If you have been putting off getting Income Protection, don’t delay, get it before April.
As of 31st March 2020, life insurers will no longer be able to offer agreed value income protection to NEW applicants.
An agreed value policy is where the level of cover is based on your income at the time of application.
The alternative (called an indemnity policy), is where the level of cover is based on your income at the time of making a claim.
This means that if your income decreases prior to making a claim you may not get paid your full benefit! Further, having to prove your income at the time of a claim can be extremely stressful – particularly if you are self-employed!
The good news is that all policies existing BEFORE the cut-off date will retain their Agreed Value status. So, if you have agreed value cover already OR you get it in place before that date, your policy will have an Agreed Value.
This is all part of a mandated review from the regulator (APRA) being staged out between now and June 30 2021 – which may also include other conditions such as
Reducing the maximum benefit period from age 65 years old, down to just 5 years.
Removing the guarantee of cover down to a 5 year period, meaning you’d have to reapply (without medicals) every 5 years for your income insurance.
You can read more about the changes from APRA
If you have income protection cover already
Find out if your income protection is agreed value or indemnity, and assess whether it is important to you that your cover is locked in.
Speak to your financial planner (or Lime Financial Planning) about reviewing your cover.
If you don’t have income protection
Speak to your financial planner (or Lime Financial Planning) as to whether income protection is right for you.
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