Is there any cross over?
There can be perceived cross over, so its important to educate yourself and use experts to guide you, particularly in these instances such as Income Protection vs Accident & Illness as well as Business Interruption v’s Keyman or Business Overheads
This is because the policies do have similarities in when a claim would occur.
Accident & Illness - Helen
Personal Accident / Illness policies are issued by general insurance companies and may be cancelled by the insurer due to changes in occupation / health circumstances or in the event of a bad claims history. Policy weekly benefits are normally paid for between 12 months to 2 years. Waiting excess periods are generally 7 to 14 days. Note this policy can be extended to include Accidental Death and Disablement paid as a lump sum.
Income Protection Insurance - George
Non-Cancellable Income Protection policies are issued by Life Insurance Companies and are not subject to GST. This type of policy cannot be cancelled by the insurer except due to non-payment of the premium. This cover is mainly available to white-collar occupations or qualified trades persons.
Benefit payment periods are usually greater than 2 years, eg. through to Age 65, meaning you could potential be on claim for 20 years or more.
When comparing the two types of policy you should be aware that the Income Protection (1 above) has superior ancillary benefits and premiums are able to be paid annually or monthly. Another consideration is that Income Protection premiums increase with age. It is important when stating incomes that they are net of business expenses as the net income is used to calculate your insured benefit. It is important to review your level of cover on a regular basis.
What else can be confused for the same policy?
Business Interruption (Helen/General) Vs Keyman Insurance or Business Overheads (George/Personal) as the policies do have some similarities in when a claim would occur.
Business interruption would be claimed following a property loss, say fire/flood affected. Business overheads insurance would come in to when the life insured is unable to work due to illness, injury or medical condition. The insurance then pays a monthly benefit to the business for a 12 month period to cover all the overheads of the business including rent, employees, vehicle and equipment leases and even a replacement for yourself so your business can maintain its health and momentum while you recover. This policy can be held in addition to your personal income protection, Disability and Trauma insurances.
How do I figure it out?
If you’re not sure what you need, talk to Helen or George, they’ll arrange to meet with you either together or separately depending on how complex you are, and put the most suitable cover in place for you. When it comes to making tough decisions about where you spend your money and what you need, it comes down to understanding your risks and concerns, your budget and helping you devise a strategy that gives you peace of mind without breaking the bank. As we deal with claims, we can help guide you and provide explanations on what covers your business or you personally need to consider.
General Insurance advice is made on behalf of Wilson General Insurance Pty Ltd (ABN 80 648 713 320) as an authorised representative of Ausure Pty Ltd ABN 94 096 971 854 AFSL 238433