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Life Insurance

Waiting period and benefit period: what’s the difference?

11 October 2021

As you consider income protection cover, you’ll come across terms like ‘waiting period’ and ‘benefit period’. Many people think they are one and the same. But they are not. It’s important to understand what these two concepts are, how they differ, and the role they play when you take out income protection insurance.

What is a waiting period?

The time that elapses from when you’re seriously ill or injured to when you’re eligible to file a claim is called the waiting period. That is, you need to wait for a certain amount of time before you can start receiving your benefit.  

If, during this waiting period, you’re able to get back to work, then typically, you won’t receive your benefit payments.

Insurers may offer flexible waiting periods where you have the power to decide how long you want to wait before payments kick in. With Suncorp Income Protection Insurance, you get the flexibility of choosing from 14, 28, 60 or 90-day waiting period. Weigh up the options against your circumstances to decide what waiting period is right for you. If you feel confident about having savings set aside to tide you over temporarily, a longer waiting period might be your choice. Choosing a longer waiting period also may lower your premiums. But at the same time, if you don’t have a financial buffer then you will have to wait for a longer period of time before your replacement income comes in.

What is a benefit period?

The duration for which you will keep on receiving your benefit payments is called the benefit period. Let’s say, you choose a six-month benefit period. Then your payments will continue for six months or until you’re fully recovered and are back at work, whichever happens first.

With the benefit period, there is one important thing to keep in mind. It’s hard to imagine, let alone predict when or for how long you might remain seriously sick or injured and be unable to work. However, you don’t want to be stuck in a situation where your benefit period has finished and the income support has stopped, but you’ve still not recovered enough to get back to work. Thankfully, much like waiting periods, the benefit period is also flexible. So, you get to choose how long you need to be covered for. Usually the shorter your benefit period, the lower your premiums would be.

Impact on your cover

As we’ve seen, waiting period and benefit period are two distinct concepts. And both of them play a significant role when it comes to how your income protection cover operates. While insurers might provide flexibility when choosing waiting and benefit periods, which can determine how high or low your premiums might be, you need to weigh up what is the optimal balance between the two that’s right for your needs. One that will be affordable for you and offer the level of financial assistance you require while you focus on your recovery.

If you need assistance, you can also get in touch with the Suncorp Life team today on 13 11 55.

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Suncorp Life Insurance products, other than in some circumstances the Redundancy Benefit, is provided by TAL Life Limited ABN 70 050 109 450 AFSL 237848 (TAL Life) which is part of the TAL Dai-ichi Life Australia Pty Limited ABN 97 150 070 483 group of companies (TAL). TAL is not part of the Suncorp Group. TAL uses the Suncorp brand (part of the Suncorp Group) under license. Any advice on this page in connection with the Life products is general in nature and is provided by Platform Ventures Pty Ltd ABN 35 626 745 177 AFS Representative Number 001266101 (PV). PV is part of the Suncorp Group and an authorised representative of TAL Direct Pty Limited ABN 39 084 666 017, AFSL 243260 (TAL Direct). General advice does not take into account your individual needs, objectives or financial situation. Before you decide to buy or to continue to hold a Life Products you must read the relevant Product Disclosure Statement. The Target Market Determination (TMD) for the product is available on our website.