Income Protection Insurance - worthwhile or not?

I think the different insurances are a good idea.

My only concern is that insurance companies are notorious for worming their way out of payouts when push comes to shove.

Does anyone here know of someone that has been paid after some sort of incident without having to jump through hoops? (Assuming they had insurance in place)

Regards
Marty
 
I ditched my insurance after a hand fracture. The policy was $60pm. I fractured my 4th metacarpal and hand fractures weren't included in the list of automatic payments for fractures. Most policies mean you must be totally disabled and unable to do any of your former work. This means going in toi answer phones voids your claim!

I know even if I injure myself then I will find other work. If I can't work again then I'll join the people on disabliity pensions.

Meanwhile I have over 6 months of accrued sick leave and annual leave so I should be able to recover from most things in that time

To me it just seemed poor value.

Cheers Pulse
 
Most policies mean you must be totally disabled and unable to do any of your former work.

This is a really important thing to check. My friend who has been on claim for more than 12 years had a policy that pays until she can do the type of work she was doing, in her own industry.

There are policies that stop paying once you recover enough to do ANY type of work. Which could mean, if you can answer a call centre phone, or pack shelves, you are "able to work". It might not be what you want to do, so it is imperative you understand the policy.

Wylie
 
Hi Tulip

Sorry dont want to be argumentative but In our case coverage is at 80% of his salary, for a maximum of two years. this simply isnt correct.

To be a complying policy the maximum it will cover is 75% of your income.
 
Apparently theres a fine print between policies that insure you for not being able to do part of your duties or all of your duties. Obviously you'd want the latter as you'd almost need to be bed ridden to not be able to do all your duties.
 
Hi Tulip

Sorry dont want to be argumentative but In our case coverage is at 80% of his salary, for a maximum of two years. this simply isnt correct.

To be a complying policy the maximum it will cover is 75% of your income.

I have a policy that covers 80%...it is an old FAI policy (Tower now), I think if you had a 10 year work history when you applied you got a "bonus" 5% additional cover. Covers to age 65, 4 week waiting period, and benefits are payable if you are unable to return to your previous field of employment, not any form of work...

Apparently it's pretty good, from time to time I see if there is something better around but brokers reckon they can't match it. I suspect it is a legacy of the unsustainable insurance practices back in the day of HIH etc...
 
You may want to check your Super - income protection insurance is included in ours. So nothing comes out of our actual pockets to have it.

Cheers,
Jen
 
My only concern is that insurance companies are notorious for worming their way out of payouts when push comes to shove.

Yep, and the only reason we do not have it either.

At that stage in proceedings, all of the nice brokers, friendly agents, helpful telephone receptionists, the pleasant salespeople and the magnificently marketed brochures with bright cheery smiles and 'cute as a button' little kids carrying teddy bears all step away from the podium and you, sick and injured and not producing any income with the bills mounting up....hereinafter known in the Contract as the "insured party", finally get introduced to the two characters you're going to be conversing with from now on. The Insurance Co's lead counsel and the Insurance Co's appointed doctor.

These two characters are the only people that stand in the way between the payout you thought you were covered for and the shareholders of the Insurance Co....hereinafter known in the Contract as the "insuring party", who frankly, have diametrically opposed financial goals to you.

This is not a good situation to be in by any means, as you are almost always in the weaker negotiating position, for a number of reasons...

1. They already have your premium, it's been placed into their investing float, and they are earning money from it every day.

2. The crucial factor of time is definitely on their side.

3. I have never met any sick individual who is wealthier than the collective Ins. Co, and hence they have the ability to always appeal to a higher court if they wish to drag it out.

4. The solicitor who drew up the Contract and specific wording would have been through every minute detail many times over, and already have been through various vetting and refinement procedures to the wording to strengthen their legal / medical position over the years. I can absolutely guarantee ( no opinion necessary) that the chap who wrote it and refined will know it, and the intent and meaning behindthose words, far better than any chap lying there unable to work.

5. Even if you are obviously sick, cannot work, have that confirmed in writing by your Doctor, none of that counts for diddly. What's important is that the Ins. Co. doctors confirm it (exactly) in writing. This is an onerous burden to overcome....and yet until you do, you get nothing.

6. Almost everybody knows the standard tactic of all Ins. Co's is to deny coverage as standard practice at the start, this clears off a certain percentage of claimants right there, and then of course we all know about their private investigators who work miracles to disprove your medical capabilities / claims.

We had a look at the TPD conditions, and they were so onerous to meet (and the list of exlusions went on for 6 pages !!) that we knew for a fact we could never qualify for it. The nurse said at the time of our assessment "To tell you the truth, you may as well be dead before qualify for that". It wasn't her place to tell us that, but the truth was nonetheless enlightening.

Anyway, we both felt, after detailed study of the Contract, the only insurance coverage we could qualify for would be Death coverage, but even then we felt a Death Certificate might not satisfy their criteria. It's certainly not clear cut and there were about 5 exclusions.

