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Waiting Period vs Benefit Period
When taking out an income protection insurance policy, you’ll generally be asked to choose the waiting period and the benefit period. While some people get these confused, they’re two separate things. Although they both have implications at claim time.
The waiting period
The waiting period is the agreed amount of time between when you’re diagnosed with an illness and when a claim can be made. Essentially, a specific time frame needs to be completed before any benefit is paid to the life insured.
If you recover during this time, generally speaking, you won’t be eligible to receive any payments.
Usually, there are a range of options available when it comes to selecting a waiting period. Careful consideration should be put towards deciding what the best waiting period is for you. Remember, you’ll be balancing how long your family is willing and financially able to wait for help, against the cost of the premium required. Generally, the longer the waiting period you select, the lower your premiums will be.
The benefit period
The benefit period is the maximum amount of time you will receive benefit payouts for. For example, if you select a two-year benefit period, payment will continue until either the benefit period finishes, or you recover.
Just like the waiting period, there are usually options available for you to choose. And just like the waiting period, the benefit period will affect your premiums. Generally, the shorter the benefit period you choose, the lower your premiums will be.
Understanding the difference
- What’s the different between income protection through super and standalone policy?
- What is indexation in insurance?
- What is Income Protection Insurance?
AAMI Life Insurance products, other than in some circumstances the Redundancy Benefit, are provided by either Asteron Life & Superannuation Limited ABN 87 073 979 530, AFSL 229880 (Asteron) or by TAL Life Limited ABN 70 050 109 450 AFSL 237848 (TAL Life) which is part of the TAL Dai-ichi Life Australia Pty Limited ABN 97 150 070 483 group of companies (TAL). Both Asteron and TAL Life are part of the TAL Dai-ichi Life Australia Pty Limited ABN 97 150 070 483 group of companies (TAL). TAL companies are not part of the Suncorp Group. TAL companies use the AAMI brand (a Suncorp network brand) under license. Any advice on this page in connection with the Life products is general in nature and is provided by Platform Ventures Pty Ltd ABN 35 626 745 177 AFS Representative Number 001266101 (PV). PV is part of the Suncorp Group and an authorised representative of TAL Direct Pty Limited ABN 39 084 666 017, AFSL 243260 (TAL Direct). General advice does not take into account your individual needs, objectives or financial situation. Before you decide to buy or to continue to hold a Life Products you must read the relevant Product Disclosure Statement.