If your family or your lifestyle would suffer financially if you were unable to work for any period of time, then you might need income protection insurance. Income protection insurance from Citibank can pay you a monthly benefit of up to 75% of your regular income, which will be enough to keep all of your important bills current and continue to meet your day to day living expenses while you recover from illness or injury.
With Citibank Income Proteciton, you can receive an ongoing monthly benefit up to $10,000 per month for up to two years so you can focus on your recovery. This review will outline the key features of the policy and eligibility requirements.
What does the policy cover?
Citibank makes it easy to financially protect yourself and your family against illness and injury, because you can never know when these will strike, and you want to make sure that the lifestyle you have worked hard to build is still there for you when you’ve recovered.
Citibank income protection insurance features:
- Easy online application and immediate cover: You can apply for Citibank income protection insurance quickly and easily online or over the phone. You don’t have to take any medical or blood tests, and as soon as your cover is approved, you are covered in case of illness or injury.
- A monthly benefit of up to $10,000: Citibank will insure you for up to 75% of your regular income in case you are unable to work because of illness or injury. Your monthly benefit is limited to a maximum of $10,000 per month. If you work in a special risk occupation as defined by Citibank, the maximum benefit available is $3,000 per month.
- Self employed benefits: If you are self employed you can also be covered by Citibank income protection insurance for the gross monthly income generated by your business which is the result of your personal exertion. This amount is less the costs and expenses of deriving that income.
- Affordable tax deductible premiums: Premiums for Citibank income protection insurance start at just $7 per week, and in most cases these premiums are tax deductible.
- Choose your benefit period and waiting period: Your choice of benefit period and waiting period will affect the cost of your premiums, as a longer benefit period and a shorter waiting period will be reflected in higher premiums. However, you need to consider your family’s financial situation and your current savings. You can choose a benefit period of six, 12 or 24 months, and waiting period of 30 or 90 days.
- Your choice of premium frequency: You can choose to pay your premiums fortnightly, monthly or annually to suit your family budget.
- Add total and permanent disability cover: You can also include total and permanent disability cover with your income protection insurance from Citibank, with a TPD benefit of up to $500,000 available. The TPD benefit is pad as a lump sum amount if you suffer a total and permanent disability as defined by your Citibank policy. TPD insurance excludes cover for claims which are the direct or indirect result of pre existing medical conditions. Just remember that while your income protection premiums may be tax deductible, the premiums for total and permanent disability are not normally eligible.
- Cooling-off period: You have a 21-day cooling-off period from the commencement of your policy to assess whether it suits your needs and your family’s protection. If you change your mind about the Citibank income protection policy within your cooling off period, you can cancel the policy and receive a full refund of any premiums you’ve paid.
- Worldwide cover: You remain covered by your Citibank income protection insurance wherever you are in the world. You can also have a claim paid no matter where you are in the world, but it will still be paid to you in Australian dollars.
Other benefits of your policy to be aware of
- AIA Australia. Citibank Prime Income Cover is issued by AIA Australia Ltd.
- Worldwide cover. The policy offers protection all around the world, 24 hours a day, seven days a week.
- Guaranteed renewable. Once your application has been accepted, your cover won’t be affected by any changes to your health, occupation or pastimes. As long as you continue to satisfy the policy conditions and pay your premiums, cover will continue until you reach the expiry age of 65.
- Cooling-off period. If you change your mind after taking out cover, you have 30 days to cancel your cover. Cancelling within this cooling-off period entitles you to a full premium refund.
- Benefit indexation. Your sum insured automatically increases by 5% each year to keep pace with inflation. However, you have the option to reject an increase by contacting the insurer.
- Cover ends. Cover under the Citibank Prime Income Cover policy ceases when the first of the following occurs:
- your death
- the policy anniversary date on or immediately after your 65th birthday
- you ceasing to be an Australian permanent resident or a New Zealand citizen residing in Australia
- the cancellation of your cover at the Policy Owner’s request
- the cancellation of your cover by us due to nonpayment of premiums or if the eligibility requirements have not been met or as otherwise permitted by law
Some additional options to consider
- Death Cover. If you die while receiving a Total Disability or Specific Injury Benefit, Citibank Prime Income Cover pays a lump sum benefit of three times the lesser of the sum insured and 75% of your pre-disability income. This benefit can be used by your loved ones to cover funeral costs and other immediate expenses.
