Income Protection Benefit Period

When reviewing income protection policies, you will need to decide how long you want your monthly benefit to be paid for. Depending on the insurer, you can generally choose a specific amount of years, 2 o 5, or up to a certain age, for example up to you age 65 or 70.

What is a benefit period?

The income protection benefit period is the maximum amount of time a life insurance company will pay your monthly benefit should you go on claim because you’re unable to work due to a sickness or accident.

Generally, the longer a benefit the higher your premium will be while the shorter your benefit period, the lower your premium will be.

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When does the benefit period begin?

Generally your benefit period will begin the day after the waiting periods comes to an end, provided you are still either partially or totally disabled and unable to return to work under the advice of a medical practitioner.

What are my benefit period options?

Insurers may differ on what they offer but general benefit period options include:

  • 2 Years
  • 5 Years
  • To Age 65
  • To Age 70

Some insurers may offer benefit periods of 1 year, 6 years or to your age 50 or 55.

What do I need to consider when choosing a benefit period?

There will be a number of things to consider when deciding how long you want to receive your monthly benefit for, including:

Day to day living expenses

You will need to keep in mind what your day to day living expenses will be in the foreseeable future and how long you will be able to afford to continue meeting these expenses without earning an income.

Ongoing debts

Any ongoing debts you will need to pay such as mortgage repayment, credit card repayments and any other loans will also need to be considered.

Affordability of premiums

Longer benefit periods are generally more expensive and you will need to find a balance between affordability and how long you want your benefit period to be.

When does the benefit period end?

It will end at the earliest of the following:

  • Policy expiring
  • Death of the insured
  • End of the benefit period
  • The insured no longer being disabled and is again able to return to work
Published: October 15, 2018
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