Protect your income if you can't work with AAMI Income Cover
Income protection insurance can help make sure that even if you are unable to work because of illness or injury, you still have money coming in to help pay for your bills and living expenses. AAMI offers income protection insurance which will pay you a monthly benefit of up to $10,000 to help you maintain stability in your life, and give you a chance to rest and recover, without being forced to return to work. The policy offers a range of additional benefits so you can focus on your recovery and not any financial trouble.
This review will outline the key benefits, what's not covered and eligibility requirements of AAMI Income Protection.
What does the policy cover?
Income protection insurance is designed to pay you a monthly benefit amount which you can use to replace a portion of your income to manage the major expenses in your budget. However, each income protection insurance policy offers different parameters for this cover, so you need to compare the features and the insurers carefully so you know the extent of cover you are getting.
With AAMI Income Protection Insurance, you can benefit from the following features and benefits:
- A monthly benefit up to $10,000: You can choose a benefit amount up to 75% of your regular monthly income, from a benefit amount of $1,000 to $10,000. If you make a successful claim, AAMI will pay 75% of your income or $10,000 per month, whichever is less. If you have chosen to accommodate inflation, your benefit will be plus indexation.
- What is your income benefit made up of? The amount of your monthly income for the purposes of AAMI income protection insurance included your salary, wages, reportable fringe benefits, regular commissions, regular bonuses, overtime payments and superannuation contributions.
- Income protection for the self employed and business owners: If you are self employed or you have an ownership interest in a business which operates as a sole trader, partnership, company or trust, the monthly benefit you can receive from income protection insurance is your share of the net income of the business before tax, that means your share of the business income after you have paid the business expenses. For example, business expenses may include motor vehicle expenses and depreciation. Your monthly income does not include any income which you continue to receive from the business even when you are not working, such as an ongoing profit generated by other employees, dividends, interest, rental income, proceeds from the sale of assets, income from any secondary occupations or ongoing trailing commissions or royalties. The income you insure if you are self employed is only eligible if it is a direct result of your personal exertions.
- Guaranteed renewable: Once your application for AAMI income protection insurance is approved, your policy is guaranteed to be renewed each year until you are 65 years old. Until that time, you remain covered 24 hours a day, seven days a week, and if you are overseas when you become disabled you will still receive up to two months of your benefit.
- Single policy cover: AAMI income protection insurance is a single life policy, which means you can only insure yourself under the policy.
- Choose your premium frequency: You can choose to pay your income protection premiums monthly or annually to suit your budget needs.
- Choose your benefit period: Depending on your family’s financial situation, you can choose a benefit period of one year or two years. The longer the benefit period you choose, the higher your premiums will be now, but it does mean you have longer to recover and get back to work as normal. All AAMI income protection policies have a 30 day waiting period before the first benefit payment is made.
- Premium waiver: You can choose to have AAMI waive your premiums during the time you are receiving a claim on your income protection policy.
- Automatic indexation: You can choose to have AAMI increase your benefit amount each year in line with inflation, so that no matter when you make a claim, the benefit amount is always relevant to the everyday living costs at the time. Your benefit will be increased by 5% or by the indexation factor, whichever is greater.
- 30 day cooling off period: You have a 30 day cooling off period from the time your application is approved, to think about your cover, and change your mind if you choose. If you want to cancel your cover within the 30 day cooling off period, you will receive a full refund of any premiums paid, as long as you haven’t made a claim.
- Disability benefit: Income protection insurance from AAMI provides you with cover if you are unable to perform all of the important income producing duties in your primary occupation because of illness or injury, and you are under the regular care, treatment or following the advice of a registered doctor. If you suffer from the same disability within six months of your last benefit payment being made, this is classified as a recurring disability, and AAMI will recommence your benefit payments without you having to serve another waiting period.
