Copyright © 2014 Kerrie Peacock
Income Protection insurance helps to safeguard your regular flow of income. The benefit of this cover would be appreciated when you’re unable to work due to illness or injury. Such a cover is critically important, especially since Safe Work Australia records that 638,400 workers incurred work-related injuries in 2009-10.
Income protection insurance comparison is necessary before buying cover from an insurance company. Each insurer provides a unique set of features that includes some extras.
I. Guaranteed Future Insurability
A “Guaranteed Future Insurability” helps you in increasing your cover. With this feature, you can increase the sum insured without undergoing further medical underwriting.
When buying income protection cover, you should consider whether this feature is available, especially if you anticipate a future increase in your income. However, guaranteed future insurability is generally unavailable to self-employed persons – only employees qualify for this benefit. Notable insurers that offer this feature include AMP and AIA Australia.
II. Rehabilitation Costs Feature
Your income protection policy may offer extra features to help in the rehabilitation process following an injury or illness. These rehabilitation costs would involve buying wheelchairs, making modifications to your home and/ or car, as well as rehabilitation program fees.
To qualify for rehabilitation costs feature, you would have to strictly participate in approved rehabilitation programs. Such rehabilitation programs would have an average cost of $1,360 (based on a 2001/2002 Return to Work Monitor, by the Heads of Workplace Safety and Compensation Authorities).
Generally, a policy holder would receive amounts up to 12 times the monthly benefit to cater for rehabilitation costs. Various insurers offering this extra feature include: AMP, AIA Australia and CommInsure.
Such a rehabilitation costs feature is quite useful in helping injured workers return to work. In fact, a research by the Chamber of Commerce and Industry of Western Australia, revealed that utilizing vocational rehabilitation in assisting injured employees return to their jobs, led to an increase in return-to-work rates from a low margin of 59% during 1993/94 to 64% during 1994/95.
III. Family Support Benefit
Some insurance companies offer this extra benefit within an income protection policy. This applies in case an immediate family member has to take time off work, so as to take care of the policy holder. In this instance, an insurer would subsidize the lost income of that particular family member. Such a subsidy is quite useful, especially since the Australian Institute of Health and Welfare (AIHW) records that in 2003, approximately 65% of Australians aged below 65 years and in need of help with mobility, communication or self-care, received informal assistance only (assistance from family and/ or friends).
This subsidy would normally last for a maximum period of 3 months. It would also only apply if the family member was initially in full-time employment and the policy holder has experienced total disability. CommInsure and AMP are two insurance companies offering such an extra benefit.
The family support benefit generally also includes accommodation benefit. This caters for the accommodation costs incurred by an immediate family member who travels to be near you (the policy holder) during the period of total disability. Such a benefit applies if you’re forced to stay far from home due to your disability.
IV. Career’s Allowance
Career’s allowance bears the same concept as the family support benefit. However, it applies in cases where a policy holder’s child falls ill. Generally, this benefit would provide a maximum of 25% of your income protection benefit, if you’re forced to take time off work and care for your child. AIA Australia is one such insurer offering this benefit.
Kerrie Peacock regularly researches the available products within the Australian personal insurance industry. Visit http://www.mecovered.com.au/income-protection-insurance-comparison for more information on personal insurance.