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Income Protection policies range greatly across the market place however, and there are many features that will need to be moulded to your situation in order to ensure that the policy is relevant to you. It is not the type of policy that you can purchase without receiving advice.
We have made a list below of some important factors to take into consideration when finding the right policy for you:
We have made a list below of some important factors to take into consideration when finding the right policy for you:
- Do it properly and do it early. Income Protection is a type of policy that if done properly in the first instance, can be a policy that you can retain for the long term. Your risk to the insurance company is judged at the time of application and once the policy is in force can not be changed.
The younger we are, usually the more healthy we are and therefore the lower risk we are to the insurance company. We are more likely to gain full cover at standard rates the younger we are and as stated above, once the policy is in place, the insurance policy can never cancel or charge more (apart from usual cost increases if applicable) for your Income Protection.
- Disclose EVERYTHING. From time to time people come to us after submitting an Income Protection claim, only having been told that they will not receive payment as they did not disclose properly their medical history at the time of application. Non-disclosure is not worth the risk - these days insurance companies perform underwriting (investigation) at the time of application, and it is only if you disclose everything that the insurance company can tell you if you will receive payment regarding related conditions in the future. Would you not rather know from the beginning that you are excluded for certain conditions and potentially receive a discounted price or alternatively have the option of comparing the outcome with other insurance companies to try and achieve a full policy? The comfort that is supposed to be achieved with Income Protection can only be achieved if you disclose everything at application time.
- Go for level premiums. We have clients that pay tens of thousands of dollars for a policy in their 50's and 60's which, if they applied for a level premium at application rather than stepped for their Income Protection, would be saving half or more of the cost by now. The additional cost at application may seem like a lot however being forced to reduce your cover later in life or drop your cover all together can come at a much higher cost to you and your family.
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