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Stood down? Your income protection won’t stretch that far
Anyone who has been stood down or retrenched in this downturn is unlikely to have the type of income protection that would see them compensated for their loss, a lawyer has warned while still touting the benefits of the insurance type.
Stood down? Your income protection won’t stretch that far
Anyone who has been stood down or retrenched in this downturn is unlikely to have the type of income protection that would see them compensated for their loss, a lawyer has warned while still touting the benefits of the insurance type.
Slater and Gordon’s Sarah Snowden is a superannuation state practice group leader who has flagged income protection “as an important type of insurance” despite conceding that just a third of working Australians actually have the insurance”.
With more people staying at home due to COVID-19, the lawyer said many have found the time to review their superannuation memberships and entitlements, and the law firm has seen an increase in income protection enquiries as a result.
She commented that this has resulted in people identifying potential entitlements that they didn’t know they had: “For those that are off work due to COVID-19 illness, they may have an entitlement subject to the waiting period on their policy.”
In addition, “for those not injured in a motor vehicle or workplace accident (where statutory schemes such at Workers’ Compensation or Motor Vehicle Accident schemes don’t apply), and they become ill and cannot work, having this type of insurance can enable them to focus on their health and recovery without the additional financial burden”.
However, even where individuals do have income protection, Ms Snowden warned that “many do not have a sufficient level to protect their current financial obligations”.
In addition, “anyone who has been stood down or retrenched is unlikely to have the type of income protection needed for these scenarios”.
For anyone who is wanting to check in with their super fund provider to enquire about what is included in their superannuation and what they are protected from, if they are protected at all, Ms Snowden said that even barring current changes to work patterns, “obtaining the relevant information on insurance benefits for our clients has been an efficient process, despite super fund employees working from home”.
She said for the most part, “the communication coming from the majority of industry super funds has been great”.
“There are exceptions to this, and we generally face greater difficulty with retail super funds and claims being dealt with directly by an insurer,” the lawyer continued.
“The hurdle for us has been dealing with those funds and their insurers that have not adapted their processes and technology capabilities to accommodate the current circumstances of their members. For example, some are still wanting original documents or certified ID, which is difficult, particularly for those members that are extremely unwell and considered high risk when it comes to COVID-19,” she outlined.
nestegg has previously asked the question: Will my income protection insurance cover COVID-19?
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