Income Protection Claims - Frequently Asked Questions

In this article we try to answer most common questions about income protection claims. As you know, income protection insurance pays a monthly benefit if you unable to work due to illness or injury.

The claims process

What happens to my policy if the claim is accepted?
In the event of claim your policy will remain in force and you will stay insured. Your income protection premiums will be waived until your claim is finalised.

Why do I need to complete monthly progress claim forms?
Insurance companies want to know how your condition is progressing. And as benefits are assessed on a monthly basis these forms will help them better understand and evaluate your condition.

What happens if my claim is not accepted?
Usually your Case Manager will contact you to explain their decision and also provide reasons in writing.

Benefits and premiums

Who will be paid the monthly benefit?
The monthly benefit will be paid to the policy owner that insurance companies have on their records.

When will I be paid?
Generally benefits are paid from the end of the waiting period, monthly in arrears. That means if your waiting period is 30 days you will receive first payment after 60 days. However, there are some benefits that are payable during the waiting period.

How much will I be paid?
Insurance companies will pay the monthly benefit applicable when your condition satisfies the terms and conditions of your policy. Please read your Product Disclosure Statement carefully. In most cases your Case Manager will confirm the amount payable.

How will I be paid?
Usually you will get paid by cheque or direct credit to your nominated account.

Do I need to pay my policy premiums while my claim is being assessed?
Yes, you need to continue to pay premiums while your claim is being assessed.

When do I restart paying my Income Protection premiums?
Generally, you restart paying your Income Protection premiums once your benefit payments cease. As always your Case Manager will let you know when premium payments are to restart and the amount due.


Does insurance company deduct tax from my benefit payments?
Most of the time insurance companies do not deduct tax from your income protection payments. You should keep any payment letters for tax purposes. Please check PDS of your particular policy.

Dispute resolution process

What is the internal dispute resolution process?
If you are dissatisfied with insurance company's decision in relation to your claim, you can request a review under internal dispute resolution process. Under this process your concerns will be reviewed by a third party who was not the initial decision maker.

What is the external dispute resolution process?
If you remain dissatisfied following a review under internal dispute resolution process, you may wish to contact the Financial Ombudsman Service.

However internal dispute resolution process must be exhausted first and only then if decision is unsatisfactory you can contact Financial Ombudsman Service.

More information

Who do I contact if I have further questions?
Please call us on 1300 793 143 or fill out the form on this page and one of our consultants will help you with any question you have.

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Published on October 10-st, 2010 in Income Protection Insurance
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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