How much Income Protection do I need?

Are you asking yourself “how much income protection do I need?” With NobleOak’s Income Protection Insurance, you can apply to insure up to 70% of your income. The minimum monthly benefit is $1,500 and the maximum monthly benefit is $30,000.

A baseline some people use is to have enough cover to manage living costs if they were unable to work. Do you have debts such as a mortgage or a car loan? Do you have dependents? Can you supplement with savings and manage on 50% or 60% of your income, or should you opt for the 70% maximum cover? These are the types of questions you should consider when deciding on the right level of cover for you.

For example, Roger is a 32-year-old nurse with an annual salary of $80,000 and has just bought his first home. Now that he is responsible for a mortgage, he decides it’s time to protect himself in case of serious illness or injury. His current income enables him to take out Income Protection Insurance to a maximum benefit value of $4,667 per month.

Roger has no dependents and no other debt besides his mortgage. He calculates that he could manage his mortgage and living expenses on less than 70% of his salary, particularly if he was sick or injured, as he would also be saving money on his usual sporting and social activities. He could also rent out the second bedroom in his house if necessary. Roger decides to take out cover for a benefit of $4,000 month with a 90-day Waiting Period, knowing that if his circumstances change in the future and he gets a pay-rise or acquires more financial responsibilities/dependents, he will be able to apply to increase his cover to suit his needs.