AMP offers three income protection policies. They are called the advanced plan, standard plan, or the basic plan. The advanced plan and the standard plan are offered in either a stepped premium or a level premium.  The policy type may be either an agreed value policy or an indemnity policy.  Of the two policy types, the indemnity policy is usually cheaper.

Features

One of the welcoming features of the policy choices with AMP is that some plans have benefit periods up to age 65. This is important because the premiums can be set up to be level or stepped.  Level premiums remain the same each month for the life of the policy. Stepped premiums start out low and rise as you age.  This means that consumers who choose a policy with a benefit period to age 65 can have income protection coverage until they reach retirement age. This makes it easy to plan for your financial security.

AMP offers a guaranteed future insurability option which allows the level of protection to be raised if your salary rises over a 12 month period. Income protection payments are based on a percentage of your annual income.  If a policy was started when you were 19, it is likely, that by age of 25, your salary would be significantly higher.  The benefit of having the option to raise your coverage is purely to the consumers advantage.  As we age, we tend to earn more and own more. Having the ability to raise your income protection coverage just makes sense. Especially considering that income protection’s purpose is to provide a financial back up income if we become too sick or are disabled and can not work.  The amount of payments received is directly related to the amount of income when the policy was started. If our income rises so  our income protection benefits should change.  This is not an automatic action and raising the level of your income protection insurance is something that consumers have to assess on an annual basis.

Partial Disability Clause:  AMP offers a partial disability clause in their income protection policies. Consumers who have been out of work due to a disability or illness and then return to work but are not able to work full time or are earning less then when they became disabled can receive a partial payment under the partial disability clause. However sometimes policies can be very restrictive when it comes to partial disabilities.

Some of the nicer features that are build into the AMP policies are the rehabilitation cost and the rehabilitation bonus. Both features are really a bonus to consumers who purchase an AMP policy. The rehabilitation costs feature helps to pay for rehabilitation equipment such as wheelchairs, and rehabilitation program fees. The rehabilitation bonus helps consumers when they enter an approved program for rehabilitation. Both help the consumer by providing funding that can help speed recovery time.

Another positive feature of the AMP policies is that they automatically increase cover to match inflation costs. Increases are matched to the CPI or consumer price index. The advanced policies include inflation costs while a claim is active. For consumers who have active claims, this benefit really adds up. Keep in mind that policy payout is a percentage of your annual income at the time the policy was taken out. That percentage range is 55%-75% of your annual income. In a year, when inflation could hit 3% for cost of goods, a policy that adds in cost of inflation is really making a financial contribution to your life.

As consumers consider the importance of income protection insurance plans, and the downsides of insurance protection policies, it is my hope that the positive attributes of the AMP plans can add peace of mind for many consumers. There really is a vast difference that is offered by AMP insurance protection plans when compared to many other companies and their plans. It is still important that consumers take the responsibility to know what they need financially. To help figure out the financial impact of suddenly becoming disabled, it is a good idea for consumers to sit down and talk with both a financial adviser and a tax professional.  Some income protection plans are taxed as income, and it is better to know this ahead of time then to find out in the middle of a disability.

In closing, remember the benefits that AMP income protection policies have and items like the rehabilitation bonus and automatic inflation adjustment. These kinds of benefits really add value to a policy.

 

(This article and all articles on this site are not to be taken as professional insurance advice and information may not be accurate, for insurance advice please speak to a registered insurance broker. We can connect you with a broker by using the form on this site.)