Life Insurance
Comparing income protection policies
1 October 2021
You can have the best laid plans. But if the COVID-19 pandemic has taught us anything, it’s that even the best laid plans can sometimes go out of the window. That’s where income protection can come in handy. It offers some financial support if you have to stop working for a prolonged period due to injury or illness.
Whether you’re the sole income earner in the family or not, being unable to work due to an unexpected illness or injury can happen without warning. Suddenly losing that income stream can add to the stress of how to pay your bills, while trying to recover at the same time.
But, with so many income protection policies out there, how do you choose the one that’s right for you? In this article, Suncorp Life outlines some of the factors to keep an eye out for when doing your research. Here’s what you might want to consider when you’re in the market looking for income protection insurance.
Benefit period – and how it affects your premium
The time frame of how long you will receive payments for once your claim is successful is called the benefit period. For example, if the benefit period you nominate is two years, then your payments will continue for up to a maximum of two years once they kick in, unless you are able to return to work before the end of your benefit period. It’s can be one of the most important factors to consider because the benefit period you nominate will directly impact the cost of the premiums you pay. Suncorp Income Protection has flexible benefit periods for you to choose from – between 6 months up to 5 years – so you’re in control for how long you want to be covered for depending on your lifestyle.
One thing to keep in mind when selecting a benefit period is that you don’t want to end up in a situation where you’ve still not recovered to resume work, but your nominated benefit period has finished and you no longer receive benefit payments or have an alternate source of income. However, the longer your nominated benefit period is, usually the higher your premiums would be.
Waiting period – and how it affects your premium
The number of days you need to wait before the first benefit amount comes in while you’re seriously ill or injured is called the waiting period. The good thing with Suncorp Income Protection is that, just like the benefit period, the waiting period is also flexible. You get to choose the waiting period – anywhere between 14 and 90 days.
Typically, a longer waiting period can help reduce the premiums you pay. However, it’s worth thinking about your personal situation, financial obligations, and whether you will have sufficient savings to tide you over during a longer waiting period.
Does my age affect my premium?
Yes. Usually the younger you are, the lower your premiums would be. Most providers also typically have an age limit beyond which you might not be covered. However, this can be different based on which policy and provider you end up choosing. To avoid any confusion, it’s best to consult the relevant PDS before making any decision.
Will my profession impact my premiums?
Yes. The type of job you do and how much risk it involves can have an impact on the premiums you end up paying. For example, if you work on a construction site, you might be paying higher premiums than someone who is confined to desk job. This is because at a construction site, there is inherently more risk to injure oneself than in an indoor office. Generally, the higher the risk involved, the higher the premiums.
Choosing income protection insurance that’s right for you
It’s important to remember that there’s no ‘one size fits all’ approach. If you’re tossing up which income protection insurance to go for, be meticulous with your research, read the PDS and make an informed decision about which policy would best suit your lifestyle and life stage.
If you need assistance deciding what level of income protection is right for you at your current life stage, you can get a quote online or get in touch with the Suncorp Life team today on 13 11 55.
Read more:
- How income protection can help you and your family in tough times
- What you need to know about life insurance & income protection
- When is the best time to get income protection?
Suncorp Life Insurance products, other than in some circumstances the Redundancy Benefit, is provided by TAL Life Limited ABN 70 050 109 450 AFSL 237848 (TAL Life) which is part of the TAL Dai-ichi Life Australia Pty Limited ABN 97 150 070 483 group of companies (TAL). TAL is not part of the Suncorp Group. TAL uses the Suncorp brand (part of the Suncorp Group) under license. Any advice on this page in connection with the Life products is general in nature and is provided by Platform Ventures Pty Ltd ABN 35 626 745 177 AFS Representative Number 001266101 (PV). PV is part of the Suncorp Group and an authorised representative of TAL Direct Pty Limited ABN 39 084 666 017, AFSL 243260 (TAL Direct). General advice does not take into account your individual needs, objectives or financial situation. Before you decide to buy or to continue to hold a Life Products you must read the relevant Product Disclosure Statement. The Target Market Determination (TMD) for the product is available on our website.
