Income Protection – the devil is in the detail

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This month, Michelle Griffiths answers a great question about income protection insurance.


I recently read an article where someone was diagnosed with breast cancer and was not covered by her income protection insurance because she was only unable to work for 2 weeks (during the worst of her treatment process), the rest of her time with treatment was covered by her sick leave. Both myself and wife have income protection insurance and was wondering if we would be covered in similar circumstances?

 

What a great article – and what a great outcome that she recovered so quickly.

This can definitely happen but with the right advice can be avoided.

When submitting the claim, I would have asked the following question – Are you able to work as you normally would?

Most people would say that they can still work but not as much as normal as they have appointments with specialists, undergoing treatment and can be feeling exhausted because of the treatments.

I would have then suggested that she get a certificate from her doctor as to how much she was able to continue to work. Let’s say you were still able to work but only at 50% of normal capacity, then you would be able to claim the other 50% from your insurance.  I have a client who is on a claim now – they are physically quite good but not feeling “up to” working again and therefore there is the mental health element as well.

In the article, the insurance company would have asked if she can still work. If she said yes, they would not have pried further as to how much she could work.

This goes to show the value of an advisor who understand the finer details when it comes time to claim.

If you have any questions or would like to discuss more on income protection insurance, please contact us on 03 9886 0800 or via email.

 

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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2022. Please do not reproduce without the expressed written consent of the author.