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Income Protection Insurance Q&A


Are my premiums tax deductible?

Generally, the premiums for Income Protection Insurance are tax deductible.

However, just as your income is subject to tax, any income benefit you receive will also be assessable as income for income tax purposes.

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Are there any exclusions that apply to Income Protection Insurance?

Yes, there are some exclusions. We will not pay a claim for a disabling sickness or injury occurring directly or indirectly from any of the following:

  • A mental disorder or illness, or
  • An intentional self-inflicted act, or
  • Attempted suicide, or
  • The consumption of drugs (unless under the direction of a medical practitioner and not in connection with treatment for drug addiction, substance abuse or dependence), or
  • The consumption of intoxicating liquor, including having a blood alcohol content over the legal limit while driving, or
  • Normal pregnancy (including participation in IVF or a similar program, normal discomforts such as morning sickness, backache, varicose veins, ankle swelling or bladder problems), giving birth, miscarrying or having a pregnancy terminated, or
  • War (whether declared or not) or war-like activity, or taking part in a riot or civil commotion, or
  • Engaging in any criminal activities or illegal acts.

We will not pay the Income Protection benefit where we have agreed a special term with you in respect of your cover that specifically excludes the event or condition leading to the claim. Any such special term will be agreed with you before your Policy is issued and will appear on your Policy Schedule.

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Can I change my level of cover when I need to?

Absolutely! You can increase or decrease your insurance at any time. Any change is subject to approval.

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Can I cover my partner too?

If your partner is a homemaker, you can include Homemaker Insurance on your Policy. This cover can pay a Homemaker Monthly Amount Insured of either $500 or $1,000 for six months. It is not possible to cover your working partner on your Policy; however, your working partner can apply for a separate Income Protection Insurance Policy.

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Does my occupation affect my Income Protection Insurance premium?

Yes, your occupation could affect the premium you pay. Other factors that might affect your premium are:

  • Your age, gender and smoking status at the time of the application.
  • The Income Protection benefit provided.
  • The Benefit Period.
  • The Waiting Period.
  • Other factors such as your state of health, family history and participation in hazardous activities.
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Do I have to pay my premiums while I am unable to work?

While we're paying your Bill Cover benefit, your premiums on your Policy will be reimbursed in arrears in accordance with your monthly claim payments until either you are no longer disabled, or the maximum Benefit Period has been reached. Once your benefit payments start, we will refund any premiums you have paid during the Waiting Period.

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Do I have to provide proof of my income to get Income Protection Insurance?

You don’t need to give us any financial evidence during the application stage for Income Protection Insurance.

However, if you make a claim you’ll need to provide satisfactory financial evidence of your pre-disability income.

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Do I need to take a medical test to get Income Protection Insurance?

Medical and blood tests are not required. We’ll simply ask you some health and lifestyle questions over the phone to help us decide whether we can insure you.

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How does the Income Protection Insurance benefit work?

We will pay your Income Protection benefit as a monthly amount if:

  • You suffer a disabling sickness or injury that leads to a loss of income, and
  • You remain continuously disabled during the Waiting Period, and
  • You are continuously disabled after the end of the Waiting Period, and
  • You are not working in any occupation during the Waiting Period, and
  • Solely as a result of the disabling sickness or injury, your capacity to earn your pre-disability income reduces by 20% or more from your regular occupation.
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How are Income Protection Insurance premiums payable?

Your premium will be debited on the day of your choice, either fortnightly, monthly or annually. The date you select for your first premium payment will become your Policy Commencement Date. You can pay either by direct debit from your bank account or credit card.

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How do I apply for Income Protection Insurance?

You can apply for Income Protection Insurance by simply calling us on 1300 665 187.

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How do I know what benefit I will receive?

We will pay your chosen monthly Income Protection Insurance benefit, as long as this amount is no more than 75% of your monthly pre-tax, pre-disability income. If you receive other payments while you’re not working (such as payments from another income protection Policy, worker’s compensation or social security), and this combined with the payments from your Income Protection Insurance Policy adds up to more than 75% of your monthly pre-tax, pre-disability monthly income, your benefit will be reduced to take account of these other payments.

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How long can I keep my Income Protection Insurance?

As long as your premiums are paid on time, we guarantee to renew your cover until the Policy renewal date following your 65th birthday.

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How much Income Protection Insurance can I apply for?

You can apply to cover up to 75% of your monthly pre-tax income (subject to a maximum of $10,000).

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How do I calculate my pre-tax income?

For the purposes of applying for insurance your pre-tax income is the sum of all income earned through personal exertion after the deduction of all expenses incurred in producing that income, but before the deduction of income tax.

Pre-tax income does not include passive forms of income such as rent and investment income.

In particular, if you are self employed you should consider what expenses are necessarily incurred to generate your income as these must be deducted when determining your pre-tax income level.

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How old do I have to be to apply for Income Protection Insurance?

All Australian residents aged between 18 and 59 who work at least 20 hours per week in a role they have been working in for at least 12 months are eligible to apply for Income Protection Insurance.

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I am a smoker. Can I still be covered?

Yes, as a smoker you can still apply for Income Protection Insurance.

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If I am receiving medical benefits, will they affect my Income Protection Insurance benefit?

Yes, if you receive other income during the claim period, this money will be taken into consideration when calculating your payable Income Protection Benefit Amount.

