Income Protection Insurance

The Basics of Income Protection Insurance

Income protection insurance is available to Australians who want to ensure the financial safety of their families when there is a situation due to which they have to take sick leave or unpaid leave. This type of insurance cover offers a maximum compensation of 75% of the Australian policy holder’s annual pre-tax income provided he meets the eligibility criteria. To enjoy the benefits offered by these covers, the policy holder is required to file a claim and wait for the claim to be accepted. Claims are paid out when the policy holder cannot work due to health problems such as but not limited to sickness and injury.

 The Basic Benefits Offered by Income Insurance

Income covers protect you and your family by offering a monthly compensation payment after you file a claim. Once the claim is accepted, you will be provided with the monthly compensation payment until, either you are well again or the benefit period of the policy is over. Peace of mind is another benefit that can be enjoyed by policy holders since this cover offers guaranteed compensation payments provided all the documentation is in order and the eligibility criteria has been met.

 Comprehensive and Premium Benefits of Protecting Your Income

Comprehensive or premium benefits refer to those benefits that are given to you by the insurer when you purchase a good policy. You can expect 3 or more premium benefits with good policies and these benefits may include a death benefit, transplant surgery benefit, cosmetic surgery benefit, day one claim benefit and rehabilitation expenses. Accommodation benefits may also be offered to buyers who opt for good plans. Insurers may also give you an option to pay for a death benefit or day one claim benefit separately.

 The Right Kind Of Cover for You and Your Family

There are two misconceptions about income protection plans; the first is cheap plans are the best and the second is the expensive plans are the best. In reality; the ideal cover for you is what you require depending on your personal circumstances and financial situation. Before choosing a cover or between indemnity and agreed value contracts; you should know that agreed value contracts are more expensive than indemnity contracts for 1 reason that is they ensure a fixed compensation payment to the buyer.

This benefit is a must for self-employed individuals who earn a varying amount of income every year; however indemnity contracts are adequate for employees who earn a steady amount of income every year. It is important to note that while flexible plans allow you to choose the benefits you need while leaving out the benefits that are not necessary for you. Choosing the right amount to insure yourself for s very crucial and while deciding how much of your income to insure, you should note that your financial commitments such as debts, mortgages or loans along with regular bills, inflation and other expenses must be taken into account. If you have dependants then it is always better to choose a higher cover level. If you have a lifestyle that you would like to maintain then you should choose a higher cover level.

 What You Must Know Before

  • Before you get the first compensation payment from your insurer, you will be asked to wait for a set number of days. This waiting period is a must for all buyers and the number of days you wait will depend on the terms of the plan. If you choose a policy that is flexible then you may be given the option of deciding if you want to wait for 2 weeks, 2 months, 6 months or 2 years.
    Cheaper plans may not allow you to choose the waiting period. Choosing a longer waiting period has its benefits however; choosing a longer waiting period also implies that you will have to manage your expenses on your own until the compensation payment is given. A longer waiting period generally implies a cheaper policy.
  • Before you purchase a policy you may be asked, how many years you want to enjoy the benefits for. You may also be asked, how many years you want the policy for. The benefit period is the number of years that you will be able to enjoy basic and other benefits; whereas the term of the policy is the number of years you are eligible to file a claim.
    Choosing a longer benefit period along with a longer term may cost you a few extra dollars but is always worth the premiums since you will be protected for a longer time and you will not have to worry about fending for yourself without any source of income if you are injured or ill.
  • Income protection covers are offered by many insurers online which means that buyers have a choice and they can decide which insurer is best suited for them. While many buyers believe that insurance plans should be purchased directly from insurers; they should note that in the case of persona insurance plans such as income covers; purchasing plans online has a unique set of benefits.For instance; buyers can compare multiple plans online, choose which insurers they want a quite from, get multiple quotes from insurance agents and get discounts if applicable. Income insurance agents offer these benefits on their website along many more.
    Insurance comparison websites also offer customer service options for buyers who want to purchase one or more policies. Free advice may be offered to those buyers who are looking for a policy and need guidance. Standalone income protection covers can be purchased online. In addition, packages that consist of income insurance along with either total permanent disability or tpd insurance or trauma insurance can also be purchased online. Depending on the site you opt for, you may be able to also purchase life insurance plans along with income covers or other personal insurance plans.

 

 


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