“I have been unable to work for over two months now because of a health condition triggered by contracting Coronavirus. Can I access my income protection insurance?”
- Question from Amy in Melbourne, VIC
Top answer provided by:
I’m sorry to hear about your illness.
As a first step, I recommend contacting your insurance provider to verify whether they cover pandemics such as COVID and related illnesses. Some Life Insurance companies have an exclusion in place for these. Therefore, contacting your insurance provider to confirm their position on pandemics is important. If they do, then this would be treated like any other income protection claim and processed accordingly.
You should check the ‘waiting period’ on your income protection policy. The waiting period is the amount of time you would need to wait prior to receiving your first payment. If you have a fully underwritten insurance policy, this waiting period would have been determined at the time of application. If you have a default insurance policy, this will generally depend on the terms and conditions set out by the provider.
The ‘benefit period’ on your policy should also be confirmed. This is the maximum amount of time your benefit would be paid once approved.
Further, as a part of the claims process, the insurer would require your treating medical practitioner to complete a form and a declaration confirming that you are not fit for work due to an underlying health condition. The medical practitioner would also need to give an indication on when the condition started and a ‘likely return to work’ date. Therefore, making your medical practitioner aware of this is important to ensure the claim is processed in a timely manner. Your insurer may require you to provide financial statements for the last 12-24 months (i.e., payslips, tax returns).
If your income protection policy is through super, you will also need to meet the temporary incapacity condition of release under superannuation law before the trustee can release the benefit. Payments may be delayed as benefits must generally be paid by the insurer to the trustee.
Whether you would be able to claim successfully would also depend on whether it is a pre-existing condition that was triggered by COVID. If it is a pre-existing condition that was disclosed at the application stage (i.e., an underwritten insurance policy), and if the insurer agreed to cover this condition the claim can be lodged successfully. However, if the insurer was unaware of this pre-existing condition (i.e., default cover) it may not be covered.
I recommend contacting your insurer to confirm their position on pandemics and to get a better understanding of all the features of your income protection policy before lodging the claim. Also, as mentioned above, ensure that your medical practitioner is informed of the process in advance.
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