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Income Protection for Small Business Owners

Most people believe that income protection insurance policies are only applicable to employees who work for an organization, however the truth is that small business owners can also protect their income through these insurance plans. Income protection covers for business people allow business owners to live without worrying when they cannot work due to health conditions such as sickness or disability.

Health insurance policies protect policy holders when they fall ill or get injured and need money to cover medical bills, whereas income insurance policies protect policy holders when they need money to pay for mortgages, loans and pay for house expenses. Small business owners can insure up to 75% of their income and can also avail of additional benefits such as a death benefit. Other benefits that may be offered for no additional fee include certain types of surgery benefits.

Since there are many insurance companies in Australia, small business owners can be rest assured that they will find a company that will cater to their needs however, before buying an insurance policy, buyers are encouraged to get multiple quotes from at least 3 insurance companies. This allows buyers to get maximum benefits while paying a low premium.

Since income protection plans can be customized to suit individual requirements, buyers have the option to not only select the waiting period but also select the type of plan they want to invest in. The waiting period is a mandatory period that ranges from 14 days – 2 years and the before purchasing an insurance plan, the buyer can choose how many days he wants to wait before getting the first monthly payout. There are two types of plans offered to small business owners and these plans are indemnity contracts and agreed value contracts. Buyers also have the option to select between stepped premiums and leveled premiums. In addition buyers can choose if they want a non cancellable contract or they want a contract that can be canceled by the insurance company at the time of renewal.

Small business owners should remember that some income protection insurance policies do not cover certain small businesses hence it is important for business owners to find out if the selected policy is applicable to them or not. Before buying an income cover plan, buyers are encouraged to talk to an insurance agent or talk to a financial advisor especially if they cannot decide which plan is best for them.


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