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If our ability to generate our income is affected by sickness or accident then serious consequences can soon flow from it.

A large portion of the average families income goes towards mortgage repayments and reducing (or keeping under the limit) credit card debt. Of course as investors we are also using our cash flow from our income to support our investment properties…. where required.

Sometime during their lifetime, two out of every five people will be unable to work for six months or more because of sickness or an accident. Many more will also be subject to short-term disabilities which also have the potential to seriously disrupt their income.

Income Protection insurance could be the answer for you. It can replace up to 75% of your gross income when you need it most, when you are ill or injured and unable to work. Income Protection will keep a regular income coming in while you recuperate and concentrate on getting well again.

The length of time you receive your income protection payments will depend on the contract term you choose. An income protection policy can pay you for 2 years, 5 years or to age 65.

What if you have a property portfolio worth over one million dollars…..would you be prepared to take a chance on having all your income all of the time or would it be better to pay a little of that income in return for income protection.

Do you contemplate what would happen if you were unable to meet those commitments? It’s possible that you might end up having to sell some or all of your investment properties. Perhaps the family home could also be at risk.

The statistics show that people who take the chance are taking a very big risk indeed.

We reckon that Income Protection is a very wise and sound investment. In most cases, income protection is also tax deductible – check with your tax accountant.

Property Friends is a specialist Property Investment Advocacy that has been operating for the last 13 years on the basis of 3 principles: Trust, Community & Progress. www.propertyfriends.com.au (03) 9758 5331

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Uwe Jacobs Property Strategist

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