Understanding waiting periods

Most Income Protection and Mortgage Repayment Insurance policies allow you to choose a waiting period. This is the time you choose to wait between when you make a claim and when payments actually start.

The most common waiting periods being offered today by insurers are 4 weeks, 8 weeks and 13 weeks.

As can be expected, the shorter the waiting period the more expensive your premium will be. How you choose your waiting period will depend on the level of your day to day expenses and if you have any money saved for contingencies.

Here are some things to take into consideration:
  • Do you usually have sick days accrued at work? If you do, that could help you get through the first week or two of being off work
  • Do you have any savings? If you have money saved away for a rainy day you can possibly afford to have a longer waiting period, but still have your insurance kick in before you get to spend all your savings
  • If you are in a relationship, is your partner employed? Could you live on one income for a few weeks if one of you was unable to work due to a serious illness or accident?
  • Do you have high mortgage repayments? If so, you need to make sure you can cover those repayments and pay for your daily expenses as well if you are unable to work
  • Do you have other insurances? For example, if you have critical illness insurance, also known as Trauma Insurance, you can possibly receive a lump sum payment for a serious illness that can cover you for a number of weeks

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