Income Protection Insurance
It is common to have income protection insurance included by default in a superannuation policy, however, you should investigate whether your Fund includes this insurance in your Policy. Otherwise, income protection insurance can be purchased separately.
If a claim is approved payments are usually provided monthly and can be up to 75% of your income and payable for up to 2 years or to age 65. These payments, however, may be offset against any worker’s compensation benefits, common law damages, or even Centrelink benefits. The income protection payments could also cease if employment is terminated or if you are paid a Total and Permanent Disability (“TPD”) lump sum.
Time limits for bringing a claim may also apply, however, this will depend upon the terms of your insurance policy.
Upon the policy holder’s death, the beneficiaries will be required to notify the insurer and provide them with the relevant claim forms and documentation. This information will then be assessed by the insurer who will decide upon the claim’s validity. In the event of the claim being approved, the policy will be paid out to the beneficiaries and it will cease to exist, thus preventing any further claims.
In some cases there may be strict time limits. Any person who may have a claim on an income protection insurance policy should seek advice as soon as possible to ensure a claim is lodged within time.
You should always seek independent financial advice to decide whether this type of insurance is suitable for you.
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