Exclusions to be aware of
Your AAMI Income Protection claim for a Disability Benefit will not be paid if it is a result of:
- Your intentional, self-inflicted act
- You working in an occupation at heights above 15 metres or underground in the mining industry
- You engaging in aviation activities other than as a fare paying passenger on a commercial airline
- You riding on or driving in a self-propelled vehicle in any race, speed or reliability trial
- You engaging in mountaineering, rock climbing, abseiling or canyoning
- The use of drugs, other than those taken as prescribed by a medical practitioner or health professional
- You being under the influence of alcohol, where your blood alcohol level is above the legal limit for driving
- You diving to a depth of 45 metres or more, pothole diving, cave diving or wreck diving
- Any mental disorder or mental illness
- Pregnancy, miscarriage or childbirth
- You engaging in any criminal activity
No Redundancy Benefit will be paid if redundancy arises due to:
- Your intentional self-inflicted act
- War or an act of war
- The influence of alcohol or drugs (other than the proper use of drugs as prescribed by a medical practitioner)
- Voluntary resignation, retirement or abandonment of employment
- Misconduct, dishonesty or criminal activities
- The end of seasonal employment or a fixed-term contract
- Any strike or labour disturbance
- Poor performance of your occupational duties
- The loss or failure to maintain any licence or permit needed to operate your business
- Pregnancy, miscarriage or childbirth
- Unemployment due to sickness or injury
- Elective surgery
Who can apply?
You are not required to take a medical or blood test to apply for income protection with AAMI, instead your application is based on the answers you give in your application, your general health and your occupational duties. You can apply if you are 18 to 60 years old and an Australian citizen or permanent resident. You must be working at least 20 hours per week.
Other things to might want to know
- Maximum benefit amount. The maximum Disability Benefit payable under an AAMI Income Protection policy is $10,000 per month. The maximum monthly Redundancy Benefit is $4,000 for up to three months.
- Waiting period. You will need to serve a 30-day waiting period after becoming disabled or involuntarily unemployed before you will be eligible to start receiving a benefit.
- Insurer. Suncorp Life & Superannuation Limited is the insurer of the Disability Benefit. AAI Limited is the insurer of the Redundancy Benefit.
- No-claim period. You must serve a no-claim period of six months before you are eligible to claim a benefit for Redundancy Cover. No such period applies to the Disability Benefit.
- Cooling-off period. You have 30 days from the date cover commences to decide whether or not AAMI Income Protection is right for you. If you decide to cancel your policy during this period, you will receive a full refund of any premiums you have paid.
- Benefit payment while overseas. If you are overseas when your disability occurs or at any time while you are disabled, your monthly benefit will only be paid for a maximum of two months while you are overseas. However, it will recommence when you return to Australia if you are still disabled.
- Recurring disability. If you suffer from the same or a related sickness or injury within six months of receiving a Disability Benefit, this will be treated as a continuation of your previous claim and you will not have to serve a waiting period. Any benefit payments you receive will be deducted from your remaining benefit period.
- Premium payments. Premiums can be paid monthly or annually from the credit card or financial institution you nominate.
- Large Monthly Benefit Discount. The following premium discounts apply based on your monthly benefit amount:
- $1,000 - $2,499: no discount
- $2,500 - $4,999: 10 per cent discount
- $5,000 - $6,999: 20 per cent discount
- $7,000 - $9,999: 25 per cent discount
- $10,000 or above: 30 per cent discount
- When cover stops. AAMI Income Protection cover ends when the first of the following occurs:
- You turn 65
- You cancel the policy
- The policy is cancelled because you fail to pay your premium
- You retire
- You die
Q. What is the maximum monthly benefit I can receive?
- A. AAMI Income Protection replaces up to 75 per cent of your income, up to a maximum of $10,000 per month for disability cover and $4,000 per month for optional redundancy cover.
Q. Are income protection premiums tax deductible?
- A. Yes. In most cases you will be able to claim your premium payments as a tax deduction.
Q. How and when can I make a claim?
- A. To make a claim for AAMI Income Protection, phone the insurer on 13 22 44. AAMI can be contacted 24 hours a day, seven days a week.
Q. How long will I be able to receive benefits?
- A. You can choose between a disability benefit period of one year or two years. The maximum redundancy benefit period is three months.
Q. What waiting period will I have to serve before a disability benefit will be paid?
- A. You will need to serve a waiting period of 30 days before you will be eligible to receive a benefit.
Q. How long does cover continue?
- A. Provided you don’t make a claim and you continue to pay premiums, AAMI Income Protection cover continues until you retire or reach the age of 65.
Q. Can I notify AAMI if my income changes?
- A. Yes. You may wish to change your insured monthly benefit amount if your regular income changes. You can contact AAMI to make this change and you may also need to provide additional health and lifestyle information.
Q. Can New Zealand citizens apply for AAMI Income Protection?
- A. Yes, but you must be residing in Australia at the time of application.