Income protection for admin workers
Searching for income insurance information can be a daunting task, with a quick google search turning up company after company, PDS after PDS. Often people settle for the quickest or easiest option, and for this reason they can end up paying too much. We have reviewed income protection policies for Administration workers, and have prepared this article to help you find a policy to suit your occupation, so you don’t have to end up paying more than necessary.
How income protection works
If for a period of time you are unable to work due to injury or sickness, income protection insurance may pay you up to 75% of your pre-claim salary. The length of time you can receive this benefit, and how long you must be out of work before you can make a claim depends on your policies benefit period and waiting period respectively.
The benefit period - the amount of time you will receive your payment while unable to work - is usually set at either two or five years, or up to age 65. Waiting period options - the length of time from when you are unable to work, until your first claim benefit - are usually 14 days, 30 days, or 90 days. Your insurance premiums will normally vary based on your choices for benefit and waiting periods.
Your premium can generally be paid either out of your superannuation, or disposable income. Premiums paid from income are often tax deductible at your marginal tax rate, while paying through super usually generates a 15% up front tax rebate.
Less than 10% manual duties
Remember, insurance companies are in the business of risk management. The more inherently risky an occupation is, the higher the premium that worker is likely to pay. For this reason administration workers who perform less than 10% manual duties are often placed in a different bracket to those with a more physically demanding role, and end up paying less. Be sure you are given the correct rating during the sign up process, so you are not paying more than necessary. If you manage people you might even be entitled to a better occupational rating which will further reduce the price. If you contact Rate Detective, fully describe your occupation so we can assess the appropriate rating.
Spend only on the benefits relevant to you
One of the most commonly requested benefits amongst Admin workers is the ‘specific injury benefit’. This feature, which comes standard with some policies, will pay an upfront lump sum amount which is a multiple of your monthly benefit regardless of whether you require any time off work. The multiple paid is tied to the seriousness of the condition. For example, fracturing your upper arm may pay 2 months benefit, or a fracture of your jaw one month. You will need to check the PDS for the benefit periods specific to your policy. This payment is also usually made straight away, i.e. no waiting period.
We have found that often our clients have features and benefits that they pay a premium for that they are not even aware of. In those cases it might be questionable if they actually need the bells and whistles. Looking into a more standard policy can save you around 20% as you are not paying premiums for policy features you may never use.