An income protection (IP) insurance policy covers your income if you are not able to work due to a medical condition. These benefits can be obtained from a specialised insurer, your bank and sometimes through superannuation.
IP will cover you for about 75% of your pre-injury salary although it can be terminated if the same insurer has paid you a TPD benefit.
Terms of an IP policy will largely vary although the insurer will only decide to make IP payments to you only after they determine that you are unable to perform your "own occupation" or "any occupation" which is reasonably suited to by way of your training, education or experience. This will turn on the particular policy.
Some IP policies may have an offset clause. This means that if you are receiving Workers Compensation or Centrelink benefits your IP payments will be reduced and careful consideration must be had before making a claim.
Before entering into an IP policy, it is a regular requirement that you will need to complete a questionnaire, particularly before entering a retail policy. When making a claim an insurer can elect to avoid making payments on the basis that you failed to disclose prior health problems. This argument will be readily put forward particularly when making a claim in respect of a psychological condition.
At times you will not be able to obtain a copy of the policy and you might not be aware of the terms and conditions, unaware as to why your claim has denied.
Making this type of claim can be difficult and our team at Carroll & O'Dea Lawyers are always happy and willing to assist.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.