Planning for the worst can be unpleasant when thinking ahead about your life. The prospect of being unable to work due to illness or injury can be frightening, but an online income protection quote can help you feel more secure. Most people, however, are concerned that even an insurance policy won’t provide them with the protection they need.
Whether they’re worried about being rejected when claiming or that they won’t be covered for what they need, many people neglect to buy income protection insurance.
Furthermore, making a claim is super simple and designed to be easy for you during a stressful time. We’ll walk you through how the income protection policy works and how claims are processed, so you’re ready for anything!
How does Income Protection Insurance work?
When you can’t work, income protection protects you. In the event of an illness or injury, Income Protection replaces a percentage of your salary (up to 85%) in monthly instalments. Your payments continue until you return to work, retire, or the policy term ends and you stop paying.
Referral periods are also included in the policies. This is the time between making a claim and receiving a payout. Premiums are cheaper with a longer deferral period. You can set no deferral period or a minimal one if that suits you better.
Income Protection Claims
When you cannot work due to an injury or illness, it can be a difficult and uncertain time. A claim for income protection online is a request for a monthly benefit payment after becoming temporarily unable to work because of an illness or injury. If you believe you may be eligible to claim an Income Protection benefit, three steps are to be followed for you to submit an Income Protection claim:
- Contact your insurance provider
- Provide the necessary information
- Complete and return your Income Protection claim form
Income protection claims with partial incapacity
It is still possible to claim benefits under most income protection policies even if you are partially disabled.
What is partial incapacity?
Insurance companies can define partial incapacity differently, so you should carefully read the Product Disclosure Statement to see how your policy defines it.
In general, you must be disabled for a certain number of days before being able to return to work with a reduced capacity to be eligible for a partial incapacity benefit.
Benefits will supplement your income if you are eligible to claim them because of your reduced work capacity.
How do Income protection claims and partial incapacity work?
You may receive partial incapacity benefits based on a variety of formulas used by insurers. The following formula is used by insurers (note that you will not find the same formula in all policies):
Consider the example of Ava
- Ava was earning $90,000.00 and working full time before she injured her back.
- Her income protection insurance covers her $6,000.00 per month.
- Due to her injury, her doctor advised her to work only 4 days a week (equivalent to $74,000 per year).
- Ava may claim the following partial incapacity benefits:
Even though Ava is back at work, she may still claim an extra $12,800.00 per year through her income protection insurance.
Convinced?
Contact Aspect Underwriting today for some free legal advice if you’re back at work after an injury or illness, and you don’t know whether you’re entitled to a partial incapacity benefit.