Basic eligibility criteria for purchasing income protection
Income covers to protect your income can be purchased online through a number of insurers or insurance comparison websites however; for your application to be accepted and to enjoy the offered benefits you need to meet eligibility criteria set by the insurer.
While each insurer may have slightly varying eligibility criteria; most of the requirements are quite similar. For instance all insurers require the buyer to be a permanent Australian resident or an Australian citizen which means that tourists and people on a temporary work permit or temporary permit of any other kind are not eligible to purchase income insurance plans.
Depending on the type of plan you purchase, that is income covers for homemakers, income covers for doctors, income insurance for self-employed individuals, income covers for white collar and blue collar employees you may have to meet some additional criteria such as the minimum number of hours you work every week which is usually 30 hours, or the minimum salary that can be protected by salary continuance covers.
If you want to purchase a salary continuance or income cover plan from your superannuation funds, then you have to be a member of a super fund that offers this facility. You will also have to take to the super manager to find out both the application and claims criteria.
Eligibility criteria for occupations
If you purchase a needle stick cover or an income cover for medical professionals then you have to be a medical professional to enjoy the benefits offered. This means that, the cover you purchase should match your duties at work. It should be noted that if your policy states your occupation and your office tasks in the policy disclosure statement, then you will have to abide by these rules and meet the various criteria set by the insurer at the time of filing the claim.
Beware of policies that state you will get a compensation payment only if you cannot meet all the duties at work since these policies tend to limit the scenarios in which you can claim compensation payments. If you work in hazardous environments such as a mine, a gas company or any other place where your life can be in danger then you may have to pay higher premiums than other professionals who work in safe environments such as offices.
If you opt for a policy for self-employed individuals or a policy for business expenses then you may be eligible to work for up to 10 hours every week from home just to ensure that your business is taken care of while you are on leave. This will however depend on the insurer and you should check with the insurer if this option is offered.
Eligibility criteria to file income protection insurance compensation claim
To be able to get the monthly compensation claims you have to file a claim after the waiting period is over. There may be a time limit such as maximum number of days to file the claim. All documents have to be submitted while filing a claim such as proof of illness, injury or other medical documents.
Depending on the type of contract you have purchased you may have to submit income proof either at the time of purchasing the contract or at the time of filing the monthly compensation claim. Usually buyers are required to provide income proof when they purchase a contract; however buyers who purchase agreed value contracts can submit income proof when they want to get compensation benefits.
After purchasing the policy if you are diagnosed with one or more serious health conditions that can be fatal or if you are diagnosed with any genetic conditions that you know of, then you have to declare these conditions while filing a claim. Failure to disclose information will most likely lead to a rejected claim.
If you have a medical condition that you are not aware of or a genetic condition that has not been discovered by doctors as yet, then you do not have to worry about this criterion. Any change in your marital status or any life changing events have to be reported to the insurer right away.
Eligibility with pre-existing health conditions
If you have one, two or many pre-existing conditions then you may still be eligible to purchase a policy and file a claim however; there may be other rules in place for you. For instance, exclusions for diabetes may be applicable if you suffer from diabetes before purchasing a policy.
This is not a must, but exclusions keep the premiums low and allow policy holders to enjoy the benefits of the cover if they are ill or injured due to any other problem than the excluded problem.
Other eligibility criteria
Premium loading fees and exclusions may be offered to those policy holders who are at a risk of injuring themselves while participating in a particular sport or activity. For instance rugby, football, soccer and other sports players, may have to sign a contract with exclusions if they have injured one body part in the past and are at a risk for recurring injury.
Premium loading options may be offered instead of exclusions and ultimately it is the policy holder’s choice to choose if he wants to pay something similar to an excess while filing a claim or he wants to opt for exclusions.
To be eligible to get tax concessions for income protection insurance plans you should either purchase a policy under your super funds or you should purchase a stand-alone policy.
Keep in mind, that purchasing a package deal or an income protection cover with add on plans such as trauma insurance, total permanent disability insurance may make you ineligible to enjoy some of the tax concessions offered. Income covers are tax deductible and you will be eligible to enjoy tax benefits as long as you meet the criteria stated by the insurer and the law.