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How does income benefit work?
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Income benefit will pay you a monthly payment if you are unable to work for an extended period of time due to an accident or illness covered by your policy. When you apply for income protection insurance you will need to nominate the amount you wish to be insured for and answer some health and lifestyle questions and you may then be provided with some quotes for insurance premiums. Policies are also available to insure your partner as well.
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Can I increase or decrease my level of cover?
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Yes, if your circumstances change and you need to increase or decrease your level of cover you can apply to do this by simply contacting the insurer. You can never increase your cover beyond 75% of your income.
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What if I am employed on a part time or casual basis can I get cover?
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Yes, as long as you work at least 20 hours a week and you have held this position for at least 12 months, you will be able to apply for cover. Your income is generally determinded on a pre-tax basis after all expenses associated with teh generation of that income have been taken into account.
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What if I am self employed can I get cover?
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Yes, as long as you have been self employed for at least 12 months and work for a minimum of 20 hours per week, you will be able to apply for cover.
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Are there any tax benefits for income cover?
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Generally there are tax benefits for income cover as your premiums should be tax deductible. However you should note that any income benefit you receive will be assessable for income tax purposes. If in doubt you should consult your tax advisor.
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When does the policy cover me from?
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Your cover will generally start as soon as your application has been accepted by the insurer that you choose to take out your policy with. Your first premium is deducted from the policy commencement date, which will be set out in the policy schedule.
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When would my benefit payments start and how long would I receive them for?
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When applying for your policy you will need to select a waiting period, this is typically either 30 days or 90 days and also a Benefit Period; 6 months, 1 year, 2 years or 5 years, depending on the insurer. If you become eligible for payments you will be paid in arrears, starting from the end of the waiting period, for either the period you are unable to work or for the period of your benefit payment.
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Can I cover my partner who works on my policy?
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You cannot include a working partner on your policy; they will need to take out their own individual policy.
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Can I ask for additional benefits for rehabilitation and homemaker assistance?
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Yes, you will need to read the policy summary details to find out what options are available, however as a guide, some insurance policies have the option of adding 'Rehabilitation Benefits' to help you recover, and 'Homemaker Insurance' to help take care of things at home while you rest and get better.
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Do I need income protection insurance if I have life insurance?
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Life insurance and income insurance cover you for two different purposes, so you will need to assess your needs but may wish to consider holding the two policies. Life insurance covers you in the event of your death (or some may also cover terminal illness) and will make a payment to your family to help them cover bills and living expenses. Income protection will cover you if you have an accident or fall ill and you are unable to work for an extended period, allowing you to recover.
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What factors affect my premium?
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What factors affect my premium?
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Your premium is determined by a number of factors including:
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Your occupation
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Your age, gender and smoking status at the time of the application;
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The Income Benefit (selected by you);
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The Benefit Period (selected by you);
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The Waiting Period (selected by you); and
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Other factors such as your health, family history and participation in hazardous activities.
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I consider my job high risk, can I still apply?
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Yes, you can still apply, however it is up to the insurer to determine if your job is too high risk to insure. You should note that if you are accepted, you may have to pay higher premiums if your job is deemed risky by the insurer you are applying to.
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Do I pay my premium if I am receiving the income benefit?
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If you are receiving your income benefit payments in most cases you do not need to pay your premium until you return to work or until the maximum benefit period has been reached.
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What happens if I smoke?
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If you smoke you can still apply for cover; however this may affect the amount you pay for your insurance premium.
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At what age can I get cover?
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Cover is generally available for people aged between 18 and 64. Your age may determine which brands are available for you to apply for, for example if you are 61 years old you will not be eligible for Real Income Protection Insurance, however you will be eligible to apply for Guardian Income Protection Insurance.
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Can I cancel my policy?
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Yes you may cancel your policy at any time.
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What if I cancel my cover do I get any money back?
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When you purchase your policy you have a cooling off period, and so long as you cancel within this time you will get a full refund of the premium that you paid. If you cancel the policy after this period has expired, you will only be eligible for a refund if you have chosen the annual payment option, and this amount will be equivalent to the unused portion of your payment.
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What can I use the money for if I receive the benefit?
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You are free to use you income benefit however you wish. Most people use the money to make sure that they cover important bills and living expenses, which could include items such as rent, mortgage, electricity, school fees and food.
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What if I receive other benefits during my claim period?
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Any other benefits received during your claim period will be taken into account when the insurer is calculating the Income Benefit that will be payable to you, see the relevant Product Disclosure Statement (PDS) for full details. The amount that your receive from the insurer following a claim may need to be declared to the
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What is the waiting period?
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The waiting period is the amount of time you need to wait before the income benefit that you have applued for starts to be payable. The period will depend on the insurer, but as a general guide you can select from either a 30 day or a 90 day waiting period.
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How do I make a claim?
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Either you or your legal representative will need to contact the customer services department of the insurer that you purchase your policy with. They will provide you with a form which will need to be completed and returned, along with any supporting documentation and you may also be required to get your treating doctor or specialist to complete an additional form at your expense.
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Do any exclusions apply?
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Yes, exclusions do apply and these will depend on which policy you wish to purchase, so you will need to ensure that you read the Product Disclosure Statement beforehand to make an informed decision. Payments will typically not be made in the event that you are unable to work due to:
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An intentional self inflicted act; or
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A Mental Disorder or Illness; or
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Attempted suicide; or
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The consumption of drugs (unless under the direction of a Medical Practitioner and not in connection with treatment for drug addiction, substance abuse or dependence); or
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The consumption of intoxicating liquor, including having a blood alcohol content over the prescribed legal limit whilst driving; or
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Normal pregnancy (including participation in IVF or similar program, normal discomforts such as morning sickness, backache, varicose veins, ankle swelling or bladder problems), giving birth, miscarrying or having a pregnancy terminated; or
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War (whether declared or not) or war-like activity, or taking part in a riot or civil commotion; or
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Engaging in any criminal activities or illegal acts.
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What if I have a pre-existing condition?
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You will need to declare this and you will be required to undergo the underwriting process which will assess whether or not you can be insured.
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Why have I been rejected?
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If you have been rejected this may be due to your occupation (some hazardous or dangerous occupations are not covered), you do not having a regular income, you not being an Australia resident, you do not fall within the age criteria for the insurance product or your answers to the health and lifestyle questions do not meet the eligibility for the insurers that we deal with.
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How much income cover do I need?
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You will need to assess the level of cover that you need, however you should consider what bills that you have coming in monthly (mortgage, loans, general living expenses etc...). The policies available will only insure a proportion of your salary, with the maximum being 75% of your pre tax salary.