Long Term Income Protection…what does it mean? what is the difference between Long Term & Short Term Income Protection or ASU as it’s sometimes known.
You would imagine it is fairly straight forward, well it is if you have been working in the Income Protection sector for as long as we have.
Essentially it does what it says on the tin!
Long Term Protection is an insurance provides you with Long Term protection for loss of income due to Accident or Sickness and Short Term Protection provides the with a short duration of protection for loss of income due to Accident or Sickness.
However, How long is long & how short is short?
In reality it’s the wrong question or the incorrect phrase, Income Protection should not be pigeon holed into these categories. What the industry tries to do is make it easier for you to understand by paraphrasing like this. Income Protection is Income Protection, regardless of whether it insures you for 6 months in a claim or until you reach the Age 70 years.
In essence Income Protection provides you a monthly amount in cash flow known as "Benefit Amount" for a period of time, the minimum period of time you can get paid out for is six months, the maximum period you can get paid out is until age 70.
A majority of insurers will cover you until your age of 65 years and some offer until the age of 70 years. As you would expect there is a cost implication, the longer the plan pays out for, the higher the monthly cost.
So instead of asking “Do I want Short or Long Term Income Protection or Long Term Income Protection”, What you should be asking yourself when you are researching or buying Income Protection is 2 key questions:
1) How quickly do I want the plan to start paying out, for example, (If you have had an accident or sick, how long do you need to be signed off work before your claim starts paying out). Is it after 3 days, 1 week, 2 weeks, 4 weeks, 3 months or 12 months?
2) How long would like the benefit amount to be pay out for, for example, (if you are signed off work due to accident or Sickness how long do you want to receive your money for). Is it 6 months, 12 months, 2 years, 5 years 10 years, 15 years or until age 65 or the maximum age of 70?
The choice really is yours, we will cater for your different choices and provide you with what suits your own individual circumstances, preferences and budget.
So it’s not Short or Long Term Income Protection that you want, it’s “Income Protection” that you want….
Best Insurance specialises in Income protection, it’s what we do day in and day out and have done for the last several years, it’s what we are passionate about...