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Sickness & Accident Insurance Comparison

Sickness and Accident Insurance


Sickness and Accident Insurance was the original name given to income protection insurance. The term is slowly being phased out however the fundamentals are still the same between sickness and accident policies, income protection, or income insurance policies.

While they might sound different, all of these terms are used to promote the same type of policy. They cover you for 75% of your salary should you suffer a sickness or accident and be cannot work.

The only changes that have happened over the years are that very early “sickness and accident insurance” policies used to offer different waiting periods for either sickness or accidents. This increased flexibility allowed you to elect a 30 day waiting period for accidents, and a 90 day waiting period for sicknesses under the one policy.

The other main difference is that these policies also had lifetime benefit periods, which meant that you would potentially be paid monthly benefits up until you passed away. However the maximum benefit period available now is up to age 65 or 70 depending on the insurer.

Sickness and Accident Cover vs Income Protection Insurance

1. Claim Benefits – sickness and accident insurance policies used to pay claim benefits until death.

With income protection insurance you have the option of choosing a benefit period of 2 or 5 years, or up to age 65 or 70.

2. Waiting Periods & Benefit Periods – sickness and accident insurance used to offer variable waiting and benefit periods. In this scenario you could have potentially chosen a shorter benefit period for accidents, and a shorter or longer waiting or benefit period for sicknesses.

Income protection insurance on the other hand treats both sickness and accidents with the same waiting and benefit period.

3. Premium Costs – due to the long benefit periods for sickness and accident insurance, premiums were very high and were often not affordable for the everyday Australian.

In comparison, income protection insurance premiums with a shorter benefit period are far cheaper.

Alternatives to Sickness and Accident Insurance

Apart from income protection insurance, the only other type of cover similar to sickness and accident insurance is ‘Accident Insurance’.

Accident insurance is now currently available from select life insurance companies, and protects you against accidents only. Similarly to income protection cover, accident insurance pays you up to 75% of your salary if you suffer an accident.

Whether you are looking for a competitively priced income protection policy, or accident insurance policy, speak to a Income Protection Direct Adviser to discuss your individual needs.

Sickness and Accident Insurance