Planning for the worst can be unpleasant when thinking ahead about your life. The prospect of being unable to work due to illness or injury can be frightening, but an  income protection policy  can help you feel more secure. Many people, however, are concerned that even an insurance policy won’t provide them with the protection they need.

Whether they’re worried about being rejected when claiming or that they won’t be covered for what they need, many people delay a decision and end up neglecting to buy income protection insurance.

Making a claim can be super simple as its designed to be easy for you during a stressful time. We’ll walk you through how the income protection policy works and how claims are processed, so you’re ready!


How does Income Protection Insurance work?

When you can’t work due to an illness or injury, income protection protects you.  Income Protection replaces a percentage of your salary (up to 85%) in monthly instalments. Your payments continue until you return to work, retire, or the policy term ends and you stop paying premiums.

Referral periods are included in the policies. This is the time between being unable to work and receiving your first benefit payout. Premiums are cheaper with a longer deferral period. You can set a small deferral period (usually 14-days) or a larger one if that suits you better.


Income Protection Claims

When you cannot work due to an injury or illness, it can be a difficult and uncertain time. A claim under your income protection online policy is a a monthly benefit payment after becoming temporarily unable to work . If you believe you may be eligible to claim an Income Protection benefit, three steps are to be followed for you to submit an Income Protection claim:

  • Contact your insurance provider
  • Provide the necessary information
  • Complete and return your Income Protection claim form


Income protection claims with partial incapacity

It is still possible to claim benefits under most income protection policies even if you are partially disabled.


What is partial incapacity?

Insurance companies can define partial incapacity differently, so you should carefully read the Product Disclosure Statement to see how your policy defines it.

In general, you must be disabled for a certain number of days before being able to return to work with a reduced capacity to be eligible for a partial incapacity benefit.

Benefits will supplement your income if you are eligible to claim them because of your reduced work capacity.


How do Income protection claims and partial incapacity work?

You may receive partial incapacity benefits based on a variety of formulas used by insurers. The following formula is used by insurers (note that you will not find the same formula in all policies):


Consider the example of Ava

  • Ava was earning $90,000.00 and working full time before she injured her back.
  • Her income protection insurance covers her 85% of her income to a maximum of $6,000.00 per month.
  • Due to her injury, her doctor advised her to work only 4 days a week (equivalent to $74,000 per year).
  • Ava may claim the following partial incapacity benefits:

[($90000 – $74000)/$90000 ] * (75% or 85% of  her income)

Even though Ava is back at work, she may still claim an extra $13,600.00 per year through her income protection insurance.



Contact Aspect Underwriting today for a quick & easy online income protection quote.

Mike Wallis

Mike has over 25 years experience, having spent his first seven years working as a Broker at Jardine Lloyd Thomson in Melbourne and in 2002 was transferred to JLT’s Accident and Health Department in London. For four years (2002 – 2005) Mike was a specialist A&H Lloyd’s Broker and during this time developed excellent relationships with the Lloyd’s A&H underwriting fraternity. In 2006 he returned to Australia in a senior broking position with overall responsibility for Placement Strategy, including the implementation of underwriting facilities and the various authorities granted by Lloyd’s. Mike was the underwriter at two specialist Underwriting Agencies prior to founding Aspect Underwriting in 2016.