If you have been working and living in Australia for a long time, you should definitely think about buying an insurance policy. Most Australians buy various kinds of insurance to get coverage in case something unexpected happens. One type of insurance you can consider is income protection insurance in Australia.
Before going any further, knowing the definition of income protection insurance is a good idea. Gaining a clear understanding will allow you to take appropriate action more easily.
Definition Income Protection Insurance
For those of you with your first experience working and living in Australia, it is important to know about insurance products to get the right policy. Considering that working and living abroad has many challenges, avoid the risk of loss by choosing income protection insurance.
An income protection insurance policy will compensate you if you are absent from work. The reason for being absent from work could be illness, injury, or other serious circumstances that prevent you from working. That way, you will still receive income even if you don’t go to work.
As a result, finances remain safe, so your mind can be calmer and more relieved. You must also pay a premium while working when buying this insurance policy. However, this insurance is only valid until the maximum age is 65.
What to Consider When Buying an Insurance Policy?
To avoid choosing the wrong one, here are some considerations you need to know before buying income insurance protection.
1. Understand the Policy Terms
There are many income protection insurance in Australia that offer income protection. Well, you must be concerned about the policy they make. It is best not to just stick to one insurance service provider.
Look for many references first to compare and get an offer that suits your needs. An equally important consideration is knowing how much coverage you will receive if there is a claim.
You can go directly to the insurance office to get clearer information. Furthermore, insurance officers can also help you by giving the advice to get options that suit your condition.
2. Find out the Exclusions
Insurance companies have different exclusions besides having their own terms and conditions. This exclusion is closely related to the claim. For that reason, find out what exclusions are given. You can ask this question directly without hesitation. Typically, income protection insurance exclusions include the following:
- Involved in criminal acts.
- Suicide attempt.
- Consuming illegal drugs or alcohol.
The exclusions above are actions that are done alone and cause you to be unable to come to work.
3. Coverage Expenses
The coverage you will receive is determined by the monthly premium you pay. If you want substantial coverage when absent from work, the more expensive the premium you have to pay. However, if you don’t need much coverage, you should choose a monthly premium that suits your needs.
How to find out your coverage needs when buying income protection insurance in Australia? Now, calculate all mandatory monthly expenses as well as other expenses. As a result, you can get coverage that can cover your monthly needs.
4. Find Other Events Eligible for Claims
The points above have mentioned several provisions that can be claimed and which are exceptions. Discovering other things that might lead to a claim is also important.
For example, in the case of termination of employment on the company’s part or you decide to stop working. You can still have good finances if this event is still entitled to a claim.
5. Benefits and Waiting Periods
Submitting a coverage claim usually requires a waiting period. Whether the waiting period is long or short depends on the conditions stated in your policy. Usually, you need to wait 30, 60, or even 90 days to get the benefits of your submitted claim.
Interesting Benefits of Income Protection Insurance
After knowing some important things to consider in having income protection, you can also take a look at a number of interesting benefits as follows:
1. Getting Income Even When Not Working
Sometimes, you will experience unexpected things that prevent you from going to work normally. The reason could be due to health factors or natural conditions that make it impossible to leave the house.
Being absent from work for a while won’t be a problem for your financial health if you have purchased income protection insurance. This is because the income protection insurance company in Australia will cover up to 70% of your income.
2. Premiums That Can Reach Needs
Insurance companies will provide a variety of monthly premium choices. This allows anyone who needs income protection to find one that fits. This affordable premium fee will not burden the policyholder.
3. You Can Use Coverage for Family Expenses
Another interesting benefit of income protection insurance is using coverage claims for family expenses. For example, a family member is sick or has an accident and has to be hospitalized. This condition certainly requires you to take leave. You can make a claim for the leave to keep getting income.
4. Possibility of Getting Redundancy Coverage
If you frequently use credit cards redundantly or struggle with vehicle rental fees, mortgage, and personal loans, it may be more convenient to have income protection insurance.
These monthly expenses will usually be covered by insurance, but it also depends on the type of policy you choose. At least you can breathe a little easier when unemployed because your monthly expenses are still being paid.
Ready to protect yourself with income protection insurance in Australia?
To wrap things up, income protection insurance is important if you work in Australia, especially as a foreigner. You can avoid the risk of loss due to being absent from work because the insurance company will cover the compensation. Therefore, you can use the coverage to meet daily and monthly expenses.
After all, adjust the monthly premium with the coverage you need to get the right benefits and not burden your financial capabilities.