- Premium Pause. You have the freedom to apply to the insurer to put your premiums on hold while you are on parental leave or involuntarily unemployed. Cover remains in place during this period and any Total Disability claims are assessed under an Activities of Daily Living definition.
- Premium Waiver. To help relieve the financial burden while you are on claim, Citibank Prime Income Cover premiums are waived while you are receiving a benefit. When a benefit stops being paid, you will have to go back to paying your normal premium instalments.
When will a benefit be paid?
In order to receive a Total Disability monthly benefit under Citibank Prime Income Cover, you will need to meet one of the insurer’s two definitions of Total Disability: Usual Duties or Activities of Daily Living. The definition that applies to you depends on your working status when you apply for cover and when you make a claim.
You will be covered under the Usual Duties definition if, at the time of application, you are:
- Employed for at least 20 hours a week
- Spending no more than 20 per cent of your working hours at home
- Not performing heavy manual work
- When you become disabled you are working at least 20 hours per week.
- To satisfy this definition you must be under the care of a medical practitioner, not working, and unable to perform the duties of your usual occupation.
If you don’t qualify for the Usual Duties definition when you apply for cover or make a claim, you will be covered under the Activities of Daily Living definition. To satisfy this definition you must be under the care of a medical practitioner, not working, and unable to perform any two of the following activities: bathing or showering, dressing and undressing, eating and drinking, using a toilet to maintain personal hygiene, getting in and out of bed or moving from place to place.
When won't a benefit be paid?
Your Citibank Prime Income Cover claim will not be paid if:
- It arises due to deliberate self-inflicted injury or sickness, such as suicide or attempted suicide.
- It arises because you engage in criminal activity or commit any unlawful act.
- It arises as a result of any aerial activity (except as a passenger on a commercial aircraft).
- It is caused by war, terrorism or civil commotion.
- It is caused by drug or alcohol misuse.
- It arises because you participate in motorised sport in any capacity.
- It arises due to normal pregnancy, terminating a pregnancy or giving birth.
- It arises due to a mental illness of any kind.
- It is caused by your participation in abseiling, mountaineering, football, trail bike riding, scuba diving and a range of other sporting pursuits.
- It is for parental leave or involuntary unemployment that occurs within 12 months of the policy commencing, being reinstated or the level of cover being increased.
- You become voluntarily unemployed.
- You become unemployed while working outside Australia.
- You become involuntarily employed from a business owned by your partner or relative.
- It is for the end of a fixed-term contract or seasonal work.
- It is caused because you breached the terms of your employment contract.
Your occupation involves working underground, working more than 10m above ground, working offshore, underwater diving, working with explosives, working as a professional sportsperson or employment in the armed forces.
Who is eligible for cover?
To be covered by a Citibank Prime Income Cover policy, at the time of application you must be:
- 18 to 59 years of age
- A permanent employee or self-employed
- An Australian citizen or permanent resident, or a New Zealand citizen, living in Australia
- Cover expires when you reach 65 years of age
How much will it cost?
There are several factors that affect the cost of Citibank Prime Income Cover premiums, including:
- The level of cover you choose. The higher the monthly benefit amount offered by your policy, the more your income protection insurance will cost.
- Premium payment frequency. You can receive a discount if you pay premiums annually instead of monthly.
- Cover increases. If your sum insured is indexed to provide protection against inflation, your premium amount will increase each year.
- Your employment status. You will not have to pay your policy’s premiums while you are involuntarily unemployed.
- Your occupation. People who work in hazardous occupations, for example on a construction site, are more expensive to insure than those who work in low-risk white-collar jobs. The hours you work and the location of your workplace will also be taken into account.
- Health history. Your medical history will help determine your overall risk profile and the cost of premiums.
- Age. The older you are, the more prone you are to health issues and the more your cover will cost.
- Gender. Income protection premiums tend to cost more for men than women.
- Smoking status. Smokers are at a higher risk of suffering a wide range of illnesses and therefore must pay more for cover.
- Discounts. You can enjoy a 5% premium discount if you and your partner take out Prime Income Cover on a joint policy.