INCOME PROTECTION under SUPERANNUATION
Is your Income Protection plan under Superannuation, then you should consider the following potential ’RISKS’:
Please consider the following RISKS under superannuation:
-
- Income Protection is only tax deductible to a maximum of 15%.
• Outside of Superannuation these premiums are fully tax deductible to your marginal tax rate of 19% to 45%. - Income Protection is generally not transferable from one super to another.
- Claims are generally limited to 2 years before benefit payments stop.
- If your insurance policy is not fully underwritten, then you have a greater chance of your claim being DENIED.
- Work/Industry claims are determined under the definition of temporary incapacity. Therefore your first payment is only made after you have exhausted all your sick and holiday leave. In addition, you need to have ceased all work, as a result of your sickness or accident and are not expected to return to work, before your waiting period in your policy has expired.• If judged to be permanently incapacitated (not expected to return to work again), then your ongoing payments will cease before your 2 year benefit period has expired. Why, because incapacity status has changed.
- Income Protection is only tax deductible to a maximum of 15%.
- Policy definitions under Superannuation are restricted by the SIS Act.• Under SIS your income is determined at the time (day) of disablement
• This is not the case with policies outside of Superannuation. - Your claim may not be paid for a pre-existing health condition, even though you were unaware of the condition when the policy commenced.
- Under super your policy is an indemnity contract rather than Agreed Value.
• Meaning you may not be paid your full monthly benefit on claim.
Please Take Note:
* Your policy is a contract between you and the insurer. The terms of the contract determine whether your claim will be successful or not.
– So let’s not leave this to chance.
** Medical Insurance is not Income Protection, Medical Insurance does not provide you an “Ongoing Income” to cover your living expenses.
Irrespective of whether you DO or DON’T have Income Protection, please CONTACT US today for a review:
INCOME PROTECTION CASES
The cases below are circumstances where clients “claimed“ against their Income Protection policy.
Dennis’s story: Income Protection, Major Depression, Paid $10,000 / Month
Who is Dennis?
Dennis is a 48 year old self employed real-estate agent. He is recently divorced and has two adult children.
What happened to Dennis?
Following a number of negative episodes, Dennis was diagnosed with a major depressive disorder and was unable to continue working. When Dennis started his business many years ago, he had the forethought to see a financial adviser who guided him through taking out a range of insurance cover, which he continued to maintain. Under his Income Protection policy, he was able to make a claim so that he could cover the bills while he was unable to work.
Where is Dennis Now?
The Medical Services team approached Dennis to see if he would be interested in assistance with returning to work. Dennis was keen to embark on the road to recovery, so they engaged a rehabilitation consultant with a background in psychology to help. The consultant developed a return to work plan in consultation with Dennis and his psychiatrist, and Dennis has since returned to part time work.
Irrespective of whether you DO or DON’T have Income Protection, please CONTACT US today for a review:
Without the professional assistance of our Life Insurance Broker, these claims may not have been successful.
* Provided by TAL in 2017
Fiona’s Story: Chronic Fatigue Syndrome, Paid $10,000 / Month
Who is Fiona?
Fiona, 39, works in sales and lives with her young family.
What happened to Fiona?
Fiona had an outgoing personality and was usually full of life. However she began to suffer persistent fatigue and depression, so bad that she couldn’t get out of bed in the morning to face the day. With her family’s support, Fiona visited her doctor who diagnosed her symptoms as Chronic Fatigue Syndrome. Through her adviser, she claimed against her Income Protection cover via her super fund to replace her income as she would need to take an indefinite time off work.
Where is Fiona Now?
Fiona used her Income Protection payment to pay her regular bills and also take her family on a short holiday to help with recovery. She has eased her way back into her job by working part-time.
Irrespective of whether you DO or DON’T have Income Protection, please CONTACT US today for a review:
Without the professional assistance of our Life Insurance Broker, these claims may not have been successful.
* Provided by TAL in 2017
* Case Studies TAL & Zurich.
General Advice Warning:
The information contained in this website is for general information purposes only. The information is provided by BDM Financial Services and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
Before investing in any product BDM Financial Services recommends that you first obtain a copy of the relevant Product Disclosure Document before making any decision regarding the purchase of or investment in that product or service in order to ensure that it is suitable for your own personal financial needs and circumstances.