I’ve been looking at getting my own income protection (without an adviser’s help)! What is interim cover – and when does it start and end. Is there anything in particular I should be aware of in this process?
Top answer provided by:
Marshall Brentnall
Thank you for your question. As its name suggests, interim cover is a feature of a policy that protects you whilst you are applying for life insurance.
There are a few things to be aware of, and it's important to note that insurers might have slightly different interpretations:
- In most cases, it is offered for maximum of 90 days however this can vary;
- It will not usually be offered if you are already insured with that insurer or have applications with another insurer;
- Interim cover only starts once the insurer has received a fully completed, signed and dated application with a valid method of payment.
Not all policies will offer interim cover, so make sure you study the product disclosure statement (PDS) carefully.
As with all things financial, you always need to look out for the fine print as there are many technical aspects of insurances, particularly when it come to TPD, Trauma and Income Protection. That's where the guidance of a trusted adviser comes in.
While the Adviser Ratings Website facilitates the question and answer functionality, all such communications are between users and authorised financial advisers, of which Adviser Ratings has no affiliation. Adviser Ratings is not the advice provider and does not provide financial product advice and only provides information that is general in nature.
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Comments2
"There is one other trap with Interim Cover. If you are a Non-standard life, and have attracted a "Counter Offer " from the insurer which either excludes benefits for certain conditions, or applies a premium loading above standard, some insurers give just 24 hours for the applicant to accept the non-standard terms before the Interim Cover lapses. This is a huge risk for advisers and applicants, requiring immediate consideration of the revised terms. Oh, BTW, most interim Covers are based on coverage for Accidental Events, not the occurrence of illness and disease."
Bill Brown 18:43 on 11 Aug 17
"I would add that while it is great that you have sought help to this question, it is likely that there are many more elements you would need to consider. It's simply a case of you don't know what you don't know. Whilst going it on your own can save you money in many areas of life, personal insurance is not one of them. Many risk specialist advisers will accept the commission as payment in full for their advice and services. The commission they receive is not an additional cost to you as going direct to the insurer will result in the same premium. More importantly, in the event of a claim the assistance of an adviser is invaluable. As you may not have the inclination or the capacity to manage this process. The key is to working with an adviser who you feel comfortable with and who you trust to act in your best interest, the latter already being a legal requirement of advisers."
Katherine 15:45 on 11 Aug 17