Interest rates are constantly fluctuating and influencing a range of real-time markets such as insurance. In fact, interest rates subtly impact the insurance industry, and are also a significant factor that determines profitability.

Insurance is linked with interest rates – even a single percentage fluctuation can have an impact on an insurance company.

Among all of the other insurances – income protection insurance is affected the most. This is because – income protection insurance pays up to 85% of the tax-free income every month if the insurer is unable to work due to illness or injury.

The interest rates have been lowered in Australia; businesses are less busy and their capacity to do business is reduced. As they don’t have as much business activity, they don’t seek business loans. With a drop in demand for business loans – interest rates have been lowered by banks.

Alongside this, many questions among insurers have been raised. Will the cost of insurance also be reduced? Is the most burning question.

Most people assume that the cost of insurance premiums must also be lowered. However, this is not exactly true.

Insurance companies make profit from the premiums they receive from policyholders. However, it is not their profit – insurance companies have to pay out the received premiums to the insurers, at the time of a policy claim.

Low-interest rates then further hamper an insurance company’s profit, and by reducing the cost of the income protection insurance, they would make a loss. Which is why the cost of income protection insurance cannot be decreased as the interest rates decrease.

Most companies are also trying hard not to increase the cost of their policies during this period, and Aspect Underwriting is one of those insurance companies.

Aspect Underwriting pride themselves in offering the best, customised income protection policies, with affordable premiums.

Aspect Underwriting also pays a higher percentage when it comes to their income protection claims. Most Australian insurance providers pay 75% of your income, while Aspect pays 85%.

How Can Buyers Make Most Of This Opportunity?

As bank interest rates go down in Australia, waiting for interest rates to return to a higher level isn’t a financially sound decision.

You and your family will be better off if instead you are purchasing an income protection policy. This will protect you and your family if the worst is to happen and you cannot work, therefore not provide to your family financially.

It is an excellent way to secure your most important asset, your income. Apart from income protection insurance, boutique insurance agencies such as Aspect Underwriting can also cover a range of your accident and health cover. They also provide trauma cover and total and permanent disability cover.

So, if you haven’t bought an income protection policy yet, then there is no time like the present, in fact the sooner the better. To go forward, get in touch with Aspect Underwriting to chat, or directly purchase your policy from their website, using their quick and easy online systems. You can have income protection, without having to deal with any meetings, or phone calls.