Sunday, August 24, 2014
Income protection insurance is meant to cover you should you be unable to work due to an illness or injury. This policy covers you for a specified period of time. In the case of involuntary redundancy, not many insurance companies in Australia offer income protection cover. There are, however, some general insurance companies that have come up with a short term cover of up to 3 months for involuntary redundancy. It is worth noting that life insurance companies are not allowed by Australian law to provide redundancy cover. Features The involuntary unemployment cover comes to effect if you become suddenly unemployed. This payment will temporarily enable you to pay for bills, mortgage, children's education and medical bills while you seek for new employment. How To Get Cover There is a process you need to follow to successfully apply for income protection insurance. Redundancy that is involuntary can be covered through an income protection policy that can be tailored to suit your lifestyle and health. It is important to note that if you have a healthy lifestyle, you are considered less risky and would therefore enjoy lower premiums. Monthly Cover The cover amount you can get depends on various factors including the number of hours you work per week and the type of employment - whether full time or part time. You can get a fixed or tailored income insurance protection. Redundancy cover is normally limited to a fixed amount, which could be a maximum of 3000 dollars a month for 3 months. This is normally provided if you are employed full-time and work for a minimum of 30 hours per week. Waiting Period The waiting period is the amount of time you will have to wait before the benefits are paid out to you in the event that you are made redundant. You are given the option of selecting a waiting period of 14 days, 28 days, 60 days or even 90 days. The longer your waiting period, the lower the cost of your insurance cover. Benefit Period Once you are made redundant, the benefit period is the maximum period of time in which you will receive the benefit amount. You can choose a benefit period of 6, 12 or 24 months, while some policies will allow you a benefit period of up to 5 years for general income protection insurance. Redundancy, however, is treated differently as you can only claim up to 3000 dollars for a maximum of 3 months in most cases. Other Benefits In case you are made redundant and are receiving other payments like unemployment benefits, the insurance company will adjust your payment only if you are receiving more than 85 per cent of your monthly pretax income. Claims In order to make a claim, you need to notify your insurance provider immediately you are made redundant. You will then be expected to fill in a claim form and send it to the insurance company. The claim form is normally sent with other supporting documents which may include proof of income. Using the documents you will have provided, the insurance company will make a decision and contact you with the outcome of your application. Copyright (c) 2014 Kerrie Peacock


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