I'd very much like to see the exact wording of this "Rolls Royce" policy.
 
kissfan said:
My only concern is that insurance companies are notorious for worming their way out of payouts when push comes to shove.
Yep, and the only reason we do not have it either.
............
I'm with Dazzling for the same reason. I invest in insurance cpys & banks, so I'm on the other side of the fence. Their actuaries are v. good at stats, their marketters, their fancy head offices, flash brochures & lawyers all cost money. The remainder of the premium income (that you pay) gets divided between the shareholders, the tax man & the claims dept. So the risk/reward for those who pay the premiums is poor.

Of course, your ultimate aim is to be in a position where you have no personal income, so no income protection insurance is required.
 
I take on board Dazzling's comments and I agree that insurance companies are sharks in pretty dresses but I do know several people who have had claimed on their income replacement policies.

The insurance companies don't make it easy for them, but, to be honest, I think that is fair enough. After all, there are plenty of documented cases where people are ripping off the insurance companies and getting their weekly payment, while earning cash in the hand doing exactly what they say they cannot possibly do.

One friend has been paid by her insurance company for about 14 years. Yes, they make her jump through hoops and they send her every so often to their doctor. They make it hard for her, but they are paying her a motza, so they are making sure she is not a shonk.

She is quite sure she has been followed and watched, but has nothing to hide. She is genuinely not able to do her chosen work, and took a policy that covered that aspect. Still, it is unnerving.

One of her friends had a policy that meant once she could do any type of work, the insurance company expected her to do so. She had a tape sent to her in the mail, told there was a "better" one. The tape showed her in her dining room, eating dinner or reading, filmed through a window.

They wanted to get her off their books and offered her a reduced lump sum, which she took. She couldn't handle the intrusion or the stress. She said the people following her made no attempt at being "invisible". They were out to intimidate her.

I think so much of this is unfair, but there are plenty of people ripping off the insurance companies, so it cuts both ways.

We have the insurance, with a six month lead time, because hubby has at least that much sick leave accrued. I have faith in the system, if we ever need it.

Like anything, there are things that go wrong, but fingers crossed we will never need this policy, but I would not like to be without that sleep at night factor.

Wylie
 
Yep, and the only reason we do not have it either.

At that stage in proceedings, all of the nice brokers, friendly agents, helpful telephone receptionists, the pleasant salespeople and the magnificently marketed brochures with bright cheery smiles and 'cute as a button' little kids carrying teddy bears all step away from the podium and you, sick and injured and not producing any income with the bills mounting up....hereinafter known in the Contract as the "insured party", finally get introduced to the two characters you're going to be conversing with from now on. The Insurance Co's lead counsel and the Insurance Co's appointed doctor.

These two characters are the only people that stand in the way between the payout you thought you were covered for and the shareholders of the Insurance Co....hereinafter known in the Contract as the "insuring party", who frankly, have diametrically opposed financial goals to you.

This is not a good situation to be in by any means, as you are almost always in the weaker negotiating position, for a number of reasons...

1. They already have your premium, it's been placed into their investing float, and they are earning money from it every day.

2. The crucial factor of time is definitely on their side.

3. I have never met any sick individual who is wealthier than the collective Ins. Co, and hence they have the ability to always appeal to a higher court if they wish to drag it out.

4. The solicitor who drew up the Contract and specific wording would have been through every minute detail many times over, and already have been through various vetting and refinement procedures to the wording to strengthen their legal / medical position over the years. I can absolutely guarantee ( no opinion necessary) that the chap who wrote it and refined will know it, and the intent and meaning behindthose words, far better than any chap lying there unable to work.

5. Even if you are obviously sick, cannot work, have that confirmed in writing by your Doctor, none of that counts for diddly. What's important is that the Ins. Co. doctors confirm it (exactly) in writing. This is an onerous burden to overcome....and yet until you do, you get nothing.

6. Almost everybody knows the standard tactic of all Ins. Co's is to deny coverage as standard practice at the start, this clears off a certain percentage of claimants right there, and then of course we all know about their private investigators who work miracles to disprove your medical capabilities / claims.

We had a look at the TPD conditions, and they were so onerous to meet (and the list of exlusions went on for 6 pages !!) that we knew for a fact we could never qualify for it. The nurse said at the time of our assessment "To tell you the truth, you may as well be dead before qualify for that". It wasn't her place to tell us that, but the truth was nonetheless enlightening.

Anyway, we both felt, after detailed study of the Contract, the only insurance coverage we could qualify for would be Death coverage, but even then we felt a Death Certificate might not satisfy their criteria. It's certainly not clear cut and there were about 5 exclusions.

I'd very much like to see the exact wording of this "Rolls Royce" policy.


