Income Protection Insurance Waiting Periods Explained

If you get sick or injured and can’t work, Income Protection insurance can help pay your bills. But before payments start, you’ll need to wait for a certain amount of time. Income Protection waiting periods determine how soon you get financial support from your insurance policy, and affect how much you pay in premiums.

Here, we’ll explain what a waiting period is, how it works with NobleOak’s Income Protection Insurance, and how to choose the best option for your needs.

What is a waiting period in income protection insurance?

The ‘income protection waiting period’ refers to the number of days you have to wait before you start receiving benefits from your insurer.

With NobleOak, you can choose a waiting period of 30, 60, 90, or 730 days. Generally, the longer the waiting period you choose, the lower your premiums will be.

There are some important rules to keep in mind:

• The waiting period starts on the day you become unable to work.
  You won’t receive payments during this time, but once the waiting period ends, benefits begin.
• If you return to work or are able to work more than 32 hours during any five-day period within your waiting period, the clock resets.

You can explore more details in our Product Disclosure Statement (PDS).

Real-life scenarios

Let’s walk through some examples of Income protection waiting period options in action:

Sarah, a physiotherapist, chose a NobleOak Income Protection policy with a 90-day waiting period.  Because she was an employee of a business, she had sick leave accrued to help tide her over if something was to happen to her and she couldn’t work. When she hurt her back and couldn’t work, she was able to take some sick leave and still receive some income until her NobleOak policy payments kicked in. Also, the other good news was that even in the waiting period, she was able to access her Rehabilitation Program Expenses Benefit straight away. This funded occupational rehabilitation so she was able to start her recovery sooner funded by NobleOak.

Amed, a wedding photographer who works for himself, picked NobleOak’s 30-day waiting period as he knew that if he couldn’t work, he would need assistance fairly quickly – given he didn’t have an employer, and his job was quite physical. When he developed a serious illness, his benefits started just 30 days after he couldn’t work anymore. This helped him keep his business running while he recovered.

How waiting periods work

Here’s how NobleOak’s Income Protection waiting period options work:

1. You can choose how long your waiting period will be: 30, 60, 90 or 730 days.
2. Your waiting period starts on the day you can’t work anymore.
3. There are some conditions around how the clock resets for being eligible for a payment. You must remain either totally disabled or partially disabled through this period. If you return to work or are capable of working more than 32 hours in 5 consecutive working days during the waiting period, the waiting period starts again.
4. You won’t get any insurance payments during the waiting period – you’ll need to use sick leave, savings, or types of support. However, you may be able to access NobleOak’s Rehabilitation Program Expenses Benefit to help you to recover faster.
5. After your income protection insurance waiting period ends, your payments will start. They’ll continue until you recover or reach the end of your payment period. They may reduce down over time if you were able to start working part time over this period.

For example, with a 90-day waiting period, if you become disabled on January 1st, your payments would begin on April 1st, as long as you remained unable to work for those 90 days.

How to choose the right waiting period

Choosing the right waiting period comes down to your personal situation. When deciding between income protection waiting period options, it’s a good idea to think about:

• Access to leave: You might have sick leave or annual leave that could help you when you’re unable to work. If your employer offers generous leave, a longer waiting period for income protection insurance could make sense.
• Superannuation insurance: If you already have salary continuance cover through your employer or super fund, you might consider income protection insurance with a 2-year waiting period (730 days). You’ll have lower premiums now and protection after your current coverage expires.
• Financial buffers: Do you have enough in savings to get by for a few months? If so, you might feel comfortable choosing a longer waiting period to reduce your premiums. But if your emergency fund is limited, a shorter waiting period could help you access benefits sooner and stay on top of bills.
  Monthly budget: How long could you cover your living costs without your regular income? Think about rent or mortgage payments, utilities, groceries, debt repayments and other everyday expenses. If you’d struggle to keep up, a shorter waiting period could be a good idea.
• Job stability: If you’re self-employed, work as a contractor, or if your job is physically demanding, you might be at higher risk of injury or income gaps. In these cases, a shorter waiting period can provide faster support when you’re unable to work.

Waiting period vs benefit period: what’s the difference?

Every income protection policy includes two elements:

• Waiting period: The time before payments start. With NobleOak, you can choose between 30, 60, 90, or 730 days
• Benefit period: The benefit period is how long those payments will continue – usually for 2 years, 5 years, or until a certain age, depending on your policy.

For example, you might choose a 30-day waiting period with a 5-year benefit period. This means your payments would start 30 days after you become ill or injured and could continue for up to 5 years if you remain unable to work.

Award-winning income protection insurance

NobleOak’s award-winning Income Protection Insurance offers some of the most flexible waiting period options in the Australian market and fully underwritten cover. That means greater certainty at claim time and support you can count on.

Take the first step toward protecting your income through income protection insurance by starting a quote today.

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.