Preparing financially
Preparing for income interruption
Job loss, illness or reduced hours can interrupt income at any time — an emergency buffer and understanding income protection insurance are the direct preparation.
- An accessible emergency buffer, separate from everyday spending, is the most direct preparation.
- Income protection insurance is a different product from mortgage protection insurance.
- Default cover inside superannuation varies significantly — check what it actually covers.
The realistic risks
Job loss, illness, injury or a business downturn can interrupt income at any time — not something to plan around only after it happens. An emergency buffer (commonly discussed as several months of essential expenses, though the right amount depends on your job security, industry and household) held somewhere accessible, separate from your everyday spending, is the most direct preparation.
Income protection insurance
Income protection insurance can replace part of your income if you can't work due to illness or injury — a different product from mortgage protection insurance (which specifically covers loan repayments) and from the default insurance sometimes bundled into superannuation, which is worth checking separately since cover and cost vary significantly.
Practical checklist
Building resilience against income interruption
- Build an emergency buffer sized to your specific job security and household
- Check what income protection cover, if any, exists inside your superannuation
- Compare mortgage protection insurance against a self-funded buffer for your situation
Questions for a professional
- What would my income protection actually pay, and after what waiting period?
- Given my income and mortgage, what buffer would you consider adequate?