How long will my pay-outs last?

The pay-out you receive when you claim is called a ‘disability benefit’ and is defined by the terms of your policy. In disability insurance, the term ‘benefit period’ refers to the time period during which you are eligible to receive these benefits should you become disabled.

If you have income protection in place and suffer an illness or injury that prevents you from working, your policy’s waiting period will begin. Once the waiting period is complete, you will start to receive benefits. These benefits will continue for the length of the benefit period (the time period during which you are eligible to receive these benefits).

Does the benefit period apply to both Permanent and Temporary Disability cover?
Temporary Income Protection (TIP) provides cover in the case of a temporary or permanent disability, for a temporary period of time. Permanent disability cover is composed of Capital Disability and Permanent Income Protection (PIP).  While FMI recommends a combination of Capital Disability and PIP for comprehensive cover, the choice of cover will depend on your needs.

Capital Disability is a once-off lump sum pay-out and, therefore, does not have a benefit term. PIP or TIP benefits are paid out on a monthly basis for the duration of the selected benefit period or until you are able to return to work (whichever is the shortest), at which point benefits will cease.

How long is my benefit period?
Depending on your policy, the length of the benefit period could be 3, 6, 12, or 24 months. Some benefits stipulate the length of the benefit period or a chosen retirement age. TIP typically covers disability for up to 24 months but, again, this depends on your chosen benefit term. If your disability continues after that and you have PIP cover in place, you could receive PIP benefits until you are able to return to work. FMI policies are profession-based and designed to cover 100% of income, ensuring that your income is properly covered when you need it most.

Do I qualify for more than one pay-out?
In most cases, permanent disability will equal one pay-out, either in the form of Capital Disability or PIP, designed to help you maintain your lifestyle until retirement or death. For temporary disability, multiple claims are allowed so, should you suffer a temporary disability, you are assured of continuity of income to help maintain your lifestyle until you are able to return to work.

To end, you should not confuse your policy’s benefit period with its waiting period. To learn more about waiting periods, click here.