Making Sure The Bills Are Still Paid...Even If You Are Not
A Simple Guide To Income Replacement Cover
Income replacement is probably the most important cover for a working person to have if you lose your income, your whole lifestyle could be threatened. There are a number of different types of cover available and a lot of variables and our job is to help you choose the policy that suits you and your budget best.
Factors Influencing The Cost Of Income Replacement Cover
Personal Details such as occupation, health (incl height and weight) and whether or not one smokes, can have a direct bearing on the cost of cover.
The No Pay Period (ie your chosen excess) can vary from 4 weeks up to 2 years and, as you might expect, the longer the excess, the cheaper the cost. The most cost-effective period is often 13 weeks and it's important to note that most companies pay one month in arrears after that. It is possible to choose a split benefit, for instance you might choose to receive $x per month with a 4 week wait topped up with $y per month after 13 weeks.
The Benefit Payment Period can be 2 years, 5 years or through to 60, 65 or 70. The longer the benefit period the higher the premium, however, having a benefit payable to age 65 or 70 could be very important if you're unable to work again.
A Back or Stress Limitation can reduce the cost, but it also limits the benefit period for depression or back disorder to a maximum of 2 years. We do not normally recommend these limitations as these conditions typically require long term benefit payments.
Indexation of the cover, both before and after a claim, is essential to maintain your purchasing power.