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Making an informed decision on what income protection policy is right for you can be confusing at times. This is where an income protection insurance broker comes in. They can break down the key features that come with policies, explain any exclusions and help you through the application process step-by-step.
Beyond simply getting good policies, insurance brokers can offer a number of other services. They can:
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.
It's an important investment because your lifestyle depends on your earning ability. Getting the best income protection insurance available can give you peace of mind. Income protection insurance can cover you and your family with payouts of up to 85% of your income if you’re unable to work, either temporarily or permanently.
Income protection insurance brokers will:
Finally, insurance brokers work directly with insurance companies to get policies that aren’t always available to the general public. These policies may have some favourable terms.
This varies from broker to broker. Generally, fees will work in either of 2 ways:
Insurance brokers may receive a commission from insurance companies for signing you up. Brokers must always disclose their fees to you clearly and answer any questions you might have about the cost. If you aren’t 100% certain on anything, always ask them to clarify.
Broadly, fees may set you back between 10% and 25% of the base premium amount, according to Public Liability Insurance, an Australian-owned broker. It states on its website that "broker fees will always be separately listed on your insurance invoice, making the whole process very transparent".
It's likely a good idea to compare a range of quotes and pricing structures from a number of different brokers to get a sense of what using a broker will cost you.
Insurance brokers are a great option for complex or difficult issues. Income protection insurance is very important, and policies can be tailored specifically for you. The broker will take everything into consideration to customise your policy.
You can always find income protection insurance without a broker, but if none of the policies seem perfect for your needs, you may want to consider an insurance 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 the following:
An adviser can help you find cover from trusted life insurance brands.
Is it common to hire an insurance broker or to handle it myself?
Brokers handle about half of all insurance policies in Australia. It's normal to hire brokers for business insurance needs, but also common to hire them for personal insurance.
What if I have a dispute with my insurance broker?
Disputes with insurance brokers are rare, making up only 2.5% of overall insurance disputes. If this happens, you can report it to the Australian Financial Complaints Authority (AFCA). All licensed insurance brokers are required to be members of an authorised independent dispute resolution scheme so you will always have someone to turn to.
Should I let my insurance broker know if my circumstances change?
Yes, it's a good idea. Any changes may mean the advice they previously gave isn't valid anymore, and they can notify the insurance company of these changes.
Do brokers always cost more or always save me money?
Sometimes it will cost more, and sometimes it will cost less overall. It depends on how much they can save you in insurance premiums, and how highly you value their advice and other services. There will never be any hidden fees, so you can carefully consider whether or not to use them.
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