Who will look after your finances if you can't work due to sickness or injury? Health
insurance may cover a proportion of your medical bill, but it won't cover your rent or
mortgage and living costs. With income protection insurance you can get up to 75% of your
regular income if you can't work due to disability. This means you can concentrate on
recovering and getting back to work, rather than watching your investments and savings
slowly diminish.
Income protection insurance pays a monthly benefit amount if you are unable to work for
longer than the waiting period because of a sickness or injury. It is designed to
replace lost monthly earnings, up to an agreed amount (usually 75% of your regular income).
This policy covers you worldwide, 24 hours per day.
Under this policy Insurers may also reimburse money spent to help you rehabilitate and
return to work and make a payment on death. They can also pay more if various extra
options are selected.
You can take this policy out to insure against your disablement in which case you are
the insured person as well as the policy owner. Your family trust or company can also
take out this policy to insure against your disablement. In this case you are the
insured person and the policy owner is your family trust or company.
In the event of a claim the insurer pays the policy owner.
Insurers usually guarantee that they will not cancel or modify your policy after it
has been issued because of your future claims experience, a change in your health,
occupation or income, or in the event that you move, travel, become unemployed or
participate in a dangerous pastime. Your policy can only be cancelled or changed in
these circumstances if you request it.
For some occupations, they may issue the policy on a cancelable basis and this
guarantee will not apply. You can continue this policy until you reach age 65, unless
you choose a payment period ending at age 55 or 60, in which case the policy will end
when you reach that age, or on your permanent retirement.
For some occupations, you may be able to renew your policy after it expires until
you reach age 75. Cover under the renewed policy may be less than under the expired
policy.
Your cover is maintained by the payment of premiums. Your premiums are based on various
factors including the monthly benefit amount you choose, the frequency of payments,
your age, your sex, occupation, and whether you smoke.
