Insurers Drop Income Protection Premiums

Insurers have dropped income protection premiums by between 15 % and 20 % during the past three years (1). Along with the tax deductibility of income protection, guarding your salary from sickness or accidents has never looked better.

So if you are one of the 69% of Australian's who don't have income protection insurance yet (2), now maybe a great opportunity to cash in on the vast improvements made to income protection cover over the years.

Income protection insurance improvements

1. Long term income protection through to age 65 - income protection benefit periods used to only last either 2 or 5 years, though now with the extended period until age 65 long term coverage is now an option.

2. Better disability definitions - some top notch insurers now offer far better disability definitions than was offered in the past. Look out for insurers who offer good disability definitions or a 'tiered disability definition'. These can maximise your benefit payment at claim time.

3. Premium waivers - these range from multi-policy premium waivers where if you hold more than one policy with the same insurer your premiums may be waived if on claim; to things like pregnancy premium waivers. These waivers will be outlined in your PDS, however if you are unsure speak to an xLife adviser.

4. Better benefits for those in specific industries or jobs - some jobs or industries may offer better claim benefits at extra or no additional cost depending on your policy and your occupation. An example of this is the 'scheduled injury benefit' for trades & construction workers, or the 'non-offset clause' for doctors, lawyers and high earning executives.

5. Improved income protection definitions for the self employed - insurers understand that the income of small business owners and the self employed fluctuate. Some insurers have taken this into account and may calculate your income based on your best 12 consecutive months during the past 3 years for an indemnity style policy. This new option can help maxmise your benefit payment at claim time.

Getting more value from your income protection policy

The improvements to income protection insurance are a great incentive for all Australians to take a serious look at their situation and make the most of what insurers have to offer.

However to get the most from your income protection policy you should consider comparing policies, and then reviewing your policy annually. Doing this helps ensure your level of cover is adequate come claim time, and that you are able to take advantage of any future policy improvements and upgrades.

Sources:
1. SMH, Protection For Your Cash Flow, 08/06/2011
2. Life Wise 2011

Exclusive Offer! Call xLife on 1300 135 205 today and
save up to 20% on your first year's income protection premium.

November 2011