Agreed versus Indemnity
Income Protection insurance cover allows you to choose Agreed or Indemnity type policies. If you can demonstrate earnings at time of application then go Agreed is a preferable option.
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When choosing an Income Protection (IP) policy you will have to choices as to the type of policy you would like to have: Agreed or Indemnity.
Currently, industry funds only offer Indemnity type IP policies. As such, care needs to be taken to understand the difference between Agreed and Indemnity type policies.
What is the difference between Agreed and Indemnity IP?
With Agreed policies, you have to demonstrate proof of earnings at time of claim. If you make a claim and are on agreed, then the insurer will pay you that amount for which they have agreed when you first submitted your application.
With Indemnity policies, you have to proof what you earn at time of application and at time of claim. If your income is less at time of claim compared to when you first submitted your application then the insurer will pay you less.
Also, if you have an indemnity IP policy you should be mindful of the fine print, especially IP policies provided by industry funds. The fine print for most indemnity policies allows the insurer to not pay at claim time if you are not working at the time you become injured or ill. For instance, if you are in between jobs and decide to take a holiday. Whilst on holiday you become injured, the insurer might decline the claim and not pay you the Income Protection you were hoping for.
As such, Find Insurance will only supply Agreed quotes where possible. The only time we will supply Indemnity type quotes is if you are self-employed and have recently started working for yourself. Most insurers will not provided Agreed cover to newly self-employed people.
Does it cost more for Agreed?
Whilst indemnity type IP policies cost less (we are talking about 2-4% savings) then Agreed IP policies (when comparing IP from the same company), we prefer everyone to have Agreed policies if possible. As such, our IP quotes will be provide premium estimates based on Agreed policies where possible.
If you would like to work out how much Income Protection Insurance cover you might require then click on the 'Calculate Income Protection' button. Alternatively, if you would like to request a quote then select the 'Start Here' Button at the top of the page and proceed to 'Request a Quote'.