Importance of Income Protection Policies
Income covers that offer financial protection for professionals such as solicitors, judges and barristers ensure that these professionals get maximum compensation payments when they purchase a good cover. Getting monthly compensation payments from insurers can ensure that all the bills are paid, loan repayments are made and the policy holder’s household runs smoothly even when he is on leave from work due to sickness or injury.
Peace of mind for the policy holder and his immediate family are additional benefits of opting for such plans. A range of additional perks that may be complimentary or chargeable are also offered to many professionals. The day one claim benefit and extended waiver premium benefit are two of such benefits offered by Australian insurers.
The basic eligibility criteria for purchasing income covers are; the buyer has to be a permanent resident of Australia working in the said field at the time of application and the buyer should earn a fixed or variable income that meets the criteria of the selected insurer. In order to be eligible to purchase an income protection policy for barristers, which offers a guaranteed benefit of $75,000 annually, the buyer has to have started practice within the last 2 years as a barrister.
In addition, the professional has to have been employed in the legal field or has to be employed in an unrelated occupation and has earned a minimum of $100,000 annually. Some of the professionals in the legal field who are eligible to opt for such a plan include solicitors, Barrister’s clerk, Military Legal Corps, a Judge’s Associate, in Legal Aid, in the DPP’s office.
- Since the maximum insured amount is a maximum of $10,000 or a maximum of 75% of the barrister’s pre – tax annual income; buyers can expect to get maximum compensation if they opt for good plans. The type of contract that is agreed value or indemnity contract will determine the final amount the professional is eligible to receive from the insurer.
- A longer benefit period and a contract with a longer term can ensure that the legal professional, gets to enjoy the given benefits for a maximum period of time. A shorter benefit period can increase the cost of the policy by 10%or more; however a shorter benefit period will also ensure that you get the compensation payouts as soon as possible; especially during an emergency. Alternately, the day one claim benefit can be opted for those individuals who want the choice of filing a claim even while the waiting period of the policy is active.
- Before selecting an insured amount, the professional should also consider the tax implications of purchasing an income insurance plan. The professional may also want to find out the implications of purchasing add on plans with either stand alone or superannuation plans.
Benefits of Income Protection
- Income protection policies for barristers can ensure that these professionals get regular compensation payouts from the insurer when they suffer loss of income from either illness or injury. Depending on the selected insurer, policy holders can enjoy a maximum of up to 75% of their annual pre-tax income towards monthly payouts. This amounts to a maximum of $10,000 every month towards compensation payments. Certain insurers offer a guaranteed benefit of $75,000 annually for eligible bannisters. The eligibility criteria are mentioned above.
- Some insurers offer a premium discount when buyers opt for a higher cover limit. Usually the higher the cover limit, the larger this premium discount. Barristers can choose from a variety of premium payment plan options such as levelled premiums and stepped premiums. These professionals can also choose if they want to pay the premiums fortnightly, monthly or annually. Since most income insurance premiums are tax deductible, buyers can enjoy a variety of tax concessions and benefits. Suncorp is one of the leading insurance providers who offer this guaranteed compensation plan to barristers.
- The mental illnesses cover is offered with income covers to certain professionals such as doctors and barristers. This beneficial cover protects the policy holder from facing loss of income when he is temporarily affected with a mental illness due to which he cannot work.
- Some insurers such as Suncorp offer an additional benefit that allow barristers to get up to $250,000 of trauma insurance cover without providing any medical or financial documents.
- Additional perks that may be offered by Suncorp and a few selected insurers include a 24 hour worldwide cover, total disability cover, partial disability cover, non- smokers discount, indexation benefit, transplant and cosmetic surgery benefit, unemployment benefit, claims escalation benefit and AIDS cover. Specified trauma covers, guaranteed agreed value contract and day one accident covers may be offered to eligible buyers for no extra cost. The family accommodation benefit is usually offered to help families of the policy holder and this benefit is not subject to a waiting period.
- Cheap add on covers with minimal or no paper work are offered to eligible buyers. Trauma insurance and total permanent disability insurance are two of these add on plans offered to new buyers.
What to Remember
- Buyers who want to purchase income protection insurance plans for barristers should consider comparing insurance plans before finalizing on a plan. Comparing plans online has many benefits such as the facility to use various tools to make the comparison process a lot easier. Income comparison websites offer free comparison services along with free multiple quotes and other insurance tools. Income covers for young, healthy adults who do not smoke can cost as less as $10 a month to $30 a month. While you get the only benefits that you pay for, you can get discounts, promotions and other offers from income comparison websites and insurance agents provided you meet the eligibility criteria.
- Suncorp is the leading provider of insurance plans for barristers and this company offers competitive underwriting terms. This being said, buyers are encouraged to read all the terms of the plan before deciding which insurer they want to opt for.