Income protection for doctors, lawyers and executives
Income protection insurance product disclosure statements (PDS's) are often lengthy. They can take quite some time to read, and even more time to understand the jargon. However reading an income protection PDS does payoff, as there are a number of additional extras and offset clauses which may benefit your personal situation.
Built-in benefits: A non-offset clause
One such benefit for doctors, lawyers and executives is the maximum benefits payable non-offset clause. This clause may go under a variety of different names depending on which insurer you decide to go with, but the basic concept still remains the same as if you are a medical practitioner, legal practitioner or high earning executive, and cannot work due to illness or injury, under this clause you can still receive the full income protection benefit payment even if you are receiving a worker's compensation benefit.
However, generally if you hold an income protection policy and are not a medical practitioner, legal practitioner or high earning executive, then you can only usually receive a maximum benefit of 75%. Therefore your income protection will top up your worker's compensation benefit so that it equates to 75% of your income.
In essence, if you meet the definition of this clause as outlined in a PDS, you may be able to receive more money compared to policy that does not have this clause. It can give you the opportunity to recover and still maintain your lifestyle without worrying about the bills.
An example of the income protection non-offset clause
Mark is 37 years old and happily married to Susan, who he has three children with. Mark works as a doctor at a public hospital earning $110,000 per year, and is the sole provider for his family as Susan is a stay-at-home mum.
One day while Mark was checking on some patients, he slipped on some water falling backwards hurting his head and back. As a result, Mark was off work for two months taking additional time to recover from his accident.
Mark was able to make a worker's compensation claim of $2000, however thanks to his financial adviser Mark also had an income protection policy which had a non-offset clause for medical practitioners. After making a claim, Mark's life insurance company awarded him $6,875 per month in addition to his workers compensation payment. This ensured that Mark's lifestyle was not affected, and he could cover his mortgage repayments, household bills as well as provide for his wife and three children.
Who has this income protection non-offset clause?
There are a select number of insurers who have this clause in their PDS built into their standard income policies. If you work in any of the fields defined under this type of clause, it may be beneficial to look into policies that have this clause.
This clause may also vary slightly depending on if you select an agreed value policy, or an indemnity value policy.
Income protection specialists for doctors, lawyers and executives
If you would like to benefit from this type of clause, speak to an xLife adviser today. We can help you select the right type of policy, and help you decide whether an agreed or indemnity style policy will suit you. Get income protection quotes from us, and we can help you compare and choose the right policy for you.
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April 2011
