Ezicover Income Protection

Income protection insurance, sometimes known as income insurance, is designed to replace part of your income to make sure money is still coming in, even if you can't work. Generally, income protection insurance can provide you with up to 70 per cent of your regular income for a specified period of time – called the benefit period. The amount you receive each month is based on the income you earned over the previous 12 to 24 months.

In some circumstances - yes. If your policy sits outside of your super fund, you may be entitled. The Australian Taxation Office (ATO) states that if you take out a policy from an approved Australian provider, you can claim the cost of premiums you pay for insurance against the loss of your income. 

However, you should seek tax advice that is specific to your personal circumstances from a tax adviser or registered tax agent before assuming you will be able to make a tax deduction.

If you're forced to take time off work because of illness or injury, you may struggle to pay for everyday expenses such as your mortgage, rent, groceries or school fees. Income protection insurance provides you with regular payments to help meet these expenses.

You can increase or decrease your amount of cover at any time if your earnings rise or fall. To increase your income cover, you usually need to confirm:

• your occupation, employment status and number of hours worked each week
• your new income
• your health status

If you reduce your amount of cover, benefit period or increase your waiting period, you may not be able to reverse these at a later date.

If you need to make a claim, you must notify both your employer (unless you are self-employed) and your insurer as soon as possible as there are time limits around lodging a claim. Your insurer will send you the relevant forms, and if your claim is accepted, you will be paid monthly in arrears. Your claim will also be reviewed every month to determine your ongoing eligibility. This may include you needing to provide a doctor's report.

Being out of work for even a short period because of an accident or illness can have serious financial consequences, such as needing to sell the family home or having to take out loans to pay your bills. The monthly benefit an income protection insurance policy delivers can help you and your family stay afloat while you're out of action – and this can help you to return to normal life quicker.

You can adapt your policy to suit your individual circumstances. For example, you can choose to pay a higher premium, so your policy starts paying out after 30 days (if you're still unable to work), or opt to reduce your premiums by extending this period to up to 90 days. You can also select a policy that will pay a benefit for up to one, two or five years. The longer the payment period the higher the premium.

Income protection insurance pays part of your lost income if you're unable to work because of a disability caused by illness or injury. It can help pay the bills so you can focus on getting better.

This will depend on the insurer and type of income protection policy you take out. According to MoneySmart, most income protection policies offer a waiting period between 14 days and two years. You must be unable to work as a result of your illness or injury at the end of the waiting period to be eligible for payments.

This depends on several factors such as your age, job, current health and how long you want to receive benefits should you need to claim. To figure out how much protection you need add up monthly household expenses including debt repayments, groceries, bills, school fees and the like and you'll have an idea of how much you’ll need to be paid at claim time.

In general, most income protection policies offer benefit periods of two or five years, or up to a specific age. If you chose a longer benefit period, you will pay higher premiums but it also means you'll receive a monthly benefit for longer if you claim is approved.

Income protection insurance is exempt from GST in Australia, as it is classified as a financial service.

In general, you can claim as many times as you need to. It's important to check out the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) of the insurer to understand the finer details, and when you can and can't claim.

There are a couple of steps to take to cancel an income protection policy. Firstly, the person covered by the policy needs to contact their insurer informing them of the decision to cancel. Then the request must be made in writing, some insurers may need a particular form filled out. Submit all the relevant paperwork and the insurer will confirm once the policy is cancelled.