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Benefits Of Income Protection

Income protection insurance is becoming increasingly popular in Australia since this type of insurance has many benefits. Income cover plans are highly customizable which means that buyers can select benefits, the type of plan they want, the tenure and the types of premiums they want. This type of insurance ensures that people do not have to suffer if they cannot work for a short time due to illness or injury and this income protection covers protect families during tough times.

The main benefit of income protection plans is that the policy holder receives an amount every month after he files a claim. The second benefit of this type of insurance is that the buyer gets additional benefits usually for no extra costs, these benefits include death benefits and surgery benefits. While some insurance companies offer cosmetic and transplant surgery perks other companies offer day one claim perks.

The claim amount received by the policy holder depends on a few factors such as the type of insurance selected and the amount of income insured. Buyers can insure up to 75% of their annual income and in some cases an additional 8%. Before receiving the first payment from the insurance company, the policy holder has to wait for a few days and this is known as the cooling or waiting period. Since these policies are highly customizable, buyers can select the number of days or months they would like to wait. Buyers should note that they only have to wait before getting the first payment after filing a claim, and all future payments are processed on time.

There are primarily two types of income protection plans offered to people in Australia. Each plan has its own benefits, for instance indemnity plans are cost effective where as agreed value plans ensure that the policy holder receives a pre decided amount every month.

While buying income protection insurance buyers are given the option to either choose stepped premiums or levelled premiums. Usually buyers who want to opt for short term policies opt for stepped premiums since these premiums allow people to enjoy certain benefits such as low interest rates for the first few months or years. People who want to opt for long term policies usually prefer levelled premiums since these premiums allow them to pay a fixed amount until they reach the age of 65, after which they have to pay stepped premiums. In an attempt to encourage people to opt for selected plans, many insurance companies offer online rates and discounts. People who want to get cheap yet good policies should consider opting for these offers and comparing quotes before buying insurance.

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