What Does Income Protection Insurance Cover?

Income Protection Insurance

One of the critical questions you should ask when considering income insurance is that “Income protection insurance what does it cover?”

The answer to this question largely depends on the particular policy you are looking at.

As such, it is important to take the time to carefully read the fine print of a policy so you know the conditions covered in it. However, certain generalities are applied in regard to income protection that you should be aware of.

What is covered?

The two major areas covered by income protection insurance are injury and illness. In case of disability as a result of any of the two, you receive a monthly benefit that could be up to 75 percent of your salary. In order to make a successful claim when you are unable to work temporarily, you may require medical evidence to back your claim before you can receive your benefits.

What is not covered?

Losing your job or becoming redundant is typically not covered under most income protection policies. In addition, although a portion of your income would be covered if you are self-employed, your business expenses are not covered during recovery. Pregnancy is also excluded from most income protection policies, although any disability that persists for more than 90 days after the end of the pregnancy could be covered in certain policies.

Medical conditions

Certain medical conditions may not be covered under income protection. The most common include mental illness and diabetes. If you have a history or mental illness or are living with diabetes, it is important to find an insurer that does not exclude these conditions from your coverage. In both cases, the underwriting process may involve a lot of scrutiny. Ultimately, the insurer may choose to deny you coverage or offer you standard or higher premium rates based on the level of risk that would be incurred.

Medical history

In the case of mental illness, you may be required to provide information. Visit our website about your mental health history. This could include details such as how serious your condition was, how long you suffered from it, the medication that you took and whether you had to take time off work for treatment or recovery. Your doctor may also be contacted to provide information on future risk.

Medical tests

If you are a diabetic, you may be required to undergo a medical test and provide the results for previous tests. Generally, you can receive favorable terms for cover if your condition is well managed. You may also be required to provide information on your height and weight – being overweight increases the risk of complications associated with diabetes and could easily mean costly premiums. Read: Why You Should Enroll Your Family to an Insurance Service

Other situations that are excluded from most income protection policies include alcohol or drug related illnesses or injuries that hinder you from working, as well as any intentional self-inflicted injury or illness. Again, it is vital to understand exactly what is covered in your income insurance policy before you buy your cover. If you are not sure about the extent to which you are covered through income protection, speak to your financial planner before taking out a policy so you can ensure you are getting coverage that suits your circumstances.