Many Australians will buy a policy for income protection insurance to guard against job loss. While the policies that are available in Australia do not provide benefits payments unless you are injured or ill, some insurers do offer a level of protection from involuntary unemployment. This policy feature is known as redundancy protection and consumers should consider whether they need protection that includes this feature.
With a policy that has redundancy protection, the policyholder can get a premium waiver if they find that they are involuntarily unemployed for reasons other than injury or illness. This feature may not provide the insured with any benefits payments, but not having to pay the premiums on the policy can provide at least some relief to an individual that has experienced job loss.
Redundancy protection is an important feature of income insurance and consumers should look into how it works. This premium waiver only covers involuntary unemployment and there are some other exceptions. Consumers should discuss the exact details of the redundancy clause when purchasing a policy.
Adding redundancy protection to your income protection cover has some significant advantages. If you are involuntarily out of work, at least you won’t have to pay the premiums on a policy that will not provide coverage until you resume working. When you are shopping for income protection insurance, compare the cost of policies with the premium waiver feature with the ones that do not include this added protection. Making this comparison will help the consumer to decide whether redundancy protection is worth the extra money.