Insurance Quotes AU

insurance quotes


Home >> How to Choose the Best Income Protection Policy

How to Choose the Best Income Protection Policy

Income protection insurance is one of the most beneficial types of insurance available in Australia since this type of insurance ensures that policy holders do not have to worry about money when they fall ill or get injured and cannot work. There are various factors to consider while choosing income protection covers, such as the tenure of the policy, the type of contract, the waiting period, the cost and the benefit period of the policy.

While selecting an income protection policy, the buyer should remember that the best policies have a cut off age of 75 years, while cheaper policies have a cut off age of 50 – 65 years. Buyers should select a policy that not only has a higher cut off age but also a policy that offers them maximum tenure with the best benefits. Short term policies that have a tenure of up to 10 years are ideal for buyers who are more than 50 years old and long term policies that have a tenure of 15 of more years are ideal for people who are 20 years – 50 years old. This however, is just a guideline, and people should choose the tenure depending on their own requirements.

The waiting period is another important factor that must be taken into consideration while choosing a policy. Good policies have a waiting period of 3 months or lesser where as cheaper policies have a waiting period of 6 months or more.

The type of contract is one of the most important factors that should be considered before deciding which policy is ideal for you. Indemnity contracts are cheaper than agreed value contracts but buyers who select indemnity contracts should note that if their income reduces while they file a claim, then they will receive a reduced amount as compensation. However, in the case of an agreed value contract, the payout amount is decided in the beginning and even if the policy holder’s income reduces later on, the payout amount is not affected.

The benefit period and the benefits offered are usually the deciding factors. Good income protection insurance policies offer a longer benefit period such as 2-5 years and good policies also offer additional benefits that are not limited to cosmetic surgery benefits, day one claim benefit and also a death benefit for the policy holder. Some insurance companies also offer transplant surgery benefits for the policy holder if he opts for a better policy.

  Income Protection Quotes

© 2011. All rights reserved.