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Income Protection Waiting Period


Income protection insurance allows policy holders to get monthly payments when they cannot work due to certain reasons. Income protection policies are preferred over other types of cheaper insurance policies since income protection policies cover a large percentage of the policy holder’s income when he is unable to work.

 

Monthly Payments

Before getting the first monthly payment, all policy holders have to wait for a few days and this is known as the waiting period. This waiting period is mandatory however policy holders can decide how many days they want to wait, however some insurance companies that offer cheap policies do not allow people with blue collar jobs to wait for more than a certain number of days.

At the time of filing the insurance application form, most buyers can decide how many days they want to wait. While a few insurance companies allow buyers to wait for 2 weeks – 2 years depending on their choice, other companies only allow buyers to wait for 2 months – 6 months.

Usually insurance companies in Australia offer:

however in some cases insurance companies can make exceptions if the person who wants to buy a policy has a different requirement. This however depends on the policies of the insurance company and varies from one company to another.

 

Benefits During Waiting Period

It is important to remember that during the waiting period, policy holders cannot enjoy any benefits offered by the insurance company hence this period is also known as the cooling off period. The waiting or cooling off period is only applicable to the first payment after the claim is made which means that the policy holder does not have to wait for all subsequent payments and all the future payments are made on time.

Buyers should remember that if they are in a hurry and they want to get the first payment after filing the claim soon then they should opt for an insurance company that offers customizable policies. The waiting period directly affects the cost of the income protection insurance policy and a longer waiting period usually implies lower premium.

Buyers are encouraged to consider personal factors such as the number of paid leaves, annual leaves they have before deciding a waiting period since this will allow buyers to select a suitable time to wait without facing financial problems. Mortgages, loans and other obligations should also be taken into account before the buyer decides how many days he wants to wait before getting the first income protection payment.


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