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How do income protection insurance waiting periods work?

How do income protection insurance waiting periods work?

If you’ve just set up an income protection policy, or are thinking about doing so, here is a bit of information about income protection waiting periods.

When setting up income protection insurance, you’ll need to choose a couple of things before you start.

Waiting period

A waiting period is exactly what it sounds like, it’s the time you choose to wait before you start receiving regular payments from your insurer. The longer you decide to wait until the payments start coming through, the lower your premium will be.

Payment period

The payment period is also exactly what it sounds like - if you're too ill to work, this is the maximum amount of time that the insurer will continue to make claim payments to you. If you choose a longer payment period, it will give you better long term protection. However, as you'd expect, the increased protection comes at an increased cost.

The available options will usually range from a very short period, for example, this could be two years. Or it could be for much longer, until you reach your 70’s.

Visit LifeDirect and try quoting yourself at a range of payment periods to see the difference in costs. If you can manage the additional cost, consider opting for the better long term protection. If you’re still unsure about how it all works, feel free to jump onto the LifeDirect website, start a livechat and talk with one of our sales consultants. Alternatively, you can give us a call on 0800 800 400.

About the author

At LifeDirect, our core belief is that Kiwis deserve clear and straightforward choices when buying insurance. We hope this little bit of information will help you to make smarter decisions with insurance.  

If you want to get in touch, our Customer Care team based in Wellington is here to take the pain out of setting up your insurance.