Reasons to Review your Income Protection Policy

Due to the number of insurance companies vying for your business, there are a large variety of alternative income protection insurance policies available, each with their own individual attractions.

Due to this, it is definitely advisable to review your insurance policy annually to ensure that you are receiving the best available deal for your requirements.

Ensure that your policy clearly defines the nature of your situation. Australian Income Protection policies normally use these levels of interpretation to assess levels of disability.

  • Duties based: In the event of your being unable to execute the tasks of your occupation.
  • Hours based: Adjusted number of hours that you work.
  • Income based: Where you incur a loss of income due to disability.

What does this all mean?

Duties Based: You will be paid a full benefit in the event of you being unable to execute the tasks of your occupation and because of this you are unable to work.

Hours Based: You will be paid a full benefit due to the number of hours that you work being adjusted for no more than 10 hours per week.

Income Based: Where you incur a loss of income of 20% or greater due to a disability, illness or injury. If you are unable to continue working and earn income, then the income protection benefit that you receive will be reduced.

Most of the Income Protection Policies follow the duties based procedure, however there are now policies available that include all these definitions and allow the client to select which option is best suited at the time the claim is lodged.

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Published on September 9-th, 2010 in 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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Any information or advice contained on this website is general in nature and has been prepared without taking into account your objectives, financial situation or needs.

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