insurance against retrenchment
- Thread starter eggnog
- Start date
Income protection insurance is a bit of a con as it only pays if you are earning a regular income, what if you are unemployed, also it pays only up to 75% of your salary regardless how much premium you are paying for.
oasis1frog, if you are usually employed, the cover usually continues for short periods of unemployment. eg If you've had a job, lose it for 2 months, then happen to get very sick during that 2 months, the cover usually kicks in and you start getting an income from the income protection policy.
And yes, of course they have to structure it so that you're not getting more cash from not working than you'd normally get for working
, otherwise the incentive for fraud would be way too high and the product wouldn't be viable. Everybody on $30K would simply buy income protection to cover $100K, then falsify a claim. Similarly, I don't believe these policies cover unemployment, because otherwise there wouldn't be sufficient incentive to find a job and claims would be through the roof. As Centrelink would well know, it's very hard to prove that somebody can or can't find a job.Sure, claims require substantiation, but they also rely on the people earning $100K having expanded their lifestyle such that they need $100K to live, and for those people, $75K would be a "subsistence lifestyle". In 99% of cases (including my family), it's a pretty safe bet.
I don't consider it a con at all. (Though I'm skeptical about trauma insurance; have heard it's nigh-on impossible to get a payout.) If my hubby got as ill as I did with a previous employer, our family would be (financially) up s**t creek, and the income protection insurance is well worth the peace of mind it brings.
I know people who've had to claim on their income protection and, whilst they had to substantiate claims (naturally), didn't have undue difficulties getting paid out.
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I know CBA offer Income Protection insurance for involuntary loss of employment (ie. getting fired). It has a 2 month (if I remember correctly?) waiting period and it pays your minimum loan repayments for a period of 3 months (and nothing more). I think you have to have your loans with CBA though to qualify. All in all its pretty limited.
I have income protection with my super fund, FSS. (First State Super) You can choose your waiting period (1 month, 3 month, 6 months etc) and the level of income you receive (50% or 75% of your normal one). Of course premiums vary depending on the selections you make.
I do hope I never need it... but I've gotten it just in case (work also pays for it as well )
I do hope I never need it... but I've gotten it just in case (work also pays for it as well
)
if you get retrenched, run out the room, and throw yourself down the stairs while your still employed
it should give you 6 months to make some new plans.
Not as advice though
HAHAHA!
auror - does that cover being fired or is it only injury / illness?
there is no such product in australia
US, on the other hand, have something like that
in Australia we have mortgage protection insurance, which pays your mortgage if you are fired, and we have income protection insurance, which pays you certain percentage of your income ONLY if it's due to illness or injury
US, on the other hand, have something like that
in Australia we have mortgage protection insurance, which pays your mortgage if you are fired, and we have income protection insurance, which pays you certain percentage of your income ONLY if it's due to illness or injury
