Life Insurance and Income Protection for Engineers

Income Protection

Midway through a project, if illness or injury kept you from work for a time, what could support your income?

Part of your income can keep coming in through income protection after a waiting period, while you focus on getting well.

We’ll compare income protection with you around how engineering pay is made up and how your week runs.

Income protection is designed to pay part of your lost income if illness or injury stops you working, with the benefit usually based on earnings in the 12 months before the illness or injury. Each policy defines disability in its own words. Waiting periods can run from 14 days to 2 years, you must be unable to work at its end to be paid, and benefits can run for a set number of years or to an age.

What we work through with you on income protection:

• Base salary, salary sacrifice and any bonus from a consultancy or asset owner, sorted by what each policy’s income wording includes
• A break between design projects, or a run of three-day weeks, landing inside the earnings history an insurer reviews
• Savings for the weeks between contracts, since income protection is built around illness or injury rather than a project finishing
• Leave banked at a consultancy or asset owner, or savings when contracting, measured against the waiting period you select
• Parental leave and a return to part-time design work, checked for any weekly hours minimum in an income protection policy
• The disability definition in each policy, compared with your actual duties in design, on site or in management
• Income cover a graduate fund may include automatically, weighed beside a personal policy built around consultancy pay and leave
• Engineering salary paying for a personal income protection policy, and any deduction, which your accountant can confirm at tax time

Learn more about Income Protection

Life Insurance

Should you no longer be here, how could anyone you share a home with keep it and the plans your salary supports?

Your beneficiaries can receive a lump sum from life cover towards any mortgage, everyday costs and plans already made.

Together, we’ll work out a life cover amount from any debts, anyone relying on your income and any cover in super.

Life cover can pay a lump sum to your beneficiaries if you pass away, and some policies include a terminal illness benefit. Insurers usually ask about your age, health, job and lifestyle when you apply. If you haven’t named a beneficiary, your estate or the super trustee may decide where the money goes, and life cover sold in a package may be reduced by any amount paid on other claims in that package.

What we work through for life cover:

• Engineering salary commitments such as any mortgage or car finance, totalled so life cover reflects the borrowing your household carries
• Any old life cover in funds from earlier consultancies or a graduate program, traced before any engineering super is merged
• A super nomination for eligible people or your estate, reviewed when a posting abroad or a new family member comes along
• A life policy with TPD attached, so a TPD payment may reduce the amount your beneficiaries would receive
• Relocating the household for a posting, and the costs that may keep running back home
• A partner who left work to join a posting, and any life cover they hold in their own name
• Life cover through a client-side employer’s group arrangement, if one exists, weighed against cover you own
• Postings abroad, a move back to Australia or a new child, each a prompt to recalculate the sum insured

Learn more about Life Insurance

TPD Insurance

Could your longer-term goals still be funded if you were never able to work again?

A lump sum from TPD cover can go towards debts and goals if you can’t work again, as the policy defines it.

We’ll weigh TPD definitions with you against your engineering qualifications and the roles your career could lead to.

A TPD lump sum can be paid if illness or injury means you’re unlikely to work again, as the policy defines it. Own occupation wording looks at your usual job, while any occupation wording looks at any job suited to your education, training or experience. Own occupation cover is usually only available outside super, TPD in super usually ends at 65, and a TPD payout may reduce any life cover packaged with it.

What we compare with you for TPD:

• Own occupation TPD cover for professional engineering duties, where offered, weighed against an any occupation test
• Your engineering qualifications, any chartered status and any years leading projects, which an education, training or experience test may weigh
• TPD wording in any fund opened by an early consultancy job, compared with personal options before any decision to close it
• A step from design into engineering management, and whether your fund’s job description for you still fits
• Daily living tasks wording used in some TPD cover, and how the test may apply to a partner not in paid work
• TPD cover in a graduate fund and any personal TPD policy, compared on definition and amount for engineering work
• A TPD sum sized to any mortgage and the salary an engineering career could still earn
• How a TPD definition could weigh your real mix of desk and site duties, compared across a wide range of insurers

Learn more about TPD Insurance

Trauma Insurance

Were a serious diagnosis to pause your project work, what could help with treatment and time away?

