Find out how Income Protection Insurance benefits are calculated, and what factors are considered when making up your policy.
Income Protection can help give you and your family financial peace of mind if you are unable to work due to illness or injury.
Here are some of the factors that can influence the cost of your Income Protection policy:
- Age—any age between 18 and 60 years is generally insurable within minutes.
- Health behaviours—this can include smoking and your health history.
- Occupation—Your occupation will impact the premiums you pay and if you work in a risky environment this may increase your premiums. Be assured that Insuranceline Income Protection Insurance can cover a range of occupations.
- Sick leave entitlements—paid sick leave periods will cover you for short periods of time. If you don't need your Income Protection Insurance to kick in immediately, you could choose a longer waiting period before a sickness or injury claim becomes payable.
- Savings—this will influence how long you could get by without changing your lifestyle or selling off liquid assets. Conversely, if you live from pay day to pay day, you’d want short waiting periods built into your Income Protection cover.
Depending on what you want your Income Protection to cover, premiums can be as little as a couple of dollars a day. Generally, and depending on your circumstances, you could consider expenses like:
- Rent or mortgage;
- Vehicle and transport (petrol for your car or fares for public transport);
- Household expenses (bills for water, gas, electricity, internet, phone, rates);
- Food and drink;
- Education fees or childcare; and
- Entertainment (clothing, concerts, movies, DVDs)
It’s a good idea to get a rough understanding of your expenses before you get an Income Protection quote. You should also be aware of how you structure your cover, as these can affect how much you get and when you get it. For example, you can tailor your policy according to:
- Waiting periods—this is how long you need to wait to make a claim after taking out the cover. With Insuranceline Income Protection Insurance, you can choose between 14, 28, 60 or 90-day waiting periods.
- Benefit periods—when you set up your cover, you will be asked how long you would like to receive benefits for in case of a claim. With Insuranceline you can receive Income Protection Insurance payouts for 6, 12 or 24 months, or 5 years.
- Additional benefits—you can add extras to your policy that help to enhance your cover, for example the Accidental Benefit Option, which will backdate payments to the start of your 14 or 28-day waiting period if you are unable to work due to an accidental injury.
What does Income Protection Insurance cover?
Income Protection Insurance provides payouts of up to 75% of your income if you are unable to work due to illness or injury. This means your family can keep up with your regular outgoings, even if you are unable to work, leaving you free to focus on your recovery.
Qualifying Periods apply after the Cover Commencement Date for Sickness and Injury Cover and Mental Health-Related Conditions. You will not be paid a Benefit amount for Sickness, Injury or Mental Health-Related Conditions during Qualifying Periods. A Qualifying Period applies when you first take out cover, and if you increase your Monthly Benefit amount.
Please refer to the Combined Product Disclosure Statement and Financial Services Guide for more information.