| Income Protection is a vital part of any insurance | | | | that we put in a claim for income protection as he |
| program. It provides income at a time when you are | | | | was in my view eligible to claim. |
| not able to physically work to generate income. | | | | I informed Darryl that he should have called me |
| We have summarised 3 actual client situations which | | | | before using up his annual leave and that if he was in |
| demonstrate how income protection policies can be | | | | the care of a doctor (due to stress), and not |
| undervalued by people. | | | | working that we should submit a claim with the |
| Case Studies | | | | insurer. |
| 1. Couldn't see the value in his income protection. | | | | Darryl went on claim immediately for nearly a year. |
| Tom aged 42, had an accident involving a knife in his | | | | He received over $50,000 in benefits plus his |
| kitchen while preparing lunch which put him in hospital | | | | premiums were waived whilst he was on claim. |
| initially for 2 weeks. | | | | The simple message is that if you have a policy talk |
| As a self employed landscape gardener he was | | | | to your adviser before doing anything in haste. |
| unable to do any work while his leg was healing. | | | | 3. Claiming a tax deduction for income protection |
| He had another set back which saw him go back into | | | | premiums. |
| hospital for another operation. | | | | Katrina is a long standing client of our business and |
| In total, this freak accident cost Tom 4 months off | | | | despite being involved in the accounting/finance area |
| work. | | | | had forgotten to claim her income protection |
| When Tom called to claim on his income protection | | | | premiums as a deduction against her personal income. |
| policy, he said "I was going to cancel this policy last | | | | When conducting her annual review, we found that |
| year because I thought it was a waste of time - I | | | | Katrina had not claimed this particular item over 5 |
| am now so thankful that I didn't". | | | | years. |
| Tom claimed on his income protection policy which | | | | We contacted the relevant insurer and gained |
| ended up paying him for 3 months. | | | | premium data for each year for Katrina and she |
| The simple message is income protection for the self | | | | submitted an amended tax return for the previous 5 |
| employed is very valuable. | | | | years and received a handsome tax refund. |
| 2. Going to cancel policy - unable to afford the | | | | The simple message is to take advantage of the tax |
| premiums. | | | | deductibility of some elements of insurance. Keep |
| Darryl called our office one morning in quite a | | | | good personal records. |
| distressed state. | | | | Simple Messages |
| He explained that he could no longer afford his | | | | -Make sure that your benefit reflects your current |
| income protection policy and wished to cancel it. I | | | | earnings position. -If you are unsure about the |
| was familiar with his policy benefits, occupation, | | | | benefits - talk to your adviser. -Keep good personal |
| earnings etc and was somewhat perplexed that he | | | | financial records. |
| was contemplating cancelling his policy. I broadly | | | | Remember an income protection policy is NOT set |
| discussed Darryl's situation with him and suggested | | | | and forget! |