Trauma cover can pay a lump sum for recovery when a listed condition meets the policy’s definition and isn’t excluded.

Together, we’ll read what each trauma policy lists, and how a lump sum would sit beside income protection.

A trauma policy can pay a lump sum when a listed critical illness or serious injury meets its definition and isn’t excluded, and medical definitions can be different between insurers. New trauma cover can’t be held inside super, which has been the rule for policies written since 1 July 2014. Where trauma sits in a package with life cover, a trauma payout may reduce the life benefit.

What we read with you in a trauma policy:

• Every illness on a trauma list, with the medical wording explained so you know what an engineer’s claim would rely on
• A trauma sum sized around an engineering salary and a household’s fixed costs during months of treatment
• Recovery time away from a design office or site, and how a trauma sum could ease the pressure to return early
• Scans, travel back from any regional project and time off for treatment, which a trauma lump sum can help with
• Trauma cover for a partner who stops work to join a posting, held in their own name outside super
• Treatment costs and time off while contracting through your own company, trust or partnership, usually with no paid sick leave
• Treatment while living overseas on a posting, and how a trauma policy’s PDS treats cover while you’re abroad
• Any trauma policy taken out as a graduate or junior engineer, and the terms its wording sets, weighed against replacements

Learn more about Trauma Insurance

Cover in Super

Would any cover sitting in your super still fit the engineering work you do today?

Checking each fund’s statement and PDS can show what you hold, and whether it still suits your work.

We’ll check any cover in your super with you, including before a change of job, any combining of accounts or a posting.

Most super funds give eligible members life and TPD cover from age 25, and some add income protection, for a set amount. Default cover inside super can usually be issued without medical checks, though it may carry pre-existing condition rules set out in the fund’s PDS, and increasing it is usually underwritten like any other application. Premiums come off your balance, and you may not be able to claim the full benefit from more than one account.

What we look at in your super with you:

• Funds from a graduate program, a consultancy or a client-side employer, each listed with any insurance it holds
• A new employer paying into your existing fund, whose insurance might not suit a client-side or site role
• A graduate engineer under 25, and asking a fund to begin cover it may not start automatically
• The job description a fund holds for your engineering work, and asking the fund to update it if it’s wrong
• Any insurance in super while you invoice through your own engineering company, with contributions yours to arrange
• Duplicate cover across several funds, which costs premiums in each but may not pay its full benefit more than once
• Any old consultancy funds, with each fund’s insurance laid side by side before any decision to roll them into one
• More cover than a graduate fund’s default if a mortgage or children come along, usually after the insurer looks at your health

Learn more about Superannuation

Office, Site and Project Work

If your week moves between the office and site, and projects wrap up, how could any cover reflect that?

Setting out your duties, sites and hours accurately, and reviewing them when they change, can help any cover fit your work.

We’ll look at any cover with you as your duties, sites and contracts change.

Insurers usually ask about your job when you apply, and at claim can ask about your duties, including physical requirements, and your weekly hours. A business contracting with your company, trust or partnership doesn’t have to pay super for you. On a contract in your own name, a business may have to if you’re paid mainly for your labour, for your skills rather than a result, and you do the work yourself. Personal services income rules are for your accountant.

