Income protection insurance is important if you are financially dependent on your salary from employment and you have a family to support. However, insurance companies differ with the kind of insurance policies offered and they consider your personal circumstances to determine the premiums that will be paid. It is therefore essential to seek for the top income protection insurance in Australia in order to get best deal but you need to be absolutely sure of the right cover since insurance policies are not only complicated, they can be confusing.
Important things you need to consider when taking out income protection insurance
There are reviews of insurance companies that can be found in the web and they will help you narrow down the list of insurance companies you can work with for income protection. Reviews from the personal accounts of consumers will help you identify the best policies that will suit your requirements. On the other hand, it would help if you have an idea on the specific period of time that you are vulnerable to the loss of income from work. Your needs may vary but if you have children who go to school, you might be needing income protection until they finish with their education. How long the policy should last is also dependent on the mortgage payments for your home and if you are already near retirement age.
Before you get income protection insurance, make sure you talk it out with your employer because there are often generous benefit packages if your illness lasts only for a few months. Sick pay is paid for absences from work due to illness and disability and it can cover the first few months so that you can choose longer waiting time from 30 days to 90 days. The longer the waiting time before you make a claim; the lower will be the insurance premiums. It also makes sense to take in account whether you have enough savings to last you and the family until you are able to return to work. Make sure though that your savings will not be exhausted since you cannot predict financial emergencies.
How insurance premiums are calculated
When you take out income protection insurance, you will be interviewed by the insurance’s medical officer and it is suggested to be truthful with your answers. Do not withhold on information regarding pre-existing conditions or history of illnesses. You might be considered as high insurance risk and pre-existing conditions may be subject to exclusions or you may be required to pay for higher premiums. If you deliberately withhold important information, it may invalidate the policy and your claim will not be paid. You will also be required to undergo medical examination to determine your present health conditions. Always ask if there are things you do not understand and make sure you get a copy of your application form. Read the terms and conditions of the insurance policy before you sign on the dotted line. There are areas that are in fine print which you must read extra carefully.