1. What are Income Protection Insurance Benefits or IP Benefits?
   Income Protection (IP) insurance benefits are insurance benefits paid as monthly benefits if you can’t work due to injury or illness.
2. Who can claim Income Protection Benefits?
   If you can’t work due to injury or illness and have income protection insurance, you can lodge a claim.
3. Who has Income Protection Cover?
   You might have income protection insurance through your superannuation fund, or you may have it if you applied for insurance through a financial adviser or broker.
4. Are Income Protection Benefits known by any other name?
   Yes, sometimes income protection benefits are called Salary Continuance Insurance (SCI) benefits.
5. What is payable if you make an income protection claim?
   In general terms, income protection benefits are paid as a monthly benefit, with the payments being equal to 75% of your pre-disability earnings. However, this can vary so it’s important to check the policy terms. Some policies also pay an amount into your superannuation fund when you are receiving IP payments.
6. How long are income protection payments paid for?
   Again, this depends on the policy. IP payments can be paid for between 2 years and the remainder of your natural life. However, there are so many different policies. Some policies pay for 5 years, while other policies will continue pay until you turn 65. It varies.
7. How long do I have to wait before I receive income protection payments once I’ve lodged a claim?
   The period of time before your income protection payments start is called the waiting period. Waiting periods can vary. Some policies have 14 day waiting periods, while others have 90 or 120-day waiting periods.
8. What is the policy definition I need to satisfy?
   You guessed it: it will depend on your policy! There are two main policy definitions in income protection policies.  One definition is called an “own occupation” definition, and the other definition is called an “any occupation” definition.
   If you have an “own occupation” definition, for your claim to be successful, you need to show that you cannot work in your own occupation because of injury or illness.
   If you have an “any occupation” definition, for your claim to be successful, you need to show that you cannot work in any occupation. You can see the “any occupation” policies have a much harder definition to satisfy for your claim to be successful.
9. Do I still have to pay insurance premiums if I am receiving income protection payments?
   Not usually. Most policies have what is called a premium waiver so if you aren’t working because of disability, once your claim is accepted the insurance company won’t require you to pay insurance premiums.
10. What else do I need to know?
    There is plenty to know that is not covered here. As the usual legal disclaimer goes – the information here is of a general nature because legal advice always depends on your circumstances.
    There will be further fact sheets available on our website over time so please check back for further information.

Contact

Please call me on (03) 9969 7077 or email me at info@leonardwelch.au and I’ll arrange a time to either come and see you at your house or a place convenient to you or to arrange a phone appointment or video conference.

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