What we look at with you as your work changes:

• The share of your week spent in the office, on site and travelling, described as it is on any application
• Visits to mines, plants or construction sites, and any work at height, set out by how often and what you do
• A project or fixed-term contract wrapping up, and what any cover through that employer says happens next
• A move from a consultancy to a client-side role, and the fund your new employer’s contributions go to
• Contracting through your own company, where a client doesn’t pay your super, so contributions and any cover are yours to plan
• Super on a contract in your own name, which a business may have to pay under the ATO’s three tests
• Company financial statements kept ready as income evidence, with any personal services income question taken to your accountant
• Professional indemnity or contract insurance a client asks for, left with a general insurance broker who can advise on it

Learn more about Personal Insurance

Postings Overseas and Coming Home

Before a posting takes you overseas, which parts of any cover you hold or apply for are worth checking?

Reading any policy before you leave, and again when you return, can show how it treats the time you’re away.

Together, we’ll look at any cover before a posting starts, and again when you come home.

An Australian employer generally must keep paying super for Australians working temporarily overseas, while a non-resident employer doesn’t have to pay super for resident employees for work they do outside Australia. Premiums for any cover in super are deducted from the balance either way. How a policy treats living and working overseas is set out in its PDS, so it’s worth reading before you go. Your tax residency is worked out under the ATO’s tests, with your accountant.

What we check with you before you go, and when you return:

• Any cover you hold, with its PDS read on living and working overseas before the posting begins
• A new application made before you leave, with where you’ll live and work described as it will be
• Super from an Australian employer during a temporary posting, and the cover held in that fund
• An overseas employer that doesn’t have to pay your super, while premiums for any cover still in place come off the balance
• Overseas pay that falls inside the 12 months before an illness or injury, read against the policy’s income definition
• A partner who stops work to come with you, and the hours and income terms in any cover of their own
• Tax residency while you’re away, and any effect on premium deductions, left with your accountant to confirm
• Coming home, the fund your pay then goes to, and any cover looked at again against an Australian salary

Learn more about Personal Insurance

Making a Claim

With a claim to lodge, how could having someone alongside you ease the forms and follow-up?

Sharing the paperwork and follow-up with a financial adviser can make each step easier to manage while the insurer assesses your claim.

We’ll lodge a claim with you, keep the paperwork moving and follow up while the insurer or fund assesses it.

Moneysmart suggests speaking first to whoever arranged the cover, a financial adviser included, or your employer for cover through work. An insurer can ask about your work duties, including physical requirements, your weekly hours, and for payslips and tax returns, or financial statements if you’re self-employed. It may also ask for a medical examination with a specialist. The insurer assesses the claim, and a complaint goes to the insurer or super fund first, then to AFCA.

How we help with a claim:

• Cover held in a graduate fund, a client-side employer’s plan or a personal policy, each with its own claim forms
• Design, site and travel duties as they stood before you stopped work, set out on the insurer’s claim forms
• Payslips from an engineering employer, or your own company’s accounts and tax returns, collected as evidence of earnings
• GP and specialist reports describing the design or site duties you can’t do, gathered with your consent
• A medical examination with a specialist the insurer may ask for, including how that works if you’re living overseas
• An accident during a site visit, with workers compensation left to the scheme and your own cover’s claim forms prepared with you
• A phased return to design work on fewer days, and how a policy may pay part of the benefit through it
• An engineering claim you want looked at again, which you can raise with the insurer or fund first, then AFCA

Health Conditions & Illnesses

Could a health condition change the cover an insurer offers you?

Our guides explain what insurers may ask about common conditions, and a health condition doesn’t necessarily rule out cover.

We can help you prepare an application when you have a health condition or a past illness.

Underwriting is how an insurer assesses an application and decides whether to offer cover, on what terms and at what price. Possible outcomes include standard terms, a higher premium, an exclusion, a request to apply again later, or a decline.

Guides by health condition:

• Cover with a health condition: where to start
• Autoimmune conditions
• Back or joint conditions
• Blood conditions
• Cancer history
• Diabetes
• Digestive conditions
• Eye or hearing conditions
• Heart conditions
• HIV or hepatitis
• Kidney conditions
• Mental health conditions
• Neurological conditions
• Respiratory or sleep conditions
• Weight, smoking or alcohol history
• Women’s health conditions