Income protection claims – The essentials you need to know
Published on July 28, 2023 by Thomas Felizzi
Life can be unpredictable, and unexpected circumstances can sometimes disrupt your ability to earn an income. In such situations, having income protection insurance can provide a crucial safety net. If you find yourself unable to work due to illness, injury, or disability, it’s essential to understand the process of bringing an income protection claim. In this article, we will guide you through the key steps involved.
What is income protection insurance?
Income protection insurance provides you with an income stream when you can no longer work due to illness or injury. It is a regular payment usually paid monthly and while you can’t work. Many Australian workers now have income protection insurance, and it can be purchased directly from an insurer or through your bank or obtained through your superannuation fund.
How does it work?
Generally, income protection will cover you for about 75% of your pre-injury salary. The frequency of payments, age limit restrictions and the length of your entitlement will vary depending on your specific policy.
There is usually a waiting period that can vary from two weeks to three months and the payment will be for a set time period, usually 2 years, 5 years or until you reach 65 years of age i.e. retirement age.
Income protection payments will usually be reduced by any other income you might receive such as social security payments or workers compensation payments.
Understand your policy
To bring a claim, you need to start by reviewing your income protection insurance policy. Your policy will explain your coverage details, waiting periods, benefit amounts, and any exclusions or limitations that may apply. You need to pay close attention to the definition of ‘disability’ or ‘inability to work’ as stated in your policy, as this will determine your eligibility to make a claim.
Notify your insurer
Once you are satisfied that you will meet the criteria set out in your policy, you should promptly notify your insurance provider. Most policies have specific notification requirements, so be sure to follow them correctly. Contact your insurer’s claims department and inform them of your situation, providing any necessary documentation, such as medical reports or accident reports, to support your claim.
Complete the claim forms
Your insurer will provide you with the necessary claim forms to initiate the process. Take the time to carefully read and complete the forms, ensuring that you provide accurate and comprehensive information. You should include details about your injury, illness, or disability, along with any supporting documentation or medical evidence that validates your claim.
Seek medical evidence
Medical evidence plays a critical role in supporting your income protection claim. You should consult your treating doctor and request a detailed medical report that outlines your condition, your prognosis, and the impact it has on your ability to work. This report should clearly demonstrate that you meet the policy’s definition of disability or inability to work. Initially, the insurer will require specific claim forms or reports to be completed by your treating doctors to commence your claim. Normally, these forms will need to be completed by one of your treating doctors on an ongoing basis.
Review the decision
Once your insurer has reviewed your claim, they will make a decision regarding its approval or denial. If your claim is approved, you will receive regular benefit payments as outlined in your policy.
In the event of a denial or dispute, you need to carefully review the reasons provided by your insurer. If you believe the decision is incorrect or unfair, you should seek legal advice. You can also contact the Australian Financial Complaints Authority (AFCA) to explore your options for dispute resolution.
Navigating the income protection claim process can be complex, particularly if you encounter a dispute. You should consider seeking professional advice from an expert. They can provide guidance, review the policy and your medical evidence, and help you understand your rights and options. If you are considering making a claim, we recommend you seek advice from a lawyer as soon as possible, if not before making the claim, and you can contact us at Carroll & O’Dea Lawyers on 1800 059 278 or via our Contact Page and one of our lawyers will assist you.