Benefit Period and Waiting Period of Income Protection

With income protection you are able to tailor the policy through adjusting the Waiting Period and Benefit Period to suit your personal circumstances.

Income Protection Benefit Period

The benefit period is as the name suggests, is how long in the event of a claim you will be paid benefits. This can be 1 year, 2 years, 5 years or to a specific age, e.g. age 60 or age 65. When determining the benefit period that suits you, consider:

• The longer the Benefit Period the higher the premium, as there is the potential for a long term claim
• Ideally when taking our income protection is finances permit, you should take as long a benefit period as possible to protect you in the event of long term disablement.

Income Protection Waiting Period

This determines how long you are unable to work beofore the policy begins paying you the monthly benefit. The waiting period can usually be choosen from 14, 30, 60, 90, 180, 360 and 720 days. For example, with a 30 day waiting period you would begin receiving payments after 31 days.Other considerations with the waiting period are:

• Income Protection should be there to protect you for the long term, not for 2 weeks that you might be off work, and by changing a waiting period from 14 days to 30 days can sometime half the premiums
• Remember that if you cannot work you will have sick leave, be able to use any accumulated annual leave and potentially long service leave before income proteciton would need to kick in
• The longer the waiting period chosen, the lower the premiums
• Many companies can offer an Accident Benefit - which will waive the waiting periods in the event of an accident (this will attract an additional premium)
• The waiting period should not be confused about when the insurance starts - this relates to Health Insurance

See also: Agreed Value or Indemnity Value