What is income protection insurance?
Income protection insurance pays you a benefit if you are unable to work for a period of time because of illness or injury. This insures you for a set level of income and will pay you until you can return to work or for the agreed period – whichever is sooner.
Income protection insurance is not to be confused with redundancy insurance, which offers limited financial protection in the case of involuntary redundancy.
How Canstar compares income protection insurance
Every year, Canstar researches and rates income protection that is available either direct from an insurer or through your financial adviser. Whichever you choose, there are some common things you should compare in a direct income protection policy or an advised income protection policy:
- A reasonably high sum insured – the amount of benefit you could claim
- A reasonably short waiting period – the time you wait before you can claim after buying the policy
- A reasonably long benefit period (claim period) – the length of time you can continue to claim benefits
- A partial disability benefit
- A recurrent disability benefit
- A specified injury or illness benefit
- No exclusion on your pre-existing conditions
- An affordable insurance premium
Since things like waiting periods and benefit periods vary so much from insurer to insurer, it’s important to compare your options on the Canstar website and choose the insurance provider that gives the best value for your needs.
Keep in mind that the level of cover you have and the different features of your policy will make the insurance premiums more or less expensive. That’s why Canstar also compares insurance on price.