Having the right insurance is important to help make sure you are financially supported if you were to stop working from either an illness or injury, or to die. Just like you take out insurance to protect your home and car, it’s important to consider whether to have insurance for your most valuable asset - cover your life and income.
The main insurance types of cover to know about and consider:
Pays a benefit to your dependants, estate, or legal beneficiaries if you die.
Advantages - Helps to ease financial stress on your loved ones by paying money in a lump sum should the unexpected happen to you.
Pays a benefit if you’re unable to ever work again due to injury or illness.
Advantages - Helps by paying money in a lump sum which you can use to cover the costs of care, rehabilitation, loan repayments and future costs involved with day-to-day living expenses.
Pays a benefit if you’re medically certified as likely to die within 24 months—applies if you have either life cover or TPD.
Advantages - Helps to ease some of the financial stress on your loved ones by providing money in a lump sum which you can use to help with medical treatment and future support for your family.
Pays a replacement income, typically a percentage of your income, if you’re temporarily unable to work due to illness or injury. You can generally only claim on one IP policy so you should check if you have other IP cover elsewhere.
Advantages - Helps if you become injured or ill (inside or outside of work) and can’t work temporarily. It provides temporary payments to assist you to meet your day-to-day living expenses while you’re not earning an income.
Pays your super contribution amounts while you’re receiving an Income Protection claim up to 15% of your monthly income.
Advantages - Helps by making contributions usually paid by your employer to make sure your super grows when you’re not working.
For more information about these contact us or contact your financial adviser.
Benefit payment period - the maximum amount of time that a benefit may be paid for.
Inactive account - super account that hasn’t received a contribution or a rollover for over 16 months.
Life events - significant life events such as, completing university, getting married or divorced, having or adopting a child and taking out a mortgage or loan. You may need to review your insurance when a life event happens to you to make sure your life insurance cover, and the amount of insurance cover, meets your changing financial protection needs.
Beneficiaries - when you pass away, your super can be paid directly to certain eligible dependents or your legal personal representative. You can nominate who it will be paid to by completing a binding, non-binding or reversionary nomination. You can view the Nominate a beneficiary for your super section for more information.
Occupation Rating - the rating that applies to your occupation which is determined not by job title but by duties that are carried out. It’s important to make sure your occupation rating is correct (particularly if you change jobs or roles) because it could impact your insurance and the premiums you pay. An incorrect occupation rating classification or employment status may impact your eligibility for insurance cover. It could also mean that you’re paying incorrect premiums for your insurance cover – particularly if your occupation is classified as special risk or not insurable. If you change the work you’re doing, you should also make sure your occupation rating is up to date – it’s your responsibility. Visit mlc.com.au/occupation or call us to check your details are correct.
Premiums - the cost of insurance paid typically on a regular basis to pay for insurance cover.
Underwriting - Insurance cover can be automatically provided without evidence of health or medical information. On the other hand, “underwriting” refers to insurance that is provided only after an assessment by the insurer based on individual personal, employment and health information. The amount and type of insurance cover that the insurer is prepared to offer and the cost of the insurance is based on the level of risk to insure you. Once you have been through the underwriting process, the insurer will be able to decide whether or not to provide you with insurance cover, what type, and how much.
Uninsurable - when the insurer determines that a member's individual circumstances mean the risk of providing insurance cover for them is too high, mainly due to employment or health reasons and so insurance cover is unable to be provided. If you move from an insurable to a not insurable occupation rating classification, you’ll generally only keep your Death & Total Permanent Disablement insurance cover and you may lose any Income Protection cover you have. If your occupation rating falls into a not insurable category, any claim you make will be declined even if you’ve paid premiums. See also "underwriting".
Waiting period - the minimum time period you must wait before you start receiving your benefit payment, for example 30, 60 or days 90 days.