Income protection insurance provides cover for income lost due to the inability to work as a result of sickness or injury. It pays the life insured a regular income stream either fortnightly or monthly depending on the policy provisions, rather than as a lump sum. The amount payable varies upon individual and occupation, however as a general rule, up to 75.00% of pre-disability income may be covered.
Polices also have both a waiting period (how long you need to wait before being paid) and a benefit period (how long you will be paid for).
Waiting periods can range from 14 days to 2 years. The waiting period will directly impact that premium payable, and this should be taken into consideration when selecting an appropriate policy.
Benefit periods also vary and may be 2 years, 5 years or even up to age 70. It is important to note that the benefit period sets the maximum period for benefits to be paid. If you are on claim and you recover and go back to work, your payments will reduce or cease.