Enjoy sports at a recreational or amateur level? Learn why income protection is worth considering.
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What is income protection?
Income protection insurance provides a monthly benefit of generally 75% of your average salary should you be unable to work due to a serious illness or injury. It provides the assistance you need to keep on top of your ongoing financial commitments, such as paying your rent or mortgage repayments, groceries, bills and other expenses.
There are several factors you need to consider when choosing an income protection policy, one being the subject of this article – income protection for sports players.
Back to topDoes income protection cover injuries sustained from sports?
Quick answer: Yes
It is important to note that your participation in certain types of sports and/or hazardous activities generally has an effect on your income protection application. If these activities increase your likelihood to claim, your insurance provider may place a special provision on your policy, in the form of a premium loading, exclusion or extended waiting period.
Loading
A premium loading is applied to reflect an increased risk of claim, which could either be a percentage of as much as 25% or a specified dollar amount for every thousand sum you wish to insure. So, if you participate in sporting activities that are considered to be high risk, you can expect to pay higher premiums rates.
Exclusion
An exclusion is a restriction placed on a specific condition and/or event where a benefit will not be paid. If you have suffered an injury in the past from playing sport, your insurance provider takes into consideration the following:
- the nature of your injury and degree of severity
- when the injury occurred
- the time it took for you to recover
- whether or not you continue to participate in this activity.
If your insurer finds that it is likely you will suffer the same injury, an exclusion may be applied to your policy.
Extended waiting period
Your insurance provider may apply an extended waiting period instead of excluding injuries that are the result of sporting activities. As an example, if you have selected a 30-day waiting period, your insurance provider may offer you cover but with a waiting period of 90 days for any injuries sustained whilst participating in a particular sport.
It is important to note that not all applicants are offered a special provision on their income protection policy just because they play sport or have suffered a sporting injury. You insurance provider may offer standard terms or ordinary rates on your cover if your sports injury was very minor and had occurred a long time ago.
Income protection or workers’ compensation?
Workers’ compensation does not cover any injuries that occur outside of work. So, if you are injured as a result of sporting or leisure activities that you partake outside of work hours, you will not be eligible for any benefit payment under workers’ compensation.
Back to topJohn was a 32-year-old landscaper. His wife Louise, aged 30, worked part-time as a receptionist at a local law firm. They had two daughters, aged five and two.
Since John and Louise had just purchased their first home, they had to pay closer attention to their monthly budgeting to keep on top of the mortgage repayments and daily living expenses.
John enjoyed spending some of his Sundays dirt biking near his friend’s property, a couple of hours drive from his home. While riding one morning, John had hit a small jump with too much speed and cleared the down ramp landing in flat ground, fracturing his spine.
This injury forced John to take three months off work and undergo rehabilitation twice a week. With no income protection plan in place, John received no income over the three month period and since he was self-employed, he was not entitled to sick leave pay. He was forced to borrow money from his older brother just to keep on top of the rehabilitation fees, mortgage repayments, school fees and other day-to-day expenses.
How amateur and semi-professional sports affect income protection
The following table shows the special acceptance terms that are applicable on your income protection application with Australian providers when you disclose your sporting activities. Rugby league, rugby union, Aussie rules, soccer and touch football will be used as points of reference.
