Importance of Income Protection Policies
Unlike other professionals who work in offices, pilots spend a lot of time navigating planes hence this is considered as a risky profession. Although researches and studies indicate that travelling via air is one of the safest modes of transportation, there is no denying that there is a lot of risk travelling by air especially when you are the one who has controls of the aircraft.
While life insurance is a must for pilots due to the nature of their job; income covers are also a must for pilots due to the amount they earn, the lifestyle they lead and the nature of their jobs. Pilots need income protection insurance for two important reasons; the first is to protect their lifestyle when they cannot work due to illness or injury and the second is to live a worry free life, knowing that you are protected financially by an insurer.
To be eligible to purchase income protection plans either online or via the phone, the buyer should be a permanent resident of Australia or a citizen. To be eligible to purchase an income cover for pilots, the buyer should be employed in the mentioned field while applying for the policy.
Additionally, certain insurers may require the policy holder to work for a minimum number of hours in order to be eligible to opt for income covers. To be eligible to get compensation payments and other benefits, the policy holder must update the policy if he loses his job, gets a promotion, changes his job or is diagnosed with any medical conditions. Known genetic conditions along with any other concerns that can affect the policy’s premiums should also be reported to the insurer right away.
Pilots who opt for indemnity contracts are required to submit the proof of income when they apply for the policy.
Pilots who opt for agreed value contracts are required to submit the proof of income when it is time to file a claim. Claims can only be filed during the benefit period and after the waiting period is over.
Some insurers also offer policies that provide a guaranteed compensation payment every month. The amount offered with such policies will depend on the occupation of the buyer, the salary of the buyer and a few other factors.
The maximum insured amount that pilots can opt for with income covers is 75% of their annual pre-tax income. The type of contract selected by the professional along with his health status will determine the final compensation payout given by the buyer.
The benefit period that ranges from as les as 1 year for some insurers to as much as 5 years; will determine how much time the professional can enjoy the given benefits for.
Benefits of Income Protection
- The basic compensation benefit is given to the policy holder once a month when he files a successful claim. This benefit can not only offer financial stability to the buyer, but can also ensure that all outstanding bills are paid and mortgage repayments are made on time.
- The mental illness cover provides compensation to buyers who are affected by a mental illness such as depression or anxiety and cannot work due to this problem. The mental illness cover is a must for those professionals who either have stressful jobs or have a susceptibility to develop emotional or mental issues. People who are either the primary bread winners of their family or have dependants must also consider opting for a comprehensive cover that offers these benefits.
- The indexation benefit often known as the inflation benefit, allows the policy holder’s cover limit to increase every year according to the CPI index. This increase in cover with the consumer price index ensures that policy holders do not have to worry about inflation after they have purchased an income cover.
- The day one claim benefit ensures that pilots can file a claim before the waiting period is over and they can get compensation payments as soon as possible if they are eligible to file a claim. The death benefit is ideal for those policy holders who want added protection along with income covers. The guaranteed renewability plan and 24 hour worldwide cover are two other helpful benefits that many insurers offer for no cost or for a small fee.
- Many insurers offer discounts to buyers who pay the premiums once a year in advance either online or via the phone. Other methods of premium payments may also be offered to these buyers. Some insurers also offer discounts to buyers who purchase an adequate cover as per their profession, usually the higher the cover amount t the more the discount.
What to Remember
- Income insurance plans for pilots can protect the policy holder when he has to take leave from his work due to illness or injury. The exact terms of the policy will depend on the definitions mentioned in the contract. These definitions will determine the amount of compensation the policy holder gets and the eligibility criteria. Exclusions if any will also be mentioned in the contract. The product disclosure statement is an important legal document handed over to buyers when they agree to purchase a selected contract. This document has details of fees, terms and important facts about the purchased plan.
- Income covers are not the same as trauma covers however; income covers can be combined with trauma covers to ensure that the policy holder gets maximum perks. Trauma covers pay out one large pre-decided lump sum payment when the policy holder is either successfully diagnosed with a medical condition such as cancer or recovers from a medical condition such as cancer. The nature of the illness will determine when the compensation payment is provided. For instance, if the illness is terminal and there are less to no hopes for recovery then the compensation payment will be given upon diagnosis so that the policy holder can stay comfortable for as long as possible.