What does income protection cover?
Income protection is often referred to as Permanent Health Insurance (PHI) however, it is important to understand what your income protection plan covers. Although income protection provides sickness and accident cover the contract does not strictly insure your health.
Income protection insures your earnings. Therefore the contract will only pay benefit if you suffer a loss of income due to an illness or accidental injury not simply because you are ill.
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For example if you are a Brick Layer who has an ear infection but is able to continue working you will not have suffered any loss in your income therefore you will not be able to make a claim on your income protection contract. However, if the ear infection had left you unable to work and you therefore lost your income you would be able to make a claim to the Society. Remember your income protection contract covers a percentage of your gross earnings less any continuing income from an employer or another source of continuing income. Therefore you must be able to provide proof that you have lost your income if you make a claim. |
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Making a valid income protection claim
Cirencester friendly believes in transparency when it comes to claims, which is why we publish our Claims Statistics annually. However, we do sometimes receive claims that are not valid under the rules of our income protection contract. To help you understand what constitutes a valid claim the list below identifies the most common reasons that the Society cannot consider a claim:
Exclusions on your income protection contract
When you first apply to the Society our Underwriting Team gather information about your Medical History firstly in the form of your application and then in some cases from your GP or other Medical Professionals and sometimes by conducting a telephone interview. We use this information to decide what if we can allow you to join the Society and under what Terms. This is why it is important that you give as much detail as possible when applying to the Society.
Sometimes we will exclude pre-existing medical conditions from your contract. This means that if you are unable to work as a result of this pre-existing condition you will not be able to make a claim for benefit. These are known as exclusions and detailed in your Contract Documents which you will receive if the Society is able to offer you Membership.
Income Protection - Deferred Periods
A deferred period is a period of time during which you cannot make a claim on your income protection contract. For example you may select a 1 week deferred period which means you will only be entitled to claim benefit if you are off work for longer than a week. Your income protection benefit will start from the 8th day of your illness.
People often use deferred periods when they know they will have a continuing income from another source, for example company sick pay. If you try to make a claim during this period you will not receive any sick pay benefit.1
Making an income protection claim during the 30 Day waiting period
All new Members of the Society have an initial waiting period of 30 days from the receipt of a signed acceptance form during which they are unable to make a claim for income protection benefit. This also applies to existing Members who amend their contracts. Any changes made will not come in to affect for 30 days once the amendment has been accepted although the existing Member is able to make a claim under their previous terms.
If you try to make a claim during this period your claim will be deemed invalid and you will not be considered for income protection benefit.
The Society provides this information to help you understand how we will consider your claim. If your claim is deemed valid our Claims Department will then begin to assess your claim for benefit based on the information you provide to the Society both on your Claim Form and your original application.
This is why it is important that you regularly review your income protection contract and make sure the details which the Society holds for you are kept up to date.
1. You must still notify the Society of your illness within the required timescales in accordance with your contract to remain eligible to claim. These are within 7 days of the start of your illness for those on Day One, 1 or 4 week deferred periods or within 1 calendar month from the start of your illness for deferred periods of 8, 13, 26 or 52 Weeks.