Unlimited Sick Leave ….. Wouldn’t That Be Nice!

 

Imagine this, you have just commenced a new job & the HR manager is going through some of the benefits that you’re entitled to as an employee.

They mention that they have an unlimited sick leave policy.  This means that you will be paid for any illness or injury that prevents you from doing your job for the full duration of your disability!

To my knowledge this kind of arrangement doesn’t exist, unless there are special circumstances or privileges involved.

Ordinarily, employees need to accrue sick leave entitlements based on the number of years of service offered.

It has been found that the average number of sick days an employee has in Australia is approximately 15-20.  This number would be higher if it weren’t for our love of ‘sickies’ in this country however it is what it is.

So if you were to sprain your ankle or pick up a common cold or flu, you would have adequate sick leave entitlements to cover you.

What would happen financially though if your illness or injury were to last months or even years!

It is these events that catch us off guard which can lead to serious financial stress.  After using up your sick leave, annual leave & any other entitlements, you are basically on your own!

The good news is that you don’t have to wait or rely on your employer to come up with additional entitlements including a notion of unlimited sick leave.

You already have access to such entitlements & more in the form of personal insurance!

Wouldn’t you want the added advantage of knowing that you can take care of yourself financially if your employer couldn’t.

By now you should all be reasonably familiar with the choice of products offered by the life insurers in the market.  I have written numerous blogs highlighting the different options available in relation to financial protection.

Even though there are differences in relation to the products themselves they all share the same purpose.  The purpose being money going to the right person at the right time, at their time of need!

Part of my job as an adviser is to offer assistance & provide strategies or recommendations in relation to your personal circumstances.

This may involve the use of one or more life insurance products in order to provide adequate financial protection.

Income protection insurance would be the obvious choice or replacement for sick leave entitlements at work.

By selecting a benefit period to age 65 you would be entitled to payments for any illness or injury that prevented you from doing your job, being temporary or permanent.

When you multiply your annual salary by the number of years that you may be unable to work, particularly for any long term or permanent disability, you are looking at a loss of earning capacity in the millions of dollars!

TPD insurance could also be considered although benefits are only payable on a permanent illness or injury preventing you from doing your job.

This cover still has an important role to play however should not be relied on without income protection cover in place as well.

A lump sum benefit would be calculated based on your income, debts & living expenses factoring in both inflation & a relevant interest rate.

This lump sum benefit would then be re-invested with an annual income being drawn up until a certain age, usually 65.

Trauma insurance can also be considered although more so to supplement any income protection benefits if applicable.  This is because trauma benefits are usually paid for serious events such as cancer & heart disease.

Trauma benefits are not paid on less serious events that may affect your ability to do your job ie, a lower back injury.

In an ideal world you would take out a level of cover equivalent to at least one years salary along with your income protection cover.

This will provide you with a regular monthly benefit with the possibility of also qualifying for a lump sum benefit from your trauma cover providing additional financial support.

 

Take some initiative & do what you can to ensure that you are still protected financially as your employer may not be there in your time of need!

 

 

Tom George
My role as a Life Risk Adviser involves educating, assisting and providing advice in the area of personal insurance. Follow me on Twitter | Linked In Profile

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