Our Insurers

Why is it important?

Unfortunately, nobody knows when an accident or illness may strike. It is a little known fact that most insurance claims are for illnesses not accidents, and of course these are not covered by Workers' Compensation or other social security payments. A study found that around half of all Australians over the age of 30 will suffer a major illness that can lead to long-term disability, and consequently, are disabled for longer than three months during their working lives

Probably the most crucial and flexible insurance. Designed to replace your income if you are unable to work due to sickness or injury, covering you 24 hours a day, worldwide. Your most valuable asset can be your ability to produce an income and this must be protected.

People insure their cars, home and contents, yet maintaining all of these material possessions is reliant on our ongoing ability to earn an income. If you are sick or injured you may have some sick leave, or are able to draw on cash reserves for a short period of time. But consider the financial consequences of longer term incapacitation - for example 3 months of longer.

Ask yourself? –

How long could you survive financially if your income stopped tomorrow?
Implementing an insurance policy which provides a monthly income during periods of longer term incapacity represents a logical, cost effective alternative. It is not uncommon for a couple to spend 15 years building up their assets, to then see it all go within 2 years because no income was received due to an injury or illness.

How does it work?

Income Protection insurance is designed to substitute the insured person's normal income (usually up to 75% of their normal income) with monthly payments if you are unable to work as a result of illness or injury. The cover can be structured in a number of ways and the following options impact quite considerably on the premium cost:

Waiting Period (or Excess Period) - the amount of days you will need to wait from disablement before monthly replacement benefits become payable. Variables are 14, 30, 60 and 90 days or 6, 12 and 24 months, depending on your possible sick leave or maybe long service leave.

Benefit Period - the maximum period of time a claim will be paid. Choices are normally 2 years, 5 years or through to age 65 or age 70. Naturally, the premium costs vary depending on which of these options you choose.

Claims Escalation (optional) - if a claim occurs, this will indexed the payments each year inline with the Consumer Price Index or a set percentage. Usually more applicable to Benefit Periods through to age 65.

 Agreed Value or Indemnity Value: The monthly benefit in an Agreed Value policy is derived from your gross income at the time the cover commences. This is especially beneficial for self employed workers (or business owners), employed people whos income is likely to fluctuate or women who are like to have children in the futre and have some time off work unpaided because sometimes their income in the previous financial year may have dropped prior to making a claim. Why does this sometimes happen? Sometimes when someone is self employed they will try to reduce their taxable income each year by claiming as many expenses as possible off their tax bill which affects their income level the insurer will cover or when business is getting tight and not as much income is coming through the door, the owner (you) can get stressed and distracted, which can lead to a drop in you health and/or increase chance of an accident, which in turn can lead to an Income Protection claim.

Therefore, under Agreed Value any drop in income will not affect your Income Protection sum insured amount because it was ‘Agreed' upon when you first took it out. 

The monthly benefit in an Indemnity policy is derived from your gross income at the time of claim (i.e. it is restricted to the sum insured or 75% of your income at the time of claim, whichever is the lesser). The benefit with this type of cover is that you do not have to supply financial records when taking out a policy. The down-side is that you will have to supply this when (if) you come to claim. These policies are generally cheaper than the Agreed Value policies and any drop in income will allow the insurer to reduce the benefits you will receive at claim time.

Tax deductible: Importantly, the cost of income protection is fully tax deductible. The cost varies significantly based upon the waiting period, benefit period, amount of income insured and the insured occupation. 

We will research the most appropriate: Unlike some other forms of insurance, there are substantial differences between the quality of Income Protection policies currently available in the market and it is important that you obtain cover which is not overly restrictive and where you feel comfortable that a legitimate claim will be honored. The way in which the various policy features and benefits of an Income Protection policy are defined can play a critical role in determining whether a claim is payable - we subscribe to an independent research firm (Cannex Pty Ltd), which researches and compares the various contracts available to consumers. We utilised their evaluation to assist in selecting an appropriate policy for you.

After your health and happiness, your ability to earn an income is without doubt your most valuable asset. Providing for yourself or your family is your biggest responsibility.

Income Protection also gives you peace of mind, knowing that your family is financially protected should you be unable to work.

What would happen if you had an illness or accident today that prevented you from working?.

For further information click here