What does Income Protection and Key Person insurance have in common?
The objective of both cover’s is to provide you, the business owner, with a financial safety net in the event you suffer injury or ill-health. So how are they different? Income Protection cover pays a monthly benefit to you until you can return to work. This benefit is typically up to 75% of your normal income. A waiting period applies, often 30 days, in which you must support yourself, and then if you remain unable to work, your benefit payments commence. In most cases they pay for a period of months until you return to work and things return to normal. Most of the quality products will cover you through to age 65 if required, so if you suffer a long term illness or injury, your Income Protection cover will provide you with an on-going wage which rises in line with inflation. Income Protection premiums are tax deductable, and as a consequence any benefit paid is taxable. Key Person insurance differs in that it pays an agreed lump sum. Whereas the payout conditions for Income Protectio
