What does income protection cover?
If you can’t work due to being partially or totally disabled because of an illness or injury, income protection insurance can help provide financial relief by paying you a percentage of your regular income, allowing you to focus on your recovery whilst having the means to continue to meet your financial commitments.
As long as you meet your insurance policy’s definition of total and/or partial disablement, and any other eligibility conditions set within your policy, you’ll receive a monthly benefit after you've served the applicable waiting period. Monthly benefits are usually paid in arears.
Medibank’s Income Protection definitions are available in the PDS.
Does income protection cover pre-existing conditions?
It’s still possible to take out income protection if you have pre-existing health conditions. Insurers will ask you a series of health questions when you apply and depending on your answers, you may be required to pay higher premiums for any health conditions you have, or a specific condition may be excluded from your policy. That means you won’t be able to claim if you’re prevented from working due to that particular condition. Australian regulations require you to take reasonable care not to make a misrepresentation to the insurer which basically means you must answer the questions truthfully.
Does income protection cover parental leave?
Normal and uncomplicated pregnancy, miscarriage or childbirth are not generally covered by insurance policies. Time off work due to parental leave are also not covered under an income protection policy.
Does income protection cover redundancy?
No, it doesn’t. Income protection insurance is all about providing protection if you fall ill or experience an injury and can’t work as a result, so very few income protection policies will pay you a benefit if you get made redundant. It’s the same answer if you’re wondering 'does income protection cover termination of employment' or 'does it cover resignation from your job.'.
Income protection insurance is designed to provide you with financial assistance should the unfortunate happen and you’re struck down by an illness or injury that prevents you from working. Medibank Income Protection insurance does not provide cover if you’re made redundant.
Can casual employees get income protection?
This would depend on the number of hours a week you’re working at the time of your application. Each insurer will have their own minimum hours a week test that you’re required to meet in order to take out an income protection policy. You’ll find these details in the PDS of the insurance policy.
Medibank Income Protection’s policy can be found in the PDS.
Can I claim income protection insurance and WorkCover?
If the injury or illness that prevents you from working occurred at work or in relation to your work duties, you may have a right to workers’ compensation – called WorkCover – from your employer.
While some people may be able to receive both weekly WorkCover payments and income protection benefit payments, the combined amount payable will never exceed your pre-injury income. You can still lodge a claim for this illness or injury under an income protection policy. However, the monthly benefit you receive may be reduced by the WorkCover payment you receive or are entitled to receive during that period.
It’s also important to remember that workers’ compensation doesn’t cover injuries or illnesses that prevent you from working but didn’t occur at work, for example a recreational injury.
Does income protection cover death like life insurance does?
Life and income protection insurances are different. Income protection insurance provides a monthly benefit if you’re unable to work due to a disability caused by an illness or injury, to help cover your everyday living expenses. Life insurance pays a lump sum to the policy owner or your nominated beneficiaries if you pass away or if you’re diagnosed with a terminal illness with a life expectancy of less than 12 months.
Some income protection policies may provide a death benefit, where a lump sum payment is provided if you die while your cover is in force.
Does income protection insurance cover every occupation?
Each insurer will have their own list of occupations they can provide income protection insurance to. The premium you pay is dependent on the overall risk of your occupation. The higher the risk, the more you’ll pay – for example, if you work in construction or the mining industry, the chances of you having an accident whilst on site rendering you unable to work for a period of time is higher, compared to an office worker. In this case, the insurer may provide you with income protection cover, however may charge you a higher premium in comparison to the office worker.
How do I find out more?
To learn more about Medibank Income Protection, or to ask questions specific to Medibank Income Protection, click here.