What is Income Protection Insurance?Income Protection Insurance pays an Income Benefit if one is unable to work due to a Disabling Sickness or Injury for longer than the chosen Waiting Period. In addition, the person has the option of adding rehabilitation benefits which are designed to help one to get back to work.Income Protection Insurance eligibility:One can apply for Income Protection Insurance if they are working at least 20 hours per week and have been working in this capacity for at least 12 months prior to the Policy Commencement Date. He/she must be an Australian Resident aged between 18 and 59. Income Protection Insurance Benefit amount:The minimum and maximum Income Benefit amount that one can apply for at the Policy commencement Date is shown below:
Minimum monthly Income Benefit amount- $1,000
Maximum monthly Income Benefit amount — 75% of your monthly Pre-Tax Income up to a maximum monthly benefit of 810,000.
The Income Benefit payable will not exceed 75% of the average monthly Pre-Disability Income.Income Protection Insurance benefits payment:Income Protection Insurance Australia pays the benefits if
A person suffers a Disabling Sickness or Injury while covered under the Policy:
Remain continuously Disabled during the Waiting Period;
Is continuously Disabled after the end of the Waiting Period,
Is solely because of the Disabling Sickness or Injury, the capacity to earn the Pre-Disability Income, from their Regular Occupation reduces by 20% or more.
The Income Benefit in Income Protection Insurance Australia is payable monthly in arrears during the Benefit Period, with the first payment occurring one month after the end of the Waiting Period. For partial months the amount paid will be at the rate of 1/30th of the Income Benefit for each day the Life Insured suffers a Disabling Sickness or Injury after the end of the 30 day Waiting Period.The Policy Schedule shows the Benefit Period and Waiting Period a person has chosen.Benefit Period:The Benefit Period is the maximum period of time that the Income Benefit will be paid for any one Disabling Sickness or Injury claim made under the Income Protection Insurance. When one applies for cover, he/she can choose a 6 month, I year, 2 years or 5 years Benefit Period. The Benefit Period starts at the end of the Waiting Period and continues until the earliest of:
The end of the Benefit Period shown on the Policy Schedule; or
The date when the policy holder is no longer Disabled; or
The Policy Anniversary following the 65th birthday; or
The date the Policy ends.
Income Benefit amount:The Income Benefit payable may be less than the Monthly Amount Insured shown on the Policy Schedule. The Income Benefit payable will be calculated as the lesser of:
The Monthly Amount Insured; and
75% of the Pre-Disability Income.
If one is receiving Other Payments, this amount may then be reduced so that the combined total of the monthly amount paid, and the Other Payments received, is no more than the lesser:
The Monthly Amount Insured; and
75% of Pre-Disability Income.
To make a claim, it is required to provide satisfactory financial evidence of the Pre-Disability Income. It will help the policy holders to receive the Income Benefit until the earliest:
The Disabling Sickness or Injury giving rise to the claim does not prevent the holder from earning Pre-Disability Income from the Regular Occupation; or
The Benefit Period ends; or
The Policy ends; or
The death; or
The person is no longer under the regular care of a Medical Practitioner with regard to treatment of the Disabling Sickness or Injury; or
The holder is no longer following the treatment recommended by a Medical Practitioner at such intervals and frequency as will lead to a cure, alleviation, or minimization of the condition causing the Disabling Sickness or Injury.