What are the Qualification Requirements for Income Protection Insurance?
Most permanent employees qualify for coverage by Income Protection Insurance, but it is good to know exactly what the requirements are and how you fit in before contacting an agent to purchase a policy. In addition, the requirements may vary slightly from provider to provider, and this may be a factor in your decision. So it will be important to compare and contrast the individual qualification requirements per Income Protection Insurance policy.
The standard employment requirement for nearly all Income Protection Insurance policies is that the insured must be a permanent employee, at least three quarters time. Seasonal and temporary employees are not eligible for this type of insurance. Part time employees, although permanent may be eligible depending on the company but most require a minimum of ninety hours of work a month. The employee must have worked at the covered job for at least six months for most policies.
Some providers require that the applicant be a citizen of the country, however most require that the applicant's place of employment be legally within the country of insurance issuance.
Further eligibility requirements vary, and may include that the applicant does not have a serious pre-existing health problem that could interfere with the ability to work. Another requirement may be that the applicant does not have a condition that has prevented he or she from working in the past, such as a drug or alcohol dependency. An Income Protection Insurance company will not enrol an employee who has knowledge that the company he or she works for is in imminent danger of insolvency, bankruptcy or significant downsizing. The providers will also check to make certain that the individual is not at risk for termination due to poor performance. This is also applicable after the policy is issued since most Income Protection Insurance benefits will not be paid to an employee who becomes involuntarily unemployed due to his own activities, and certainly no benefits are paid to an individual who is fired for reasons of intoxication.
An additional requirement in most cases is a waiting period between time of issuance and the time a claim can be made and honoured. This is to protect the Income Protection Insurance issuer against claims made due to pre-existing conditions. It is the norm that a claim cannot be made within 90 days of policy issuance.
Before purchase, check with the chosen Income Protection Insurance provider to ensure that your salary does not exceed the limit of policy coverage. Most providers cap the standard salary coverage at 250,00 USD per year, but will offer a separate policy for salaries in excess.
by Sally.Anderson 19 years ago