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Income Protection

Income Protection (otherwise known as salary continuance) provides a regular income during a period of being unable to work due to sickness or injury.

The insured will have to wait for a period of time before payments commence. This waiting period is decided by the insured at the time of application and can be any of 14 days, 30 days, 90 days, 365 days or 720 days. The longer the waiting period, the lower your premium will be.

Income Protection benefits are paid to the insured for the period he/she is unable to work once the waiting period has passed until they return to work. This benefit period may be to age 65 or 70 depending on the policy taken.

The policy normally pays up to 75% of one's gross income through personal exertion. If the policy covers an ‘agreed value,’ the monthly payment is specified upfront and is stated in the policy document. This means that the amount one will receive should a claim be approved is guaranteed. However, should one have an indemnity value policy, the amount of the monthly payment will be determined at time of claim and will be based on 75% of the income one earned in the 12 months prior to the claim.
The premiums paid on an Income Protection policy may be tax deductible to the payee, however, any income protection payments received from a claim are taxable.
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