Protecting income needs to be part of a greater strategy and workers need to find advisers who can rebate the commissions on this advice, according to CreationWealth.
The non-aligned wealth advisory group said while 83 per cent of Australians had car insurance, only 31 per cent had income protection insurance.
The firm said this was significant as income was the largest income producing asset.
CreationWealth senior financial planner, Andrew Zbik, said clients needed to find an adviser to advise on income protection insurance that would rebate the commissions so that it was not just about selling a product.
“It’s about protecting your income as part of a greater strategy,” he said.
Zbik said income protection insurance would replace up to 75 per cent of monthly income in the event that a worker was injured or ill and could not go to work.
He said his average client would be able to last three to four months before they would run out of cash if they were unable to work.
This article by Jassmyn Goh originally appeared in Money Management on the 28th June 2016. References to Andrew Zbik have been amended to mention CreationWealth.