Income Protection Insurance Loopholes


Just like other types of insurances, there’€™s one thing you should always remember if you’€™re planning to acquire income protection insurance- those insurance companies exist to make money off their clients. It’€™s not like they’€™re bad people. Many clients have actually benefitted from income protection. However, insurers don’€™t make it an easy process.

It’€™s simple logic, actually. If a client makes a claim and the insurer pays, the insurer loses money. To avoid this, the insurance company sets up certain limitations with the contract. The insurer won’€™t have to pay for a claim which happened to be under these limitations, while the policyholder doesn’€™t get to have a taste of the money he has hardly worked for to put into the policy. Thus, a loophole.

For instance, the company might give you a hard time if there are no objective findings regarding the filed disability. If you’€™ve become sick to the point of not being able to accomplish your job, it would only be natural for the insurance company to find evidence that you are incapable to work. For example, your insurer might require your medical records to see if any diagnostic tests are there to back up your claims. The company might look for blood tests, X-rays, ECG’€™s, and other diagnostic exams pertinent to your reported condition. Moreover, if you have self- reported symptoms which are difficult to back up by objective findings, such as dizziness or headache, your claim could easily be denied.

Another issue that you should clarify is undergoing physician’€™s care. Most policies would require that you continuously undergo medical treatment during the reported period of sickness or disability. However, it might be unclear as to whether you are required to see a conventional physician or if you are allowed to undergo alternative treatments. To avoid confusion, it would be wise to ask about it from the beginning.

You should also be aware of certain activities and situations that could result in denied claims. For one, submitting false information either intently or accidentally could easily let your insurer get away from making payments to you. What’€™s worse, your policy could be cancelled altogether and you might even be blacklisted from getting another one.

You should also be aware that the insurer will not pay if you’€™ve been found to inflict injury to yourself in order to make a claim. You could also be denied payment if you’€™ve been found to be using alcohol or drugs, even if they are not the actual cause of the sickness or disability. Furthermore, getting involved with illegal activities, and getting injured from acts of war likewise lead to denied claims.

In addition, there are also employment restrictions. Before being able to qualify for cover, you must be a regular employee. If you are a seasonal or contractual employee, with the likelihood to lose your job anytime soon, you will be denied cover. You must not apply at all for income protection insurance if you already expect to lose your job, or if there’€™s an impending company change or merger.

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