When you join a superannuation fund in NSW, you have the option to take out insurance protection. Superannuation funds are not regulated by state or federal governments, so each individual insurance protection policy will be designed and regulated by the provider. This page is all about insurance protection claims in NSW, and what you need to do to make your claim.
What is insurance protection in NSW?
Income protection ensures that your income is protected. It does this by paying part of your income for a set amount of time if you are unable to work due to illness or because of an injury. It pays up to 85 per cent of your pre-injury income for a specified amount of time, making sure that you and your family are still able to live life without the worry of missing out on a significant amount of income. Income protection can be incredibly important, especially if you are self-employed, have dependent family members, or if you have a mortgage to pay. Income protection insurance ensures that you can still make the necessary payments without added financial strain or struggle.
What types of insurance protection policies are available?
There are two main types of insurance protection policies on the market, with each providing a slightly different outcome when a benefit is paid:
- Indemnity value policy. An indemnity value policy insures you for a percentage of your salary, which can be helpful if you have a stable income. If your salary has decreased or increased in the time since you took out your policy, you may receive a smaller or larger payment than you may have done initially.
- Agreed value policy. Typically the more expensive option of the two, an agreed value policy offers coverage for a portion of an agreed dollar value. This type of policy tends to be better suited to those with a less stable income.
How can you find out what type of insurance protection policy you have?
The easiest way to find out what type of insurance protection policy you have is to refer to your policy certificate or schedule. This document outlines the terms of your policy, including the type of coverage you are paying for and any important details surrounding the policy. This information can help to give you an idea of what kind of benefits you may be eligible to receive and in what circumstances they may not be paid.
Are you eligible for compensation?
To make an insurance protection claim, you must be able to prove that your disability or illness has affected your ability to work and earn an income. Medical evidence is often required to do so. The disability or illness that you are experiencing does not need to have been acquired while at work, with your eligibility and the amount of compensation you will receive typically determined by the type of cover that you have.
What is the waiting period for insurance protection?
You get to choose your waiting period for a claim when you take out income protection insurance. Usually, the waiting period for your insurance claim would be between two weeks and three months. If you pass the waiting period and you’re still unable to work, you will have to prove to insurers that the reason you are unable to work is because of illness or injury.
How long will insurance protection benefits be paid?
Insurance protection benefits are typically paid monthly for a specified period of time, as outlined within your insurance policy. The benefit period can vary, although most policies provide coverage for two or five years, or up to a certain age.
In some circumstances, your claim may be reviewed monthly to ensure that you remain eligible to receive benefits. This may involve filing regular doctor’s reports or undergoing periodic independent medical examinations as required by your insurance provider.
How much will you receive when you make an insurance protection claim?
The amount that you may be eligible to receive from an insurance protection claim will vary depending on the coverage outlined in your policy. Some policies may only cover your base salary, with penalties, overtime and some allowances excluded from the total payment value, while others may exclude certain medical conditions from coverage.
In some circumstances, a policy may only allow benefits to be paid if you can’t perform your usual job, while others may pay if you are unable to work in any occupation that is related to your experience or education. Some insurance protection policies may also include offset clauses, meaning that if you receive Centrelink benefits, WorkCover payments or other forms of income, your benefit may be reduced.
How can you use insurance protection benefits?
The payments provided by a successful insurance protection claim can be used however you choose. Depending on your circumstances, you may choose to use it in the following ways:
- Paying off your mortgage
- Paying off your credit card and other similar debts
- Purchasing groceries and other necessary spending
- Maintaining your standard of living
- Keeping up with school fee payments
- Helping you with your recovery costs
How can What’s My Claim Worth help?
What’s My Claim Worth legal partners in NSW work on a No Win, No Fee basis meaning that you only pay legal fees if your case is successful and you receive your claim. What’s My Claim Worth can get you the legal representation you need to make your insurance protection claim. Superannuation funds and insurers are notoriously difficult for self-represented claimants to navigate, which is why we have partnered with the best lawyers in NSW to get you the result you deserve.
If you do win, there are, of course, costs involved. What those will be depends on the costs of the claim lawyer you work with and their solicitor’s fees and disbursements. This is an important conversation to have when you begin discussing your case.
Why Choose What’s My Claim Worth?
What’s My Claim Worth works to connect you with our network of specialist lawyers who can work with you to get you the best outcome — No Win, No Fee (excluding defendant costs if the claim is litigated).
Frequently asked questions
Does income protection insurance cover the loss of a job?
Income protection insurance does not typically provide any form of cover if you quit your job or are made redundant. It tends to only provide income protection if an illness or disability prevents you from performing your job.
What does income protection insurance not cover?
Although there may be variations in what an insurance provider will and won’t cover, you might not be covered if you have certain pre-existing medical conditions, are considered to be well enough to perform your usual job or are injured under certain circumstances. It’s best to refer to your insurance policy or chat with our team to determine whether you are eligible to receive benefits.