Deferred Period – Income Protection/Accident & Sickness Insurance

Just what is a ‘deferred period’ and why is it important?

Imagine this scenario:

You are in a 9 – 5 job and you get sick pay.

Your sick pay may only pay you for 6 or 12 months but after that it stops.

What happens if you’re seriously ill or injured?

Well, if your sick pay stops after 6 months, you would have a deferred period of 6 months on your insurance so that when your sick pay stops, the insurance starts.

If your sick pay lasts for 12 months then the deferred period would be set at 12 months.

What if you are self employed?

Well then in this instance the deferred period will be as long as you can survive before you need the insurance to start paying.

The longer the deferred period, the cheaper the insurance will be.

Deferred periods for PHI (Permanent Health Insurance) can be 1 month, 2 months, 3 months, 6 months or 12 months.

Deferred periods for ASU (Accident Sickness or Unemployment) can be Day 1, 30 days, 60 day, 90 days and sometimes 180 days.