Common Extra Benefits on Income Protection

There are benefits which come at an additional cost on income protection plans which most insurance companies offer. These benefits should be something to consider when choosing your income protection plan as they may be that additional cost which you were looking for and wanting to get out of your income protection plan:

Claims Escalation Option

The claims escalation extra benefit means that each year the amount insured, will increase with Consumer Price Index (CPI or also known as inflation).

As your income is going to increase each year from your employer with inflation, it is assumed that you would want your income protection plan to reflect this. This option is designed to reflect these increases.

At Lifebroker, the claims escalation option for income protection is quoted as standard. The reason for this is because generally income protection plans are taken out with intentions to keep for a long period of time; therefore we think that this option is required. For example, if you did not have this option and took out an income protection plan 10 years ago when your income was lower and you needed to make a claim today, the insurance company would pay you of your income 10 years ago (amount insured) which means that since then you would have had a higher income due to the increase with CPI but your income protection plan would not have reflected this.

Day 1 Accident Benefit

Day 1 Accident extra benefit comes at an additional cost. It is an option only available if you select either a 14 or 30 day waiting period.

The day 1 accident extra benefit means that if you needed to make a claim straight away and the reason for the claim was due to an accident then you would have to wait 30 days for a claim to be paid.  However the insurance company would back pay the 30 days at the end of the month and you would receive the benefit for the time that you have waited.

For example, a client which our dedicated claims team assisted through a claim had this option on his income protection plan. He was a builder and during work, he was involved in an accident at work where he fell off a ladder and had a back injury which he needed to be off work for the next six months to recover. Because he had the ‘day 1 accident’ extra benefits on his income protection plan, he needed some kind of income straight away. He did have to wait 30 days before receiving the first monthly installment from the insurance company; however he was back-paid for the waiting period therefore resulting in it being waived. If he did not have this option, it would mean that he would have to wait 30 days to make a claim (as this was the waiting period he had on his plan), and then an additional 30 days to receive the first monthly installment from the insurance company. The reason for this is because insurance companies pay the monthly benefit in arrears as it would be too much risk paying an individual the monthly installment at the start of the month in case they return to work without the insurance companies knowledge and receive income.

At Lifebroker, we do not quote this as a standard and not all of the insurance companies offer this additional cost extra benefit on their income protection plans, however ask your friendly adviser at Lifebroker for a quote and question to which insurance companies offer this benefit.

Business Expenses Benefit

The business expense benefit is an extra benefit which comes at an extra cost. It is designed for people who are self employed and want to ensure that fixed expenses of their business or practise will still be paid even if they can not work due to accident, injury or illness.

If you are a self employed person in an alone business, working director or within partnership then this option may be available to you. You would need to speak to the advisers at Lifebroker to determine whether or not the income protection business expenses extra benefit is an option for you.

At Lifebroker, we do not quote this as a standard and not all of the insurance companies offer this additional cost extra benefit on their income protection plans, however ask your friendly adviser at Lifebroker for a quote and question to which insurance companies offer this benefit.

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