Long-term income protection works by paying out a percentage of your income (typically up to 70%) if you become unable to work as a result of serious illness or injury.
You’ll receive these payments until you’re able to return to work, until your policy expires, until your payment period comes to an end or until you retire (whichever happens first).
Typically, long-term policies can cover you for a minimum of 5 years up until you reach retirement.
Unlike other forms of protection, you won’t receive payments straight away. Instead, you’ll need to wait until your deferred (or waiting) period has come to an end.
The deferred period refers to the period of time you must be unable to work for before your payments will begin. Your payments will only begin if you’re still unable to work once your deferred period has come to an end.
For example, if you select an 8 week deferred period and you’re still unable to work after 8 weeks has passed, your payments will commence.
It can also be possible to make multiple claims throughout the lifetime of your long-term income protection policy.