Minimum Working Hours for Income Protection

Income protection insurance provides you with vitial protection. To be eligible for income protection you must meet the minimum working requirements, this will differ from company to company in the ranges of 20-25 hours of work per week. Some companies may also take into account how many weeks per year you work. 

The reason for this minimum requirement comes down to company claim experience, and peoples incentive to return to work. With income protection you are able to protect 75% of your income, which in itself gives an incentive to return to work as when on claim your income is reduced. For people working under 20 hours per week the dollar value reduction in their income may not provide a great enough incentive for people to return to work.

Furthermore the insurance companies have to have a limit somewhere, they could not offer an income protection policy for someone working 8 hours per week without a significant adminstrative burdeon when it came to any claims. 

So the decision to put a minimum working hours requirement comes down to the following:

• They have to set a limit at some point otherwise they would be offering policies to people that work just a couple of hours per week
• The limits are set by individual companies and are based on their claims experience
• The companies do not want to increase the premiums for all people to cover the adiminstrative expense of offering small policies