Basic and comprehensive benefits of income protection insurance plans
- While it is common knowledge that income covers offer a large percentage of the policy holder’s annual income towards timey payments once a claim is filed, only a few people are aware of the true benefits offered by these covers.
- Income protection plans are designed to help members of income covers get rehabilitation benefits, accommodation benefits, transplant surgery benefits and even a death benefit when the need arises. For instance, the rehabilitation expenses benefits allow the member to get back on his feet after a severe accident. This benefit provides financial support to those policy holders who want to get back to normal. Similarly the other benefits offered by these insurance plans are designed to help members recover from illness and injuries without having to constantly worry about money.
- The complete list of benefits offered by income covers will depend on your budget and the insurer’s conditions. Before purchasing a policy, buyers can choose to check this list on various insurance websites.
- Cheaper policies that offer limited benefits may be offered for as less as $7 a month however; good policies that allow members to enjoy the true benefits of these plans may be offered for $10 onwards every month. Cheaper policies that offer fewer benefits also offer a short benefit period, an indemnity contract and have many other limitations.
Must know facts about income insurance
- Income insurance plans are beneficial to those individuals who do not want to suffer financially when they face a situation due to which they cannot earn income temporarily. Income covers not only protect the policy holder but also his family since the compensation payments provided can not only be used for personal expenses but also for household bills, school fees and mortgage repayments.
- The compensation payments given to policy holders in Australia depend largely on the cover limit and the eligibility of policy holders, however; policy holders can expect to receive a maximum of 75% of their yearly income towards these payments. The payments given to policy holders are calculated based on the pre-tax salary of the policy holder; hence people who opt for these plans can expect one or more tax benefits.
- Income covers are offered only to permanent Australian residents who work for part time or full time. These covers are offered to buyers of various professions and both blue collar and white collar employees can opt for these plans. Self-employed individuals can also enjoy the benefits of business expenses insurance plans while homemakers can enjoy the benefits of income covers for homemakers. Entrepreneurs who work from home can also enjoy the benefits offered by these plans.
Five important facts about the benefit period
- The benefit period does not refer to the total number of years the income protection insurance plan is valid. The benefit period only refers to the total amount of time the policy holder is eligible to use the benefits offered to him. The benefit period is shorter than the total number of years the contract is valid.
- The benefit period of income covers can vary from insurer to insurer however; usually buyers can choose if they want to enjoy the benefits offered for just 2 years or as much as 5 years. Flexible plans ensure that the buyer is fully in control and can choose if he wants to enjoy the benefits for a short time or for a long time. Flexible plans also allow buyers to decide for themselves, if they want a short waiting period, long waiting period or want to opt for the default waiting period.
- During the benefit period the member can get basic compensation payments along with additional perks if he is eligible. To know which additional perks you are eligible to receive you can either contact the insurer or you can go through the legal document you receive when you purchase the contract. Remember exclusions, loading fees if any and other terms are mentioned in this legal document, hence reading it before giving the final go ahead is a must.
- The policy holder is eligible to use the benefits given to him once he files a claim and once the claim is accepted. It should be noted that claims cannot be filed when the waiting period is active since claims filed at this time will be rejected. The waiting period can be as less as 2 weeks or as much as 2 years. Since different policies have different waiting periods, buyers should check the insurer’s website of the insurance comparison company’s website to ensure that they get a plan suitable for them. Buyers who have chosen to purchase the day one claim benefit do not have to worry about the waiting period since the day one claim benefit will ensure that the policy holder’s claims are accepted even when the waiting period is active. It should be noted that the day one claim benefit will only help the member when he meets the claim eligibility criteria. All claims made using the day one claim benefit are paid when the waiting period is over.
- Opting for a shorter benefit period may seem to be a good way to save money; however you should note that choosing a short benefit period has various implications. For instance, choosing a 2 year period to enjoy the benefits will limit the number of compensation payments you can get if you are seriously injured or seriously ill. Before choosing this important feature of your plan, take a while to consider your health status, your personal circumstances and your financial circumstances. People with dependants are often urged to opt for a longer benefit period since this ensures that the family remains protected while dependants such as children still need the income of their parents for school fees and other things. Remember, a dependant is any living being that depends on you for its existence which implies that pets are dependants as well.