What is an income protection claim?
Published 23 Apr 2020
It’s important to be financially prepared for all the different scenarios life can bring, including if you become injured or ill and unable to work. Income protection insurance can be an important safeguard to ensure you can continue your standard of living if you can’t work due to an unforeseen accident or illness.
What’s income protection insurance?
According to Choice, income protection insurance pays part of your income – typically 75% of it – if you’re unable to work. Most insurers have specific requirements for what constitutes an illness or injury that must be met or confirmed by a doctor before a claim is made.
It’s always important to understand your individual insurer’s terms and conditions before signing a contract or filing a claim. After filing a claim, there may be a waiting period before your payments start, which can be as little as two weeks or as long as two years. Additionally, you’ll need to carefully choose how long the monthly payments will last, known as the benefits period.
All of this information will help you choose the best income insurance policy for your needs, so in the event you become injured or sick, you can cover expenses and bills while you’re out of work and focus on getting better.
Who needs income protection insurance?
This coverage is ideal if you are more interested in keeping up with your lifestyle and providing for your family for a period of time while you’re out of work as opposed to granting a lump-sum payment like life insurance would.
You may want to consider income protection insurance if you’re self-employed, a small-business owner or have dependents that rely on your income to survive. Additionally, if you don’t have a lot of sick leave or have multiple monthly payments, this insurance can help serve as a financial cushion if you can’t work.
Filing a claim
When it comes time to file an income protection claim, the Australian Securities and Investments Commission explained you will need to notify your insurer, your superannuation fund and your employer to receive the necessary paperwork. Your insurer will typically require your medical reports outlining the nature and severity of your accident or illness along with a description of your work duties.
If you have questions or concerns about filing an income protection claim, contact the legal experts at Gerard Malouf & Partners.