Is there benefit to seeing a broker to get Income Protection?
Finding the right income protection policy for your needs is no easy process. With literally hundreds of policies on the Australian market with different features and benefits on offer, finding the one that will accommodate for your current and future needs and give you the right level of protection can be daunting. An insurance broker can assist people find the right policy by comparing the market for them based on their current needs. A broker will explain the different features available on the policy help the buyer through the application process step by step.
How can an income protection insurance broker help?
Why should I get an income protection insurance broker?
Income protection will cover you and your dependents if you’re unable to work as a result of injury or illness. This is usually offered as part of life insurance, but is also available by itself. This is an important investment because everything else depends on you maintaining your livelihood and earning ability, so it’s important to get the best income protection insurance there is. Income protection insurance will cover you and your family if you’re unable to work, either temporarily or permanently. Income protection insurance brokers will:
- Negotiate with insurance companies on your behalf to get better prices and better coverage than you could by yourself.
- Find a customised insurance plan, or negotiate with insurance companies directly to create a custom plan with everything you need and nothing you don’t.
- Check on smaller insurance companies that are hard to find, and you might not know exist. Insurance brokers know them and consider these alongside the big brands.
- Answer any questions you have in easy to understand ways so you know exactly what you’re getting.
- Stay impartial. As an independent outsider their only incentive is to find you the best plan at the best price. You can also find insurance brokers that work with one particular insurance company to get you a custom plan, but this will always be made disclosed to you.
- Offer professional advice if you’re not sure which features are best for your situation. They’re able to take you through everything from start to finish.
- Help you make claims by letting you know what you need and liaising with the insurance company on your behalf.
Insurance brokers work directly with insurance companies to get policies that aren’t usually available to the general public. These policies might have lower premiums, better coverage, or specific benefits that you want but can’t otherwise get at such a good price. In short, income protection insurance brokers are professional insurance policy finders.
What can income protection insurance brokers do?
Beyond simply getting good policies, insurance brokers can offer a number of other services. They can:
- Identify risks and help you reduce them. Brokers can help you find everything that your insurance policy needs to cover, and point out ways you can reduce your risks.
- File claims on your behalf and see them through, negotiating with insurance companies every step of the way.
- Warn you if you’re being provided misleading information.
- Balance cost vs. benefits. A common mistake is to simply get the cheapest policy which is often inadequate. Insurance brokers will let you know if they think you’re falling into this trap.
- Clearly explain everything in an insurance policy and make sure you’re fully informed.
- Give advice on how to budget for insurance policies.
How much do income protection insurance brokers cost?
This depends on the type of insurance broker. They will always disclose their fees to you clearly and answer any questions you might have so you know how much it will cost.
Some insurance brokers will charge you a fee directly, often on an hourly basis. This will be a one time payment, and after they’ve found a policy for you there won’t be any more costs until you wish to use their services again.
Other insurance brokers get receive a commission from insurance companies for signing you up. If this is the case, they will disclose it to you ahead of time.
If you have particularly unique or frequent insurance requirements, you can also retain a broker, or the services of an insurance broker company for ongoing service. This is usually paid for with an ongoing fee.
In all cases, insurance brokers must explain their fees to you in clear terms. If you aren’t 100% certain on anything, always ask them.
Do I need an income protection insurance broker?
Insurance brokers are a great option for complex or difficult issues. Income protection insurance is very important, and the best policies will be tailored specifically for you. The broker will make sure your policy is customised by considering everything.
- Do you have dependents? This is different from income protection which covers you alone.
- Do you have mortgage requirements, student debt or other ongoing financial requirements? In the event of you being unable to work, there are different ways of handling them. A broker can help you choose the best path.
- Does your occupation have an unusually high risk of permanent injury or disability? Loss of income must be considered as a serious possibility.
You can always find income protection insurance without a broker, but if none of the policies seem perfect for your needs you should consider using an insurance broker.
What sort of questions should I ask my broker?
To get the most out your income protection insurance broker, you should ask them questions regarding anything you’re not entirely sure about, and find out their qualifications. You should never need to ask whether they’re independent or working on behalf of an insurance company as they must disclose this freely. Good questions to ask include:
- What are your qualifications? All brokers must hold an Australian Financial Services (AFS) license or be authorised representatives of license-holders. More highly qualified brokers will also have Qualified Practicing Insurance Broker (QPIB) or Certified Insurance Professional (CIP) certifications.
- What experience do you have with the type of insurance I’m looking for? Many insurance brokers are specialists. For the best income protection insurance, find a broker who has a lot of experience with life insurance or income protection insurance in particular.
- How do you bill for your work, what are your fees? They will explain their fee structure and you should have a good idea of how much it will cost to use their services.
- Who is your typical client? It’s good to find an insurance broker who specialises in clients just like you. Some typically represent businesses, and other typically represent individuals.
- Do you have any references? Ask for references from previous clients.
- What services do you offer? They should be able to provide a complete list of what they can do in writing, so you can look at it carefully and decide how to get the most out of their services.
