australia.(Now based here so it makes sense.)
Needless to say the thought of trying to get a similar product for a good price was a concern....

Dr S.T (BDSc)
Dentist
Newman, WA.


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