Protection Insurance
Protection Insurance
Income Protection - Critical Illness - Accident, Sickness and Unemployment - Family Income Benefit

Income Protection
What it does – This type of policy pays a monthly income tax free if you are unable to work due to an illness or injury.  

How it works – The monthly income under the policy will usually be between 50 and 70 per cent of your salary and will be paid until you are fit enough to return to work or reach retirement age.

What you need to know – State benefits aren’t generous and few employers will continue to support their staff through a long illness, so income protection policies can help families through difficult financial times. You can choose the date at which the policy would pay-out in the event of a claim. This can range from a month to up to a year. Policies that pay-out sooner will have higher premiums.*

Critical Illness
What it does – Critical illness cover pays out a tax-free lump sum if you are diagnosed with a major illness, including cancer and heart disease. Actual illnesses covered in a policy may vary between providers. 

How it works – Many insurers will make a part payment on an early-stage diagnosis of a condition specified in the policy, the percentage will vary from company to company.

What you need to know – Many people buy a combined life and critical illness policy, and it makes sense to do so. In this case, a payment would be made on either diagnosis of a critical illness as defined in the policy, or death, whichever is the sooner. If the cover is combined in this way, the policy premium is usually cheaper than it would be for separate policies, as there is only ever one lump sum paid out by the insurance company.*

Accident, Sickness and Unemployment
What it does – This policy provides cover so that if you are unable to work because you’re injured or sick, or through no fault of your own, you have lost your job.

How it works – In the event of a claim, you will receive a predetermined percentage of your monthly income, usually for a period of up to 12 months. Payments are made after a waiting period of at least a month. If you choose a longer waiting period, your premiums are likely to be lower.

What you need to know – Accident, sickness and unemployment cover differs from mortgage payment protection which is designed specifically to cover your repayments on a specific debt such as your mortgage. It differs from income protection insurance in that it includes unemployment cover.*

Family Income Benefit
What it does – Family income benefit policies work in a similar way to ordinary life cover, but instead of a lump sum, the policy pays out a regular income if you die.

How it works – A typical policy might be taken out by the parents of young children, so that if one parent were to die during the term of the policy, then an income would be paid out for a predetermined period of time. So, if you had a 20-year policy and were to die five years into it, then the policy would payout a regular income for the remaining 15 years.

What you need to know – Family income benefit insurance is a simple way to provide your family with an ongoing income rather than a lump sum if you were to die. Critical illness can also be added that would provide a payout if one of the parents were to be diagnosed with a serious illness.*

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