Income Protection
don't be fooled by cheap income protection policies - you may not get what you need at the right time.
General Insurance
Where you purchase say $1,000 per week cover for sickness and/or accident for 1 to two years only. This is a cancellable policy. If you claim on the policy the insurance company will generally cancel the policy after the first claim leaving you with no cover after two years.
Salary Continuance Insurance
This is generally offered through your superannuation fund. This type of cover should only ever be viewed as a ‘safety net’ as it typically covers 75% of your base salary only and in very limited circumstances. In most cases you would need to be totally and permanently disabled to claim and then cover is only for a limited benefit period of 2 years (in the case of Q Super). In addition if you leave you have no cover at all. Meeting the definition of totally and permanent disabled is only half the problem with this type of cover, the biggest issue is that is only on base salary and most medical professionals earn more than 30% of their income from other penalties etc. and in addition does not cover you for your ‘own occupation’ so if they deem you can do a lesser job and not your own occupation you have no cover.
Group Salary Continuance
Arranged by small employer groups of ten or more directly with an Insurance company for the benefit of staff – this type of cover can be increased to pay a benefit until age 65 and can, in some circumstances be transferred to a personal policy if you leave. You can insure your own occupation, premiums can be tax deductible and although a more limited style of cover is available it is preferable to 1 and 2 above.
Permanent Insurance Cover
This is where you submit your personal information for assessment to take out a ‘non-cancellable’ policy with a registered insurance company. The policy can ONLY be cancelled by you or by non-payment of premiums. This type of cover provides both partial and total disability cover 24/7 worldwide. It also increases with CPI if you are on claim for long periods and we only recommend ‘OWN OCCUPATION’ cover.
If you leave your work place you take your cover with you and are in control of it no matter where you are. There are many, many other reasons why this is the preferred type of income replacement insurance for professionals. If you have the choice why would you settle for the weakest type of cover on your most valuable asset, your income?
Any benefit from QSuper is offset against permanent insurance policies and that is why we use a 90 day waiting period because you may get a month or two from QSuper but not at the full pay rate. A correctly structured permanent policy would provide comprehensive salary cover whether you are partially or totally disabled after 90 days and pay up to age 65 indexed for inflation if you cannot perform your own occupation. It is generally tax deductible too.
We recommend permanent comprehensive insurance as our preferred and first option. If you cannot afford or have health issues that prevent or limit the cover you can obtain we will work out the best solution using the options available to you. You can rely on the value of our years of experience in providing suitable risk management options and advice.
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