Income protection insurance can help you return to work by covering your rehabilitation expenses.
The primary purpose of income protection insurance is to replace your income with a monthly benefit. This helps you keep afloat while you recover from an injury or illness. However, people often forgot the secondary purpose of income protection: to help you return to work. This is where the rehabilitation benefit kicks in.
What do rehabilitation benefits cover?
If it can help you recover or get back to work sooner, it may be coverable under rehabilitation benefits. These include:
- Expenses reimbursement: This can cover a wide variety of the many costs that may be involved in physical or workplace rehabilitation, including multiple assessments, the programs themselves and other expenses such as wheelchairs and prosthetics, a professional assessment from a workplace disability therapist and more. Having rehabilitation cover can help you get into the programs you need, and not compromise your recovery.
- Modifications and other equipment: If needed, your insurance can help cover the cost of modifying your home, vehicle or working environment for greater access. This might be an ergonomic keyboard, a ramp for your home and almost anything in between.
- Return-to-work benefits: In addition to covering rehabilitation costs, many policies will also include return-to-work benefits that pay out when you initially return to full-time work, and periodically afterwards.
Wouldn't it be better to just receive the monthly benefit I originally insured?
While it may seem better “value” to just receive a monthly benefit for your benefit period, a rehabilitation benefit can help policyholders achieve something that is just as valuable: the ability to return to employment and take control of your own means.
An insurer will include this benefit for two reasons:
- For the policyholder’s sake. The ambition to be back in the workforce is important to most people.
- For its own sake. Insurers will also want to cut down the amount and length of income protection payouts.
Are there any conditions I should be aware of?
1. Approval from your insurer
Generally all expenses must be approved by your insurer, which will often approve them in line with criteria such as:
- If the program, equipment or other expense was recommended by a medical practitioner or other professional
- If it may be able to help you return to your job sooner, or find alternative employment more easily
2. Regular participation
Generally you will need to follow all medical advice and actively participate in programs in order to receive benefits.
3. Level of disability
You may also need to have an assessed disability level of a certain threshold. For example, some insurers may only pay out if you are assessable as fully disabled, while others will let you qualify if you are partially disabled, and others still might have no strict disability requirements at all.
4. Deductions from other compensation sources
Income protection rehabilitation cover will also not cover many of the things that are included under Medicare, but these can be limited. For example, Medicare will not cover physiotherapy, occupational therapy, speech therapy, chiropractic services, hearing aids and other health appliances. Your private health insurance extras policy might let you claim some of the costs, but the limits of these policies may not entirely cover the extended use associated with long-term disabilities, or severe injuries that may result in an income protection claim. This is where a deduction comes in.
How does the rehabilitation option compare between insurers?
Not all income protection policies will include the rehabilitation option, and where they do it can pay out in different ways. These three policies differ in:
- The conditions you need to meet before you can claim rehabilitation benefits
- The amount that’s paid out, as well as how these payments are calculated
- Whether or not they also include additional features, such as return-to-work benefits
- What you can claim benefits for. The policies which include reimbursement of expenses, for example, are more likely to be able to cover the cost of home modifications, or workplace modifications
Here’s how three different policies (all of which are available through our panel) will cover rehabilitation expenses.
Rehabilitation benefits are available with the Premier-level policy only. Anything that qualifies as a rehabilitation program may be covered under this policy, when pre-approved by the insurer. With this policy, you have three types of benefits.
- Rehabilitation benefits: You can claim the full cost of all approved rehabilitation programs up to a maximum of 50% of your benefit amount. For example, if your monthly benefit payments are $3,000, you can claim up to $1,500 for an approved program.
- Rehabilitation expenses reimbursement: You can get reimbursed for rehabilitation expenses, to a maximum of six times your monthly benefits, not including consultations or therapy.
- Return-to-work benefits: If you return to work for at least 30 hours a week within three months of receiving rehabilitation benefits, you will get paid your benefit amount. You will receive the same amount again on the three- and six-month anniversaries of starting or returning to the job.
This policy has rehabilitation benefits as well as return-to-work benefits, with additional options for self-employed individuals or business owners.
- Rehabilitation benefit: Reimburses any training and rehabilitation expenses incurred for the purposes of finding gainful employment, up to 12 times your monthly benefits. To claim this you must be totally or partially disabled, your expenses must be approved before they are incurred and they must not otherwise be reimbursed, such as through worker’s compensation.
- Return-to-work benefit: Pays an amount equal to the total monthly benefit, up to $20,000 if you return to work full-time after receiving disability benefits for at least six months. This can only be claimed once and won’t be paid in conjunction with similar cover.
Benefits are payable if you are totally disabled and participate in a pre-approved rehabilitation program, up to 50% of your monthly benefit. As soon as you start participating in a program, while eligible, you start accruing benefits. These are then paid out each month.