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Income Protection Insurance FAQ

How does income protection insurance help people? How many benefits are offered with these plans?
Insurance plans are designed to ensure that people get the help they need when they are in trouble. Income protection insurance plans protect families by providing compensation when the policy holder cannot work due to either sickness or injury. While basic plans offer 1 or 2 benefits better plans offer additional perks such as a death benefit, day one claim benefit and transplant or cosmetic surgery benefit.

How much can I insure myself for? What are the various types of plans offered?
Buyers have the option to insure themselves for up to 75% of their annual income. The compensation amount received by the buyer depends primarily on the type of contract selected. Agreed value contracts ensure that the policy holder receives a fixed compensation amount after he files a claim and this compensation amount is not affected by the buyer’s financial status at the time of filing the claim. The second type of contract offered is the indemnity contract.

Why are agreed value contracts slightly more expensive than indemnity contracts?
Agreed value contracts are considered better since in the case of indemnity contracts the policy holder’s financial status at the time of filing the claim affects the amount he receives from the insurance company. This implies that if the policy holder’s income has diminished while he files the claim then the policy holder will receive a lower compensation amount from the insurance company.

Are these plans customizable? What features can I customize?
The better policies that cost a little more than basic plans are flexible. Buyers who opt for flexible plans can choose the number of days they want to wait before getting the compensation amount, the tenure of the selected plan and the number of years they want to enjoy the provided benefits. While some insurance companies allow buyers to wait from 14 days to 2 years for the compensation amount, some insurance companies set restrictions and allow buyers to wait only for a certain number of days.

Will income protection insurance help me?
Income protection plans are beneficial to everyone however these plans are especially beneficial to people who have dependants, who earn more than $20,000 annually and who are the primary bread winners of the household. The right income protection plan can help you live without worrying even when a tragedy strikes


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Income protection is a crucial part of any comprehensive financial plan. If you’d like some help customising the correct policy for you, or want to know more about the income protection insurance benefits.