Income protection insurance, or disability insurance, will provide an income if you are sick or disabled to the extent that you are unfit to work and cannot generate an income yourself.

There are different types of income protection policies:

  • Agreed value covers you for a set amount established at the outset of the policy (55% and 75% options available).
  • Indemnity and Loss of Earnings policies cover a set percentage of your income (usually 75%).

Some policies offer regular income for a specified maximum period - say, two or five years. Others offer you a regular income from the time you become unfit to work until you reach age 60 or 65, or 70 or even death should you continue to be unfit to work.