When selecting an Income Protection Policy one of the key things you will need to choose is the waiting period for your income protection. The waiting period is the time you must wait if you become sick or injured and cannot work before making your claim. At Rate Detective we have found that the majority of our clients choose a 30-day wait, however, other common waiting periods are 14-days, 60 days and 90 days.
The longer the waiting period the less you have to pay for your income protection. The reason for this is is simple. The longer the waiting period, the more likely you are to get back to work without having to make a claim so insurance compaines can make the policy cheaper. For example, if you have a broken arm you might miss 2 months of work. With a 60 day waiting period, you are likely to be back at work without making a claim.
When choosing a waiting period, you need to consider how long you could survive financially if you could not work. If you are self employed, this might be a very short-time since you usually will not have sick leave or annual leave saved up. Unless you have significant savings, you might want to consider a shorter waiting period if self-employed. If you are an employee, and have significant sick leave or annual leave saved up, then the equation changes a little and you might be able to survive a little longer without cash-flow. In such cases, you might look to a 30-day or 60-day wait.
Finall, a little known fact about waiting periods is that for some occupations or age categories shorter waiting periods are not necessarily available. You might have to be content with a 90-day wait. This is usually for risky occupations or for people approaching their late 60s. The choice of waiting periods, varies from insurer to insurer. At Rate Detective we will do all the hard work for you by comparing the top 9 insurers in the market to find the best deal for your occupation, income levels and age and choice of waiting period.