Life has a way of throwing things at you that you least expect it. In some instances, those could be situations that leave you ill or injured and unable to work. While health insurance coverage will pay for your medications and the like, what will you do about protecting your income in this situation? Income protection insurance offers the coverage you need, but there are several things you’ll need to know before jumping in feet first.
What Are Exclusions?
Wondering if there are any exclusions that apply to income protection insurance? The answer to that question is yes. However, the specific exclusions will vary depending on a number of different factors. One of those is the insurer you work with. The other will be the type of plan you choose, followed by the amount you agree to pay in fees. Generally, more expensive plans have fewer exclusions than less expensive plans do, but that’s not necessarily set in stone.
Exclusions are exactly what they sound like – situations that your insurer will not cover. In these instances, you’re essentially paying for insurance coverage that you cannot use.
What Are Some Common Exclusions to Income Protection Insurance?
While the specific exclusions on your policy will vary depending on the insurer in question, there are some pretty standard ones that apply virtually across the board. One of those is that the insurance will not pay out if your illness or injury was the result of a self-inflicted act (a suicide attempt, for instance).
Second, most insurance policies will not pay out if you are out of work due to an issue that is related in any way to an injury or trauma sustained during war/combat, or “acts of war”. Finally, income protection doesn’t come into play during childbirth or pregnancy, unless there is a medical complication.
In addition to those three, there are several other common exclusions. For instance, if you are out of work due to an injury or illness that relates to a pre-existing condition or injury, you will not be covered. If you are missing work due to a chronic condition, you will also not likely be covered. Some insurers will also not cover you if you have had any responsibility in making yourself unemployed or “redundant” in the workplace.
Some insurance companies will not cover you if the illness or injury is the result of taking illegal drugs, unless the drugs were prescribed by your physician, and in no way related to drug abuse or adduction. Alcohol-related illnesses and injuries are not covered, nor are injuries or illnesses sustained while involved in any type of criminal or illegal activity.
The best way to determine what specific exclusions apply to you is to read the fine print on your income protection insurance policy, or to speak with Insurance Focus who are qualified financial planners. In some instances, you may find that moving to a more expensive plan will negate some exclusions, but this is not always the case.