Anyone who has used it before will tell you that income protection insurance is one of the most important things you can purchase. Let’s face it: Australia isn’t always a cheap place to live, so if anything were to disrupt your income, it could be catastrophic. For the many who aren’t fully clued up on what income protection insurance is and how it can help you, we thought we would share some info on how it can help you in your time of need.
So, what is Income Protection Insurance?
Income protection insurance policies are designed to have your back if you are unable to go to work for long periods of time. The majority of policies will cover up to 70% of a person’s regular wages and can cover them for various amounts of time between three months and three or more years, depending on the policy terms. One of the best things about this insurance is that premiums are often low compared to others, as it is far more unlikely to be used than other types of coverage, such as life insurance. However, we must stress that its low cost doesn’t mean it isn’t essential. In fact, it may be the most important insurance policy you ever take out.
What Income Protection Insurance can and can’t Cover
Income Protection insurance policies tend to be much simpler to understand than others you might encounter. There are a few general rules to follow when making a claim, and that’s it.
- The illness or injury that has prevented you from working for an extended period must not be self-inflicted.
- If the condition preventing you from working was pre-existing before you purchased the insurance, you will not be entitled to claim. However, you can claim if it is a condition that returns every now and again, as long as it started after your insurance plan.
- Before making a claim, you will need to allow enough time to fulfil the policy’s waiting period.
- You must report any changes that may affect your insurance plan.
- Of course, all insurance policies are different, so these are only to be taken as a general rule, but you are unlikely to find anywhere that goes against them.
How income protection insurance is different to others
One significant benefit is that if you claim, your insurance premiums don’t go up! This is one of the tremendous benefits that make it one of the best plans you can join. There are also other great bonuses for each plan, so you will need to see what is out there.
Final thoughts
Although this article may have been brief, we hope it has given you an idea of how helpful income protection insurance is and how it can be beneficial during unforeseen circumstances. There aren’t many policies that can give you peace of mind, cost a reasonable amount, and be easy to claim. If you haven’t got an income protection insurance plan, we recommend you start looking now.
