Income Protection Quotes – How To Compare
Completing a comparison of all the income protection quotes available is the first step to take in finding a suitable income protection insurance policy for you. We have put together the key variables to take into consideration when comparing quotes.
What Type of Policy are we comparing?
There are three main policy types to consider when seeking an income protection quote:
- Indemnity Value – Your monthly benefit will constitute the lesser of 75% (or a similar proportion) of your pre-claim income, or a predetermined monthly benefit. You are required to prove your income at claim time, therefore this means that your benefit is subject to any decrease in income earned between application and claim time.
- Agreed Value – sets in stone your monthly benefit at the time of application, rather than at claim time. The value of your monthly benefit is based on income earned prior to application and hence is not subject to any changes in income between application and claim time.
- Guaranteed or Endorsed Value – Essentially the same as the agreed value policy, this option requires proof of income at time of application.
What are the Waiting Periods?
Once you make your claim, the waiting period is the amount of time you are willing to wait before your benefit period commences.
- Generally speaking, the longer your waiting period, the lower your premium, however the more severe the illness or accident has to be before you can go on claim.
- Waiting periods for income protection policies usually range from 14, 30, 60, 90, 180, 360, and up to 720 days.
The benefit period is the maximum amount of time that you will receive your monthly benefit. The amount of time is usually 2 years, 5 years, or until the age of 65.
Unlike other types of insurance that usually pay your benefit in a lump sum payment, income protection is generally paid in monthly benefits.
Compare the Types of Quotes
There are two types of premiums:
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- Level Premiums – where your premium remains the same over time.
- Stepped Premiums – where your premium increases every year. This option may be cheaper at the beginning of your contract, but will become more expensive over time.
Your occupation rating is not based upon your work title but rather the duties you perform at work, providing an assessment of your workplace risk to your insurer.
Compare your Built-in Options
Some of the key built-in benefits of income protection insurance include:
- Specific injury benefit – if you sustain a specific injury during your period of cover, you will generally receive a minimum benefit for the length of the specified payment period regardless if you are totally disabled, require ongoing medical treatment or are working.
- Rehabilitation expenses benefit – provides you with a reimbursement for participation in a rehabilitation program generally up to six times your benefit amount.
- Waiver of premium benefit – whilst on claim, you don’t have to pay premiums for your cover. Depending on your insurer, premiums may also be waived for your waiting period.
If you want to ensure you are making an informed decision or would like to receive an income protection quote and comprehensive comparison, please contact one of our advisers on 1300 135 205.