The Importance Of Tailored Income Protection Insurance Solutions
In an online world, getting access to insurance products couldn’t be easier. Simply hop on the net, maybe check out some of the comparison websites, choose an insurer and a policy and away you go. But with something as important as income protection insurance, how do you really know that you are getting cover that will adequately meet your needs, from a reliable insurer that will pay you a benefit in the event of temporary disablement?
“What should I consider for a tailored income protection insurance policy?”.
The first thing to consider are your personal circumstances. Factors that impact on income protection cover premiums include your age, your gender, what occupation you have, your employment status and your lifestyle choices, such as smoking.
A tailored insurance policy should provide you with a more meaningful set of benefits that better meet your personal circumstances, offering the best possible outcome if you end up in a position that requires you to claim.
Tailored insurance solutions can offer greater flexibility for most insurance factors, including the benefit period, the waiting period, coverage for self-employment, the range of occupation categories covered, options for indexation of claim benefits, removal of limitations on cover and elected/specified monthly benefit amounts.
For example, your occupation is more manual meaning the time it takes for you to return to work after an injury is longer and/or smaller injuries which may not stop an office worker continuing to work, may stop you. You would elect a shorter waiting period (e.g. 14 days) whereas the office worker may decide to elect a longer waiting period (e.g. 60 days).
The tailoring of your policy also impacts the pricing. The higher the amount of income you’re insured for, the shortness of the waiting period and the longer the benefit period all push up the price. However, by tailoring your policy you can elect for some of these areas to be lesser and therefore the policy is more cost-effective overall.
That said, you should not elect a level of cover that is inadequate simply to reduce your costs. That relatively small saving of money on premium will count for very little when the time comes to make a claim.
Getting the right policy cover is essential. Comparison website Canstar estimates that the average monthly basic costs of living are about $3,700.
That’s before any luxuries are taken account of. However, if your mortgage and other outgoings are greater than that, you don’t have the savings in place to cover yourself and your insurance policy isn’t adequate, you could find yourself in financial distress.
You need to be able to focus on getting well again. Financial stress will not be at all helpful in this situation.
You should be asking yourself some of the following questions before finalising your income protection cover.
- Are my circumstances covered by a generic policy or do I need to tailor it?
- Have I thought through all of the specific circumstances that influence my policy coverage?
- Do I know other people with similar circumstances to mine who I can talk to?
Once you’ve made the decision to proceed with income protection insurance, you need to make sure it’s right for you