Frequently asked questions about income protection
Should I use an adviser or buy directly from an insurer?
If you choose to use a financial adviser, they can compare the market for you, finding the widest range of options. They can also help tailor the policy to your needs, explain it all to you and walk you through the application process. Of course, they will take a fee and some time.
If you want to buy income protection insurance directly from an insurance company, use a comparison website to shop around for policies. Most insurers can provide a quote via their website or by phone. If youβre doing it on your own, make sure you declare all pre-existing conditions and read the fine print to avoid being rejected if you make a claim.
Should I get cover through super?
If you get income protection through your super, the benefit is paid through the super funds you have accumulated, so there are no up-front expenses. However, you donβt tend to have as much choice with policies offered through super. Thereβs often little or no choice of waiting period, benefit period or definition of occupation. The other down-side is that if you change super funds, youβll lose your cover. It will also be eating up your retirement funds, however, if itβs difficult for you to pay premiums, itβs a cheaper option to pay through super.
Can I get long-term cover?
Income protection is designed for temporary relief, but you can get policies that last for 5 years of up to 65 years of age. Itβs easier to qualify for these policies when youβre younger. When shopping for policies, look at the maximum benefit period. Of course the longer you want to be covered, the more expensive the premium. You need to balance out the features you need from a policy with what you can sustainably afford over time.
What is day one accident cover?
Day 1 accident cover is an option which allows you to access benefits early. This form of cover gives you protection in case you need money during the initial waiting period. Itβs an option on some policies, so check the individual policy and insurer. This feature can also be called βAccidental Injury Optionβ, βAccident Benefit Optionβ or βDay Four Accidentβ.
Can I apply for cover if I am already ill or injured?
No, you canβt apply for a policy to cover your current situation. However, you could apply for income protection insurance for future illness or injury, although insurers might define your current condition asΒ a pre-existing conditionΒ which will mean higher premiums. It will all depend on the nature of your current situation.
What is βthe minimum working hours required to receive coverβ?
βMinimum working hours required to receive coverβ is a common condition in policies. It defines your obligations in terms of hours you need to work each week in order to be eligible for cover.