How does Income Protection insurance work & what does it cover?

NobleOak’s Income Protection Insurance helps replace some of your income if you are unable to work due to sickness or injury. But how exactly does it work and what does it cover? Find out more in our guide.

Who should consider Income Protection insurance?

Income Protection insurance may be relevant for:

• Parents or guardians who provide for children (dual/separate households)
• Primary income earners in a household
• Self-employed individuals and business owners, freelancers and contractors
• SMSF (self-managed super fund) holders

You can apply for Income Protection insurance with NobleOak if you’re aged between 18 and 60 years of age, and you’re working at least 20 hours per week.  Cover is guaranteed until your 65^th birthday.

What does this mean?

​​Having this type of cover in place means that some of your income will be replaced if you’re unable to work due to sickness or injury. Your monthly benefit payments may help replace some of your income that you relied on to help pay for things like:

• rent or mortgage payments
• bills and everyday living expenses
• additional medical expenses you or your family might have
• meet education costs such as school fees for your children

What does NobleOak’s Income Protection insurance cover?

NobleOak’s Income Protection Insurance pays a monthly benefit of up to 70% of your regular pre-tax income for the first $25,000 (up to $300K pa) if you can’t work due to a serious illness or injury.

When you apply, you’ll have:

• A choice of benefit periods when you apply (1 year, 2 years, 5 years and 10 years or until age 65).
• A choice of waiting periods when you apply (30, 60, 90 or 730 days) to determine how soon after becoming unable to work, your benefits begin.

If you claim, you’ll receive:

• Ongoing monthly benefit payments to help replace your income and help cover living expenses while you’re unable to work.
• Rehabilitation support and programs to help you return to work.

What does NobleOak’s Income Protection insurance not cover?

NobleOak’s Income Protection Insurance generally does not provide coverage for:

• Pre-existing conditions: Illnesses or injuries that existed that you were aware of before taking out the policy (unless disclosed and accepted)
• Intentional self-inflicted injuries: Harm that is caused deliberately
• Unemployment or redundancy: Our Income Protection insurance only covers loss of income due to illness or injury, not job loss
• Pregnancy and childbirth: Unless there are complications that result in an inability to work beyond standard recovery
• Injuries from criminal activities: If you’re hurt while engaging in illegal acts
• Disqualified or de-registered from your profession or industry
• High-risk activities: Some extreme sports or dangerous hobbies may be excluded as a result of our underwriting process

Monthly Benefit amount

The ‘Monthly benefit amount’ is the amount of money you will receive while you’re unable to work due to a sickness or injury. This will usually be calculated at a percentage of your pre-disability income, meaning the insurer will pay you this percentage of what you earned before you were injured, up to a maximum amount.

For example, someone may be insured for $7,000 per month, or up to 70% of the first $25,000 of regular income, calculated on the average 12 months prior to your disability date.

This monthly benefit amount will reduce once you have been on claim for a period of time.  After 2 years (if you have taken out a 10-year benefit period or ‘up to age 65’ benefit period product) this will reduce by 1/7^th.  Therefore, $7,000, will become $6,000.

Other reductions to your monthly benefit will take into account if you receive other income. This does not include passive income.

How does Income Protection work?

Here’s a quick overview of how it works:

Completing an application:

If you’re applying for Income Protection Insurance with NobleOak, you can start the application process by calling 1300 041 494 or applying online. During the application process, we take the time to get to know you upfront which enables us to be clear on what you are and aren’t covered for. That can give you more certainty at claim time. We only ask for what is required to give you the best terms.

Choose your cover:

You will be asked to select an amount of cover. This is known as your sum insured (you can choose up to 70% of your regular income). You’ll then be asked to select a waiting period (how long before payments start; this can be 30, 60, 90 or 730 days), and a benefit period (how long you want payments to last if you claim; this can be 1, 2, 5, 10 years, or up to age 65).

Usually, the longer the waiting period and the shorter the benefit period the less expensive your premiums will be. The sum insured and factors like your age/occupation are factors considered on the premium you will pay.

Paying premiums:

Once your policy has been approved, you will need to pay monthly or annual premiums to keep your policy active. These premiums are known as variable age stepped premiums. This means as you get older, premiums will increase.

Making a claim:

If you become unable to work due to illness or injury, you can make a claim and we will help and support you through this difficult time. When on claim, you’ll receive a monthly benefit if you are totally or partially unable to work for the benefit period you have selected, as long as you remain unable to work due to your injury or illness or until your benefit period ends.

In the event of a claim, the first step is to call us on 1300 551 044. The NobleOak claim team will then send you a claim form for you to complete, which will ask for details about your disability. To support your claim, you’ll need to provide supporting documents such as medical evidence and proof of income. The NobleOak team will help you with this process and will get in touch with you if we need any further documentation.

Next, we will review your claim to determine whether you’re eligible to receive benefits. During this process, we might consult with your doctor to get a clear picture of your medical status. There may be other information we need; we will keep you fully informed throughout the process and ensure we stay in close contact with you.

Once your claim has been reviewed, your claim will either be approved, pending further information or denied. If approved, you will start to receive payments after the waiting period you have selected.

If you’re on claim, helping you return to work:

Once you’re fit to work again, payments will stop, but your cover remains in place for future claims, as long as you keep paying your premiums.  We also have various benefits available within NobleOak’s Income Protection Insurance to help you recover, provide a program for rehabilitation or help you transition to another occupation.

Other Benefits

Future Insurability

You can increase your cover without further underwriting if you meet certain ‘life event’ scenarios.  A maximum of $2,500 applies for each increase and you can only do so once in a 12-month period.

No switch Total Disability cover

This means that if you have long term Income Protection such as cover with a 10-year benefit period or to age 65 and you need to claim and are totally disabled due to a sickness or injury, you are always assessed against your own occupation rather than any occupation.  This means if you are on claim for a long time, your definition will stay the same. This provides security and fairness for you no matter how long you are on claim.

Help to manage premiums when most needed

Features like Premium Pause (if involuntarily unemployed) and Waiver of Premium (whilst on claim) are available to help you manage your premiums during difficult times.

Award-winning Income Protection insurance

At NobleOak, we’re happy to help you get the coverage you need. Our award-winning team is here to help. Call us on 1300 014 494 or use our online quote tool to get started.

Any financial product advice is general in nature only and does not take into account your individual circumstances, objectives, financial situation, or needs. Before acting on it, please consider the appropriateness of the information, having regard to those factors. Any third party websites or tools referred to are subject to their own terms and conditions and NobleOak Life Limited makes no representation or warranty as to any information on those websites. Persons deciding whether to acquire or continue to hold life insurance issued by NobleOak Life Limited should consider the relevant Product Disclosure Statement and Target Market Determination for the product. NobleOak Life Limited ABN 85 087 648 708 AFSL 247302.