| Insurance Provider | Football - Rugby League, Rugby Union, Aussie Rules/AFL (Amateur) | Football - Rugby League, Rugby Union, Aussie Rules/AFL (Semi-Professional) | Soccer (Amateur) | Soccer (Semi-Professional) | Touch Football |
|---|---|---|---|---|---|
| AIA | Acceptance term - 25% premium loading or 90 day exclusion period. | Acceptance term - 25% premium loading or 90 day exclusion period. | |||
| AMP | Standard rates | Cover may be offered based on your individual case | Standard rates | Cover may be offered based on your individual case | |
| Asteron | Acceptance term - 25% premium loading or 90 day exclusion period. | Acceptance term - 25% premium loading or 90 day exclusion period. | |||
| BT | Acceptance term - 90 day exclusion period. | Limited cover may be considered | Acceptance term for outdoor soccer - 25% premium loading or 90 day exclusion period. | Limited cover may be considered | |
| Comminsure | Acceptance term - 30 day extended waiting period (recreational only), or 25% premium loading or 90 day extended waiting period (recreational with participation in competition) | Acceptance term - 30 day extended waiting period (recreational only), or 25% premium loading or 90 day extended waiting period (recreational with participation in competition) | |||
| MLC | Acceptance term - 25% premium loading or 90 day exclusion period. | Limited cover may be considered | Standard rates | Limited cover may be considered | |
| NobleOak | Standard rates | Cover may be offered with additional loading | Standard rates | Cover may be offered with additional loading | |
| OnePath | Cover may be offered with full exclusions | Cover may be offered with full exclusions | |||
| TAL | Acceptance terms will depend on the your occupation and your choice of waiting period, as the following:
| See acceptance terms of Rugby League, Rugby Union, Aussie Rules/AFL for amateur players | |||
| Zurich | Acceptance term - 25% premium loading or 90 day exclusion period. | Acceptance term - 25% premium loading or 90 day exclusion period. |
Please note that this information is correct at the time of writing (November 2013) and is subject to change at any time without notice.
Back to topIncome protection for professional sportsmen
Most Australian insurance providers do not offer income protection cover for professional football players or professional sports players of any kind. However, a small number of providers may consider application for cover on an individual basis.
It may be best to obtain more information from your sporting association and find out whether they have a national insurance scheme agreement in place that provides cover in case of an injury.
In addition, some commercial and general insurance policies may provide cover for loss of income in the event that you are injured and unable to perform your usual sporting activities. However, do bear in mind that these policies may be offered in cancellable basis.
Back to topSecuring an income protection plan to cover extreme sports
If you participate in sports that are considered to be hazardous, specific terms (loading or exclusion) may be applied to your policy or in some circumstances, your application for income protection cover may be denied altogether. The terms and conditions may also vary depending on whether your engagement in this sport is purely recreational or on a competitive basis.
Some sporting activities that may be considered as high-risk include:
- Abseiling
- Caving
- Deep sea or rock fishing
- Diving
- Hang-gliding
- Motor/power boat/jet ski racing
- Motor sport racing - car and motorcycle
- Karting
- NASCAR racing
- Off-road riding
- Trail bike riding
- Road racing
- Mountain climbing
- Skydiving
- Wakeboarding
It is essential to seek advice from an insurance consultant who can provide a tailored recommendation based on your sporting pursuits, especially if you participate in high-risk activities, and help you find cover that matches your needs.
Do I have to tell my insurance provider about my sporting activities?
Yes, and it is crucial that you provide information to your insurance provide if you are playing a sport of any kind, either on a recreational or competitive basis.
Almost all income protection application forms specifically ask on whether or not you currently participate or intend to participate in any sports, including those that are considered to be hazardous.
Back to topUnderstand the terms and conditions of your income protection policy for sports injuries
Applicants that participate in sports that are considered to carry a certain degree of risk may be offered income protection cover with specific terms and conditions in place. The terms and conditions offered may vary depending on:
- The type of sport that you participate in
- Your age
- Frequency of your sporting activities
- Your level of involvement - recreational, competitive or semi-pro
- Other qualifying factors, such as depth, height, distance and speed, with some sports
It is important to have a clear understanding of any special terms that may be offered by your insurance provider in relation to your sporting activities, as this effects whether or not you can claim. If you provide inaccurate information, you are breaching your duty of disclosure and your provider may cancel your policy.
Back to topApply for income protection for sports players
With the comprehensive income protection plan in place, you can ensure that you continue receiving a percentage of your income for a specified period of time if you fall ill or become injured and are forced to take time off work.
There are a number of Australian insurance providers that offer income protection cover to applicants who play sport and provide a benefit payment for injuries sustained during such event. However, the type of sport that you are involved in and on what level may attract specific provisions should your insurance provider decide to offer your cover.
Consider speaking with an insurance adviser who can provide the assistance you may need to secure an income protection policy that offers comprehensive features and provide cover for your sporting events.
