Frequently Asked Questions
Mortgage Protection and Corana Virus?
You will be asked additional questions in relation with your health. This is a moving target and changing weekly. Some industries are being excluded from getting income protection and others are having temporary limitations set. The best thing to do is to book a time with a financial adviser to discuss. You do this here
Is Income Protection/Mortgage Protection Redundancy cover?
Income Protection is not redundancy insurance. Redundancy cover is taken out separately and generally has a 6 month stand down and only pays for 6 agreed amounts should you be made redundant.
Are my income protection/mortgage protection premiums tax deductible?
Generally speaking, if your benefit payments are tax assessable, then your premiums are tax deductible. With agreed value there’s veering opinions on this as many deem agreed value as a non-taxable benefit therefore not tax deductible. In general terms MRI (Mortgage Protection Insurance is deemed as agreed value) We would recommend seeking advice form a financial adviser or accountant.
How important is Disclosure?
If anything was going to negate the good intentions of securing insurance, it would be non-disclosure.
It is imperative that when you apply for insurance, you disclose all necessary medical and dangerous pursuit information on your application form. From your application form, an underwriter from the insurance company will look at the risk of offering you insurance and determine whether they need to exclude any medical conditions or dangerous pursuits. For example, if you have suffered from mental health in the past, you may get an offer from an insurer with a mental health exclusion which essentially means that any future claim you make will be denied should it be caused by mental health issues.
By disclosing all relevant medical conditions and dangerous pursuit information you can get a clear idea of what you will and will not be covered for in the future because in the event of a claim, the insurer may seek medical notes from your doctor to check if you knew about your condition when you first applied for cover.
Can I save on my ACC levies if I’m self-employed?
Did you know that you can choose how much cover you have under ACC? A little-known option with ACC is to switch to an ACC product called Cover Plus Extra.
Cover Plus Extra allows you to choose the amount you are covered for in an accident, and therefore reduce your ACC levies. As of this year, the minimum you can dial down your ACC cover to is $29,453. The theory behind reducing your ACC cover with Cover Plus Extra is that this then allows you to redirect your levy savings towards personal income protection which covers you in the event of both and accident and an illness.
Note that we recommend speaking to a registered or authorised financial adviser before altering your ACC product.
What are wait periods for Mortgage Protection Insurance?
When buying income protection, you will have the option to select how long you want to wait to receive a benefit from the insurer in the event of a claim. In general, the longer the wait the cheaper the premium. Most insurers will offer wait period starting from four weeks and go all the way up to two years.
Most insurers will offer wait period starting form four weeks and go all the way up to two years.
When deciding on your wait period it is important to think about how long you could survive without your income coming in. For most people, this would be around two to three months before they started to struggle financially.
Note that an insurer will allow you to decrease the waiting period on your income protection without having to submit a new application. However, if you want to increase your waiting period down the track, you will need to submit a new application to your insurer and there is a chance your health status may have changed, and your application will be denied.