Salary continuance insurance can be a good idea for anyone who relies on the income from their occupation to meet day-to-day expenses. It provides a financial safety net in case you’re unable to work due to illness or injury.
What to consider
Salary Continuance protects your income if you're unable to work due to temporary illness or injury - providing you with monthly payments to meet living expenses while you focus on recovery.
Three things to consider when choosing the right level of salary continuance insurance are:
- Do you need insurance;
- The most suitable Waiting Period;
- An appropriate level of cover;
- The most suitable Benefit Period; and
- What can you afford?
Do you need Salary continuance insurance?
Income protection insurance can be important if you:
- are self-employed or a small business owner, as you may not have sick or annual leave
- Ig you, your family members or dependents rely on the income you earn; and
- your debts, such as a mortgage, you'll need to make payments on even if you're unable to work
It's also important to consider
- if you have other insurance that can help replace lost income
- if you have private health insurance that could help pay for any medical expenses
- what help or support from family or friends may be available; and
- The cost and type of cover available to you.
Our insurance needs calculator can help you determine whether you need cover, and what levels might suit you.
What waiting period should I choose?
A waiting period is the time you must wait from when you become unable to work due to illness or injury to the time you become eligible to start receiving Salary Continuance benefit payments. legalsuper offers members a choice of three waiting periods: 30, 60 or 90 days. Generally, the shorter the waiting period, the higher your insurance premium will be. During the waiting period, you must rely on your sick leave and personal savings. If your claim is successful, your monthly benefit starts at the end of your waiting period and is paid in arrears. It's important to note that you do not get back payment for the waiting period, and the claims process may not be finalised by the end of your waiting period.
To consider the most appropriate waiting period, calculate the number of months you’ll be able to sustain your lifestyle and support your family when unable to work and not receiving your regular income, taking into account any accrued sick or annual leave.
Would you need 75% of your income covered, or could you comfortably survive with a smaller benefit?
With legalsuper, you can apply for cover of up to 85% of your monthly salary. In the event of a successful claim, after the expiry of your chosen Waiting Period, 75% of your monthly Pre-Disability Salary is paid directly to you by the insurer and 10% of your monthly Pre-Disability Salary is paid by the insurer into your superannuation account with us.
Whether you require the full 75% of your income to be covered will depend on your total monthly expenses. What percentage of your income do your expenses equate to? Would your health insurance cover all additional medical expenses?
What benefit period should I choose?
The Benefit Period is the maximum length of time that you may continue to receive a monthly benefit payment while unable to work due to illness or injury. Members can choose between the following:
- Monthly benefit payable for two years;
- Monthly benefits payable to age 60; or
- Monthly benefits payable to age 65.
Benefit payments will not be made beyond age 65. The longer the Benefit Period, the higher the insurance premiums. In choosing the most appropriate benefit period some aspects to consider are your other insurances, debts, dependants and the additional cost of cover.
What will it cost?
Your premium is dependent on your age, cover level and gender. It's important to make sure you know how much your insurance costs. The premiums are deducted from your super account, and will reduce your retirement balance. If you do not have sufficient funds to pay for insurance, it may be cancelled.
For details of the insurance legalsuper offers, please refer to the relevant Product Disclosure Statement:Additional Information, Employer Sponsored & Personal Super - Product Disclosure Statement (647.91 KB)