Offered by select insurers as a paid optional feature to your income protection insurance policy, Day 1 Accident Cover is ideal for those who are self-employed or for people who do not have an immediate disposable personal income to help pay for ongoing business or living expenses between the time they claim on their policy and when they start receiving their standard monthly benefits.
How Does Day 1 Accident Cover work?
Generally, if you suffer an accident and are unable to work for at least 3 consecutive days during your waiting period due to accidental injury, your insurance company will entitle you to 1/30th of your monthly benefit for each day you are off work during the waiting period.
For example, if your monthly benefit is $3,000 per month, your insurer will entitle you to $100 per day for each day you are off work during the waiting period.
Any benefit accrued from Day 1 Accident Cover will generally be paid in arrears.
Ability to Claim on this benefit
As Day 1 Accident Cover is a paid optional benefit of income protection insurance, you will need to have first selected it as part of your policy at application time in order to be able to claim on it.
If you wish to claim on this benefit, your insurer will generally consider you to be eligible to claim if you:
- Are unable to perform one or more duties of your occupation, that is important or essential in producing income; and
- Are under the regular care of, and following the advice of, a medical practitioner; and
- Have not been able to work due to accidental injury for the minimum number of days required by your policy.
Minimum number of days you are unable to work
As of the time of writing there are three types of Day 1 Accident Cover options available, each requiring you to be off work due to accidental injury for a different number of days before you are eligible for your benefit to start accruing.
The three different types currently available will require you to be off work for either:
- 3 days, or
- 14 days, or
- 30 days
Before 1/30th of your monthly benefit is accrued daily.
Each of these three types of Day 1 Accident Cover options are priced differently and may have specific conditions attached by the insurer so it is advised that you consult your insurers PDS for further details.
What is the definition of an Accidental Injury?
Insurance companies will generally consider an accidental injury as:
A physical injury which is caused solely and directly be violent, accidental, external and visible means, which occurs while the benefit is in force and which results solely and directly and independently of a pre-existing condition or any other cause in your being unable to work. Sickness directly resulting from medical or surgical treatment rendered necessary by the physical injury will not constitute an accidental injury.
When does Day 1 Accident Cover commence?
The date that your Day 1 Accident Cover commences may vary between insurance companies. Generally, your insurer will consider the start date of the number of consecutive days that you are off work to be the day:
- The accidental injury occurred, or
- You first seek medical advice for your accidental injury
Different insurers may have varying or additional conditions attached to the Day 1 Accident Cover so it is vital that you read your insurer’s Product Disclosure Statement (PDS) for full details.
If you would like a personal quote comparison of the income protection policies offering Day 1 Accident Cover, please call us today on 1300 882 762 to speak with one of our friendly advisers.