“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:
Thanks for your question about income protection. The simple and most common answer in this situation is “it depends”.
What does it depend on?
Whether you can claim on your Income Protection policy or not depends entirely on the wording and options of your income protection policy. Ideally, Income Protection is designed to pay you the benefit amount (but no greater than 75% of your pre-illness income) each month when you are either injured or ill.
Most income protection policies have 2 main periods that you need to concern yourself with.
The first is the waiting period. This is the period that you must be off work due to sickness or injury before payments will start. Usually, it doesn’t matter when you claim, just the period that you didn’t work for.
Your waiting period will either have been chosen automatically for you, or you may have had a choice when taking the policy out. The longer the waiting period, the cheaper the policy is. The waiting periods vary from as short as 14 days and as long as 2 years or even 5 years. The most common waiting period is 30 days, however, due to the rise in costs many automatic superannuation based income protection policies now have a 90-day waiting period.
The second period that you need to concern yourself with is the benefit period. This is how long the payments will continue once you are on claim. This has traditionally ranged from as short as 2 years and as long as “to age 65”.
The second part of your question relates to the type of illness you have, namely coronavirus. To the best of my knowledge, no income protection policies in Australia have an epidemic or pandemic exclusion. Therefore, if you meet the other requirements of the policy you will be able to make a claim.
My general advice would be if you have been out of work due to illness for longer than your waiting period you should look at lodging a claim on your income protection. The majority of life insurance companies have very well structured claims processes for you to walk through. However, if your claim is likely to be complex, or you don’t feel capable of following each and every step of a claim, then you should seek advice on how to move forward. It is amazing how much easier a claim can go if you have a middle person to buffer the workload and questions.
Please note you will most likely still need to provide access to your medical records to assist the life company in processing your claim.
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