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Will I get anything back if I cancel my cover?

If you cancel your Income Protection Insurance within the first 30 days of commencement and you haven’t made a claim during that time, we’ll give you a full refund of premiums that have been paid.

If you cancel your Policy after 30 days, and pay your premium fortnightly or monthly, you will not get anything back because this Policy is not a savings plan. However, if you have chosen a yearly payment option, we will refund you a pro rata of the unused portion.

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I already have life insurance. Do I need Income Protection Insurance as well?

Income Protection Insurance and life insurance can work together to provide financial security for you and your family.

Income Protection Insurance is designed to help replace your income if you are unable to work for an extended period due to sickness or injury.

Life insurance pays a benefit in the event of your death and is designed to help you provide financial security for your family if the worst was to happen.

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I have sick leave at work. How long should my Waiting Period be for my Income Protection Insurance?

You can choose a Waiting Period of either 30 or 90 days on your Income Protection Insurance. The longer the Waiting Period you choose, the lower the premium you pay. Ideally, your Income Protection benefit should start as soon as your income is affected. However, everyone’s situation is different, and you may wish to align your Waiting Period with the minimum number of days’ sick leave you will have available at any given time in the future.

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As a homemaker, I look after the family and am not on a salary. Can I take out cover?

While you can’t take out Income Protection Insurance as a standalone Policy, we do offer the option to add to an Income Protection Policy. Homemaker insurance provides a Homemaker benefit of either $500 or $1,000 per month for six months if the homemaker is unable to perform any three of their domestic duty tasks due to sickness or injury. The total benefit payable for Homemaker insurance is $18,000.

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I play a competitive sport. Does this affect my application for Income Protection Insurance?

Certain hazardous activities (including some sports) could affect your application for Income Protection Insurance. We will ask you some questions about your participation in any hazardous activities and let you know if your activities affect your application in any way.

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Is Income Protection Insurance available to people who are self-employed?

Provided you have been self-employed for at least 12 months prior to the Policy Commencement Date, and you are an Australian resident aged 18 to 59, you can apply for Income Protection Insurance.

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I work part time. Can I still take out Income Protection Insurance?

Yes, as long as you are working at least 20 hours per week and you have been working in this capacity for at least 12 months prior to the Policy Commencement Date, you can apply for Income Protection Insurance.

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What happens if I get sick or injured overseas?

Provided you are an Australian citizen or permanent resident living in Australia at the time of application, you’re covered anywhere in the world by Income Protection Insurance.

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What happens if I return to work and then find I need more time to recover?

If your sickness or injury recurs within six months of your last Income Protection Insurance benefit payment, we’ll resume paying your monthly benefit without the need for a new Waiting Period. Your claim is only payable for the balance, if any, of the Benefit Period.

If your sickness or injury is due to an unrelated cause, then a new Waiting Period will apply. This means that you can claim for a sickness or injury unrelated to a previous claim, but the Waiting Period and Benefit Period will apply.

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What if I change my mind?

If you cancel your Income Protection Insurance within the first 30 days of commencement and you haven’t made a claim during that time, we’ll give you a full refund of premiums that have been paid.

If you cancel your Policy after 30 days, you will not get anything back because this Policy is not a savings plan. However, if you have chosen a yearly payment option, we will refund you a pro rata of the unused portion.

All cancellation requests must be made in writing.

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When does my Income Protection Insurance Policy begin?

Your cover starts immediately on our acceptance. Your first premium is due on the Policy Commencement Date, which is set out in your Policy Schedule.

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When would the benefit payments start and for how long would I receive them?

For Income Protection Insurance, the monthly benefit payments start at the end of the Waiting Period you have chosen (either 30 or 90 days) and are paid to you in arrears. Your benefit payments will continue for each month while you’re unable to work for the Benefit Period you have chosen – six months, one year, two years or five years. For example, if you choose a 30 day Waiting Period, your first payment would be 60 days after you were first eligible to claim (that is, the 30 day Waiting Period plus 30 days because claims are paid monthly in arrears).

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Will my Income Protection Insurance premiums go up?

The premium is calculated at each Policy Anniversary, and increases with your age and also if you increase your monthly amount insured.

Your premium is calculated each year on the Policy Anniversary and is based on your age at that time, and the benefit level and plan you select.

Premium rates are not guaranteed. However, you can never be singled out for an increase — any variation will apply to all Income Protection Insurance Policyowners.

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Who is the underwriter?

Income Protection Cover is issued by:

Hannover Life Re of Australasia Ltd (Hannover)
ABN 37 062 395 484
Level 7, 70 Phillip Street
Sydney NSW 2000

Hannover is a wholly owned subsidiary of Hannover Re and is part of the Hannover Re Group worldwide. Hannover Re is currently the third largest global life reinsurer and has a Standard and Poor's Insurer Financial Strength of AA- (Very Strong), and has maintained this rating for a number of years.

The life insurance business of Hannover has been operating in Australia since 1958, so you know you're backed by a company you can trust.

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What information will I need to get an Income Protection quote?

Find out what information you will need to provide for a quote with our Income Protection Quote Guide.

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What if I have another question?

Simply email us at info@reallifecover.com.au or call one of our Customer Service Specialists on 1300 665 187.

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