Daz, surely the lovely smiling girl onthe amii ad, means these people are lovely and make it easy for you to make a claim, by the way i'm now off to cloud cuckoo land.

i'm lucky? my company pays for my income protection, tpd and trauma
 
Unfortunately this is an imperfect market due to lack of information. It would be great to have a web resource where we could see some real stats on claims vs insurance company investigations vs independent investigations.
 
I have had Income Protection Insurance for some time and 6 months ago was diagnosed with a tumour on my appendix which required surgery for its removal (plus a section of large intestine). Fortunately, my IPI came through and recognised this condition as a trauma classification with the net result being a rather nice 6 month salary payout in lieu of the 5 weeks I was expecting!! :) :)

I know even if I injure myself then I will find other work. If I can't work again then I'll join the people on disabliity pensions.

I couldn't resist the post Pulse; if your avatar (thumbnail picture) is a scalpel, then surely you WILL injure yourself eventually..... :D :D
 
If you don't mind, who were you insured with Modal?

I'm with ING. I've only heard stories from brokers about people getting paid out.
 
Sorry to bring this up again Modal but can you tell us who you're insured with. Am trying to trawl through all the crappy providers to find one thats going to pay up when it says it will and not find every loophole not to.

If anyone else can recommend a decent insurer for income protection, would love to hear about it.

Thanks heaps.
 
I do a lot of IP business through Aviva.

Good sized company with over $800M FUM.

As long as you dont have an unusual occupation or exotic lifestyle you will get a normal rating.

Ask your Fin Planner to give you some form of commission rebate.
I usually rebate commission to my clients through a lower monthly premium.
 
I do a lot of IP business through Aviva.

Good sized company with over $800M FUM.

As long as you dont have an unusual occupation or exotic lifestyle you will get a normal rating.

Ask your Fin Planner to give you some form of commission rebate.
I usually rebate commission to my clients through a lower monthly premium.

Aviva...you have got to be joking.:mad:

I have been sick for 10 years and I was paid for 5 by them and have spent the next 5 fighting these corporate crooks to get my benefits back through the Courts that these mongrel Insurance Company's use as their "Claims Department".

Go and check over a week any Supreme Court Listings. You will see dozens of cases in the system Joe Bloggs vs Insurance Company. And its always ING, National Mutual (AXA), Aviva, Astereon, and other overseas Company's. The Australian Company's are rarely there.

Got IP ,get sick and claim....good luck. Dazzling's post is spot on.:mad:
 
Hate to disagree with you but i do.

The Australian Company's are rarely there. Which ones are you referring to.

I am aware of several clients who have made a claim with the companies you listed and have never had an issue with payment.
 
Hate to disagree with you but i do.

The Australian Company's are rarely there. Which ones are you referring to.

I am aware of several clients who have made a claim with the companies you listed and have never had an issue with payment.

Oh really? Well you are incredibly lucky but not wishing to sound disrespectful, as a Financial Planner, you would be unlikely to be broadcasting the cruel practices of Insurance Company's.

Where/when did these crooked, immoral practices start? Well McKinsey & Co have a lot to answer for? Read this first.:mad:

http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=aIOpZROwhvNI

Now just a quick look at a recent Victorian SC List.

http://www.supremecourt.vic.gov.au/...rces/file/ebafea4c406192c/30 January 2008.pdf

That day has 2 National Mutuals (AXA), a couple against Comcare and a Super Fund (run from the US).

As the Law year has just started, there aren't many days to post up but there are several more mentions of Axa, FAI, and Super Funds fighting Joe Bloggs on other days.

Our family is being screwed by one of these Insurance Company's and are STILL trying to get our day in Court to get our benefits restored after the Insurance Coy., took them off us after paying for 5 years citing 2 non-contractual BS reasons effectively saying "sue us", knowing the financial inequality of the fight. We are 4.5 years into this fight as they use all the tricks in the book to obfuscate and delay as their only reason and tactic is to try and starve us out....a family with 4 kids. Fortunately, we have a huge no win-no fee Plaintiff Law Firm looking after us.

We were invited to participate in a Civil Law Review here in Victoria by VLRC Commissioner Dr. Cashman, and our story will form part of the final report to the Attorney General that will recommend reforms to stop these mongrel multi-national's using the Courts as their "Claims Department". Part of our family's submission was 3 month period of Victorian SC Listings. It went to 2 A4 pages long...about 90 I think of Joe Bloggs vs Insurance Company's and those Company's were the ones listed in my 1st post. Now times that by the 5 other states and 2 Territory's plus the County, Magistrates and Federal Courts? It's a joke.

Maybe then Insurance Company's, will be forced to honour their contracts and not look for ways to avoid their obligations as their 1st option. Even last night on the 9 news, a lady who cannot work following the Arthur's Seat Chairlift collapse in 2004, has been denied a paltry $89k by Hannover Re for spurious reasons. Its goes on all the time and its a scandal.:mad:
 
Back
Top