Income Protection Insurance
Income Protection Insurance is designed to replace income lost as a result of an accident or sickness preventing you from performing your normal occupational duties by paying an ongoing benefit. The waiting period before benefits become payable and the time period that benefits may be payable for varies between different policies on offer.
Income Protection Insurance is usually limited to 75% of a person’s salary, or in the case of self employed persons, their gainfully earned taxable income.
Benefits are paid on an ongoing basis once the prescribed waiting period has been served, and continues to be paid on a regular basis whilst disabled (as defined in the policy) until such time as the maximum benefit period has expired. In some situations. a lesser benefit may be payable if you are only partially disabled, for example, you can return to work but only for a limited time each week.
Business Expenses Insurance
Business Expenses Insurance is available to certain self-employed persons who wish to cover their business expenses should they be unable to work because of illness or injury.
It may also be available to companies in respect of income producing employees where those employees are unable to work because of illness or injury.
Payments are generally made on a monthly basis and can reimburse up to 100% of approved business expenses. The payments are generally limited to 6 or 12 months.
Term Insurance
Term Insurance provides a lump sum upon the event of the death of the life insured (other than by suicide occurring within thirteen months of the policy commencing). A common extra benefit may be that if the life insured is diagnosed as terminally ill and is likely to die within a certain period (usually 12 months), the lump sum may be paid prior to death.
Total & Permanent Disablement (TPD) Insurance
TPD Insurance aims to provide a lump sum payment in the event you become totally and permanently disabled. The definition of totally and permanently disabled varies between insurance providers.
Generally, the definition of totally and permanently disabled will be the inability to perform the usual duties of the following:
- your own occupation;
- an occupation by which you are qualified by reason of education, training or experience; or
- any other meaningful paid or unpaid work.
A TPD claim may also be paid in the event of certain disabling conditions occurring, such as the loss of sight of two eyes or the loss of use of two limbs.
TPD is usually sold as an additional option to Term Insurance. Where TPD Insurance is sold as an option to Term Insurance, and a TPD claim is made, the Term Insurance will usually be reduced by the amount of the TPD payment.
Trauma Insurance
Trauma (also known as Crisis, Living or Recovery) Insurance, aims to provide a lump sum payment in the event that you suffer a specified, life threatening condition. Benefits are usually paid for a trauma within a set list of defined medical conditions, as listed in the policy terms and conditions. Typical of a trauma policy would be a lump sum payment if you were to suffer a heart attack, stroke or life threatening cancer as per the policy definitions. The payment is made to the owner of the policy.
Buy / Sell Insurance / Agreement
A buy/sell agreement is a contract drawn up between business partners so that it allows a surviving partner/s to be bound to buy out the departing business partner’s share of the business should a specific event be triggered.
The agreement is underpinned by the use of life insurance on each partner’s life. This provides the funding for a deceased/disabled partner if the event occurs during their working life. Consider the following:
- Would you like to have your partner’s spouse as a business partner?
- If they pass away, how will you determine the value of their share of the business?
- Who will receive control of the business if your partner passes away unexpectedly?
All of these questions, and more, can be answered through the construction of a buy-sell agreement. Generally, life insurance is very cost effective and can ensure that whatever pre-determined formula is written within the agreement, the insurance policy can meet that value.
Therefore, if your partner were to pass away, the buy/sell agreement would be activated. The proceeds of the policy would be paid to the deceased’s estate in accordance with the buy/sell agreement. The business would therefore avoid any conflict of control, ownership or valuation disputes.
Keyperson Insurance
Keyperson insurance protects businesses from the loss of individuals, whose capital, knowledge or experience are integral to the business.
In the event of the death of a key person, the business should have the ability to continue operating. Keyperson insurance can provide a lump sum benefit to ensure that a person with similar skill sets is affordable for the business.
Claims Service
This is the true test of the product and company you have selected to protect your income, family and estate. Unfortunately, claims do not always go smoothly and people who are not clients are being referred to us by solicitors and accountants for assistance with the claims process. Because of the time spent on these claims, we charge these people a fee for service, which is happily paid. We have found that at the conclusion of the claim process, these people have transferred their life insurance to Lifecover Australia. Please note, we do not charge our own clients for looking after claims.
(The above are generic descriptions only. You should refer to the recommended insurer’s Product Disclosure Statement for accurate and complete descriptions of policy terms and conditions relevant to the recommended products.)