Know Your Options In Income Protection Insurance
Income protection insurance helps you to get back on your feet financially when you are unable to work due to illness or injury. If you are in full time employment and normally use your income to pay for significant debts like mortgage and day to day expenses, then it is critical that you have income protection insurance. Adelaide insurance companies offer various insurance options to help you and your family maintain your lifestyle as you recover till you are able to resume work.
Types Of Income Protection
There are several types of income protection insurance in Adelaide. There is that which is provided by insurance companies, which covers you for up to 75 per cent of your income. It offers you the widest range of benefits and provided that you pay your premiums, the insurer is not allowed to cancel your policy. The insurer will also not be able to change the terms of your insurance policy once you have taken out the policy.
The other type of income protection insurance is the group salary continuance that is taken out by employers for their employees. You will be covered for up to 75 per cent of your salary, but the policy is normally very general and does not address your specific circumstances.
General insurance companies also provide income protection known as sickness and accident insurance. It covers you for specified sicknesses and accidents, but the policy is usually offered at a fixed rate. The biggest problem with this policy is that the insurance provider can cancel the policy. Once you make a claim, the insurance provider might decline to renew your policy, leaving you exposed and vulnerable.
Premiums are calculated differently for income protection insurance. Adelaide insurance providers will normally base your premiums on your age; your premiums continue to increase as you grow older. If your premiums remain the same, then your level of your cover will reduce as you grow older. Your gender, health, occupation, and whether or not you smoke will all be factored in when calculating your premiums.
The benefit period is the length of time during which you will be paid once you are unable to work. Normally, most income protection policies will pay you up to the age of 65 years, or you can choose the number of years that you prefer to be paid. If you choose a longer benefit period, then the premiums you will pay are likely to be higher.
The waiting period refers to the time within which you will not be paid your benefit once you are unable to work. The insurance company will allow you to pick the waiting period that you prefer, which may range from 14 days to 2 years. If you have a shorter waiting period, your premiums will be higher. It is therefore advisable to consider selecting a longer waiting period. Read: Trauma Insurance And TPD – Understanding Their Relevance
In the event that you will be out of work, you can use other sources of savings during your waiting period. Your waiting period may be waived if your insurance policy has an accident benefit. This means you are entitled to your benefit immediately if you are involved in an accident that leaves you unable to work. Click here for more information about income insurance cover.