Income protection insurance is something that every working Australian really needs to have, but just in case you’re unfamiliar with income protection insurance, how it works and what it covers, we’ll go over some of the key points and things to consider in this post. That way you’ll have a better understanding and a far better chance of finding just the right policy to suit your requirements. Let’s get started.
What Is Income Protection Insurance?
The name of this type of insurance policy is fairly self-explanatory. Income protection insurance is simply an insurance policy that covers your income. Just like you might purchase insurance to cover the value of your car or home, insurance for income protects you should you encounter a situation where you are unable to earn your current salary.
If you find yourself out of work and out of action, you’ll have the peace of mind knowing that your income will be covered for a period of time.
How Does It Work?
The first step is obviously finding a policy that suits you and teaming up with an insurance company. Once this is done, if you ever encounter a situation where you can’t earn your regular income, so long as you keep up your insurance policy, the insurer will cover you. Some things the policy will help you cover are:
l Your food and household needs
l School fees
l Having the money to cover loans and debts
l Paying off your mortgage
l Finances to help with your recovery
l And more
Without income protection insurance, if you get injured or fall ill and cannot work, you’ll have no income to cover your living expenses until you can work again.
What Does Income Protection Insurance Cover?
Income protection insurance doesn’t cover every possible scenario that might lead to your inability to earn income, and different insurers will have different policies determining what’s covered and what’s not. Therefore, you must study any insurance policy you’re interested in to understand whether it meets your needs or not fully.
Generally, you’ll be covered for:
l An inability to perform your usual work due to illness or injury
l Temporary or permanent disablement
l A reduced ability to work through injury or illness
It’s important to note that most insurance policies don’t cover you for the following:
l Mental illness
l Time off for injury or illness that is less than the mandatory waiting period to make a claim
Once again, be sure to read and understand the policy thoroughly, so you know what it covers you for.
Making a Claim
Anyone who makes a claim for income protection insurance will be going up against one of the insurance giants, and that’s never an easy task. Keep in mind that while insurance companies love promising customers the world, so you’ll pay your premiums, they are never as excited to pay out money to claimants.
You could try and do the claim yourself, and many people do, but you’ll have a far better chance of a successful result if you enlist the help of income protection insurance lawyers.
You’ll want to team up with a law firm that specializes in this style of law and one that has a good track record of getting results for their clients. Doing a search online for law firms in your area should produce a good shortlist of firms to look at.
The major advantage of hiring a lawyer to make your claim is they know the industry inside and out. They also have a rapport with the insurance companies and have established relationships with key people in the industry. All of this works in your favor.
Many of these law firms will offer you a consultation free of charge in the first instance. This provides you with a chance to consider your claim without any fear of a hefty fee hanging over your head.
Along with a free face to face meeting, you’ll likely discover that when they do take on your case, it’ll be on a “no win no fee” deal. You don’t pay their fee until they win, and you pay nothing if they lose.