Find the answers to some of the most frequently asked questions about income protection.
How does income protection differ from critical illness insurance?
Both income protection and critical illness cover offer financial support if you are unable to work for a duration due to illness or injury. Critical illness cover has a specific list of illnesses that are covered. Income protection has a much wider list of illnesses that are covered. Monthly pay-outs are made with income protection, with critical illness cover providing a single lump sum pay-out.
What impacts how much the monthly premiums are?
Your monthly premium may be impacted by your age and general health/medical history. If you have a job that carries a risk of injury, this will be factored in. The same is true for any more risky hobbies you may have. There is typically a waiting period following your illness or injury before income protection payments start. The longer the waiting period, the lower your monthly premiums may be. The percentage of your regular income that is covered will also impact your monthly premiums. Overall, the higher the risk-level your protection provider deems you to have, the higher your monthly premiums will be, in most cases.
What percentage of your regular income will be paid out following a successful claim?
The percentage of your regular income that you’ll receive as pay-out following a successful claim may differ by policy. Typically, up to 70% of your regular income will be protected, subject to policy maximums regarding monthly pay-outs.
How long will your income protection pay out for?
Your income protection policy will continue to pay out each month until you are able to return to work, or the policy reaches its end-date, whichever is first.
Will the income protection plan pay-out immediately?
Your income protection plan will not pay-out as soon as you are unable to work. Your policy will define a waiting period, after which time pay-outs will begin, should you still be unable to work. These waiting period differ by provider, and is chosen at the time you set up the policy. It may be as little as 4 weeks, or could be up to 26 weeks, for example.
Does income protection cover you if you become unemployed?
Income protection is only available to you if you are employed. This means that should you be made redundant, you’ll be unable to claim your income protection, and your policy will cease.
Is income protection cover available if you have a pre-existing condition?
Some pre-existing conditions may still be covered by your income protection policy provider. It is important to divulge your complete medical history before you take out the policy to avoid any surprises later. If you have not been truthful about pre-existing conditions, your policy may be voided.
Are all illnesses covered by income protection?
Typically, income protection covers any illness that comes under the provider’s definition of illness. The illness must render you unable to continue your job for a prolonged period, due to the waiting period, to be eligible. Some pre-existing conditions may be exempt. For those with a serious illness, you may find critical illness cover to be more suitable for your needs. Contact the Bell Mortgage Solutions team to ensure your chosen protection policy will meet your needs.
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