Published 30 Dec 2015
If you have suffered an injury which means you can't continue to work and receive remuneration, it can be especially hard to make ends meet.
Due to your financial situation, you may not be able to meet your financial obligations obligations, settle medical bills related to your injury or sickness or maintain your standard of living. This is where Income Protection Insurance can be a true game-changer.
What is Income Protection Insurance?
Across Australia, people have a range of insurance providers that offer this type of policy. Essentially, if you get injured or sick and can't perform your regular job and collect income, this insurance provides a regular stream of money to aid your recovery.
While the wording might change from policy to policy, claiming this income protection is an option taken by many across the country every year. According to Financial Services Council statistics published by News Limited, there were more than 34,000 income protection claims during 2011 - totalling in excess of $1 billion.
How much of my regular income can I claim?
It is a common misconception that you can claim your entire income under this form of insurance policy. However, this isn't true.
Many insurance policies dictate that only around 75 per cent of your gross salary is accessible and this could be restricted based on the size of your income. For example, in many cases, there is an upper limit of $250,000.
Of course, this can be complex to those without experience in insurance. This is why it is important to discuss your situation with a professional superannuation lawyer who can examine your personal situation and ensure you get the best solution.
What other factors do I need to know about?
There a number of other elements that you'll need to understand before making an income protection claim.
Firstly, there is the possibility that you won't be paid on such a regular basis that you did before your injury or illness. Most benefits of this nature are paid on a monthly basis and is no chance that the entire gross salary can be paid out at once.
Secondly, in some cases and policies, there are other factors that will limit your access to the income. This could be related to the length of time after you stopped work or having access once you get to a certain age.
For more information about Income Protection Insurance Claims, feel free to get in contact with our friendly team today.