Income protection insurance is crucial as it provides financial support if you are unable to work due to illness or injury. It gives you the ability to maintain your standard of living while recovering. Income protection should be your top priority because it acts as your financial safety net. This type of insurance means that you have financial stability while recovering and allows you to pay for essential expenses such as mortgage payments, utility bills, and daily living costs.

While people often insure their car worth $20,000, it’s important to recognise that a $50,000 annual salary amounts to $2,250,000 over a 45-year working life. An individual’s ability to earn an income is their greatest asset and the most important risk to cover.

There are options to reduce the cost of income protection.

• Having a wait period of 90 days instead of 30 days could save you up to 40% on your premiums.
• Insure yourself until age 65 for the long term because you never know what your future sickness or injury may be.
• Ideally, you need to build up your rainy-day savings to self-fund the first 90 days, which can make premiums affordable.

Income protection insurance is a valuable tool that provides financial security, peace of mind, and comprehensive cover in the event of illness or injury. It ensures that you can maintain your standard of living and focus on recovery without the added stress of financial concerns.

This information is of a general nature and is not intended as personalised financial advice. RIVAL Wealth is a Financial Advice Provider (FAP) licenced by the Financial Markets Authority to provide financial advice. Our disclosure document is located at rivalwealth.co.nz or a written copy is available on request