Salary Continuance Insurance

What is Salary Continuance Insurance?

Salary Continuance Insurance as well as Income Protection and, Sickness and Accident Insurance are all names for insurance and policies that try to pay you an income if you can’t earn yours due to being sick or injured.

These policies normally pay the insurance amount to you on a monthly basis while you are on claim, with the amount normally being 75% of your pre disability income. Some policies will actually pay a full 100% of your income but these are not common and will need to be sourced through an expert advisor. Other considerations are how long after the “event” for which you will claim you need to wait till the money comes through and for how long while being sick or injured it will keep paying you for.  Absolute attention to these details will avoid a nasty and life changing surprise at claim time.

Salary Continuance Insurance - questions you should ask yourself

Some simple questions while looking in the mirror, will let you work your way through this complex protection market.

• How much of an income drop do I want to take if I’m sick or injured? (notice I said “want” not “can”)
• How long can I self fund my family and my lifestyle before eating into any pre allocated savings? (do you really want to loose your savings for the new car? The holiday? The mobile phone bill? Etc…)
• If I have to choose a point in the future when I will absolutely stop receiving my income regardless of my savings or superfunds, when do I want that to be? Can I afford after that time to look after myself and family for the rest of my life?

Answering these will guide you through policies that suit your situation and policies that probably suit someone elses.

A common policy that may suit someone else is that found inside many superannuation funds. These Income replacement policies normally pay 75% of your income and may start accruing money for you 90 days after the claimable incident thus making the first payment at 120 days. The period length of payment is set at 2 years for many of these superannuation insurance policies.

Now looking in the mirror and ask, can I continue to live normally without money coming in for 120 days and after about 2 years can I afford to keep living without any further income? So is this insurance policy type really for me?

Before you apply for Salary Continuance Insurance

Salary Continuance Insurance is not normally automatically available, your application will need to be accepted by the insurer.

An experienced advisor can add considerable value to your ability to gain insurance and the terms of insurance. Attempting to “go it alone” can result in a mark against your name that is forever there. Under the Insurance Act 1984 you have a responsibility of disclosure, a failed attempt at applying for insurance must be disclosed on any subsequent application and will not be helpful for gaining cover.

So don't make the crucial mistake - get advice from the expert about your Salary Continuance Insurance before you apply.