The biggest risk to business owners and how YOU can avoid it.

The biggest risk to business owners and how YOU can avoid it.

Did you know 60% of Australian families with dependants will run out of money within 12 months if the main income earner cannot work?

This is a startling fact and serves as a wakeup call that life can often throw a few curve balls.

No one expects accident or illness – but what if something did happen? How would you and your family cope financially?

Many business owners don’t hesitate to insure physical assets such as motor vehicles, plant and equipment, but what about their greatest asset of all – their ability to earn an income?

Does this sound all too familiar?

If so, you need to consider Income Protection insurance.

4 ways Income Protection insurance will benefit you

  1. Receive up to 75% of your pre-tax income if you are unable to work due to illness or injury;
  2. Meet your family living expenses while you recover;
  3. Avoid having to use  business resources to fund your income; and
  4. Reduce the amount of tax you pay.

If you don’t have Income Protection insurance, how would you get by without your income?

Think about this.

How would you meet your household expenses, mortgage repayments and lifestyle expenses if your income stopped yesterday? How long would it take before you ran into financial difficulty? If your income was to stop, your savings could be exhausted very quickly.

Taking out Income Protection insurance can reduce your risk of financial difficulty if your income stops. By protecting up to 75% of your income before tax, you can continue to meet household expenses and mortgage repayments if you can’t work for an extended period.

Your business can also benefit!

Income Protection Insurance can also protect your business during a period of illness or injury. Because your business resources do not have to be used to provide income while you’re not working, the financial well-being of the business is maintained in your absence.

What is your income really worth?

If you had an asset worth $3,806,033 would you want to protect it?

As shown in the table below, this is how much you could earn between now and age 65 if you are currently 35 and earn $80,000 pa.

Your earnings between now and age 65

Income now (pa) Age now
25 35 45 55
$30,000 $2,262,038 $1,427,262 $801,111 $343,916
$50,000 $3,770,063 $2,378,771 $1,343,519 $573,194
$80,000 $6,032,101 $3,806,033 $2,149,630 $917,110
$100,000 $7,540,126 $4,757,542 $2,687,037 $1,146,388
$150,000 $11,310,189 $7,136,312 $4,030,556 $1,719,582
Assumptions: Income increases by 3% pa, no breaks in employment, taxation ignored.

Don’t put off protecting your income any longer
– contact Financial Planning Expert on 1300 721 174 or at to arrange an obligation free consultation with an insurance specialist today.

How Income Protection can protect your family and business

Donna owns XYZ Tupperware Pty Ltd and earns $80,000 pa. Her husband stays at home to look after their 2 young children. Donna’s home is worth $600,000 and she has a mortgage of $400,000. Donna wants to be able to meet her family’s living expenses and mortgage repayments if she becomes sick or injured and can’t work.

Unfortunately for Donna, the unthinkable happens and she is involved in a skiing accident and is unable to work for nine months. Fortunately, Donna spoke to Financial Planning Expert and arranged Income Protection insurance before the accident happened.

Donna was able to claim on her policy and receive a monthly benefit of $5,000 (75% of her usual income). Donna’s payments started after her initial 30 day waiting period, during which time her savings were able to meet household living expenses and mortgage repayments. After nine months, Donna had received a total of $40,000 in payments from her Income Protection policy. This allowed her to continue meeting her family’s living expenses and mortgage repayments while she was away from work.

Had Donna not taken out Income Protection insurance before the accident, she may have run into financial difficulty. Without payments from her insurance policy, Donna may have struggled to meet her household expenses, mortgage repayments and medical expenses from savings or other financial resources (e.g. relying on business resources).

How you can take out Income Protection insurance

Contact an insurance specialist at Financial Planning Expert for further information. We can determine whether you need Income Protection insurance and advise you of the most cost-effective package. We can also ensure your insurance is structured tax-effectively and can calculate how much tax you could save.

To speak with Financial Planning Expert about Income Protection insurance or other financial planning matters – contact us on (03) 9708 8126 or at

This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial and tax advice prior to acting on this information.Opinions constitute our judgement at the time of issue and are subject to change. Financial Planning Expert Pty Ltd does not give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document.
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    Financial Planning Expert is an independent financial planning business based in Melbourne. We provide genuinely independent and conflict free financial advice. We’re experts in self-managed superannuation fund (SMSFs) advice and strategy, retirement planning, property and share investment advice, life and income protection insurance, tax planning, asset protection, estate planning and advice for Australian expatriates.