The length of time you receive payments depends on the contract term. For example, 2 years, 5 years, or up to the age of 60 or 65. this will vary depending upon the amount of cover you are willing to pay for.

It is recommended that you seek professional financial advice from a financial planner first before you purchase an insurance plan, as the type of cover, features and benefits will depend on your needs and circumstances. For example, a young single professional with no dependents and who does not need to consider the costs that might affect their family should he or she die, could consider getting income protection or critical illness insurance. This type of insurance policy is designed for when it is more important to meet the costs of 'living' than ensuring family members receive a payout after your death.

How much protection do I need in my insurance policy?

The amount of income protection insurance you need will be determined by the salary you want to insure. Income protection provides cover for about 75% of your salary in the event of illness or injury preventing you from working.

You need to consider the costs of meeting a mortgage and other debts, providing for a spouse, children or other dependents and maintaining your assets and investments. Remember, the point of income protection insurance is to provide an income stream if you can no longer work.

What should I pay for my insurance policy?

Shop around and compare insurers' (including your super fund) and what each insurance policy covers, features, benefits and price. Please note that premiums for the insurance policy depends on:

• Your age (premiums may increase or the insurance cover may decrease as you get older)
• Gender
• Your health and pre-existing conditions
• Whether you are a smoker/non-smoker
• Occupation (for example, a manual labourer pays different premiums to an office worker)
• The time you choose to wait before receiving payment

Before signing up for any income protection, compare product disclosure statements and consider getting professional financial advice. Below are some tips for you to think about when choosing the best income protection insurance policy for you:

• When taking out an insurance policy, ask the following questions: what is covered, what is not covered, how much will I be paid after a claim, and what will the insurance premiums cost now and later?

• Consider getting an insurance policy with index-linked premiums and cover so you know the cover will keep up with inflation.

• Consider a non-cancellable insurance policy; otherwise companies may reassess your health or other factors on each renewal, possibly raising your premiums or refusing to continue cover.

• Offset clauses allow most insurers to reduce payouts if you have other income (for example, sick pay from your employer or Centrelink benefits). Check the relevant section of the insurance policy for more details.

• With group insurance provided through super, the agreement is between the fund trustee and insurer. Make sure both know who your nominated beneficiaries are.

• Check the waiting period (how long before you receive payment, often 30 or 90 days) and the benefit period (for how long payments will be made — typically two years or sometimes until your normally expected retirement age).

• Some insurance policies pay out if you are unable to perform your normal occupation; others only pay if you cannot perform any occupation for which you are suited by education, training or experience.

Make sure you read the terms and conditions. When taking out any insurance policy, you should check the terms and conditions carefully and also the way the key terms of the policy are defined.

Speak to the financial planners at Intellichoice about the range of life insurance and income protection insurance policies they have available. They will source, compare and recommend an insurance policy that suits your needs. Your financial planner will also go through the terms and conditions. Call 1300 55 10 45 today and let an Intellichoice financial planner help you with your insurance policy.