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Overview
When calculating Total and Permanent Disability (TPD) insurance, it is important to avoid over-insuring your client. Income protection insurance provides an ongoing income stream if a client is unable to work due to illness or injury, which can reduce the lump sum required under TPD. By factoring in these payments, you can more accurately determine the client’s financial shortfall and recommend an appropriate level of TPD cover.
⚠️Important
Support logins have read-only access to scenarios and cannot create or edit them. In addition, Support logins do not have access to Advice Tools. Only users with the Paraplanner or Adviser role can access Advice Tools and create or edit Digital Advice scenarios.
This function allows a user to reduce lump sum Income Protection (IP) claim amount from the TPD required lump sum cover.
On the Needs Analysis screen, select the Options button from the top right of the window.
Select the Offset TPD by IP Claim toggle to enable the feature. A row named IP Claim will be added under Existing Capital section of the needs analysis.
Points to be noted
Include IP Claim toggle will be switched off by default in Options at the Practice level. Users will have to enable the feature.
The IP Claim will be reduced for TPD cover only.
The defaults, including enabling the Include IP Claim apply at the Practice level.
Calculation of Income Protection (IP) Claim Cover
IP Claim benefit can be calculated for two reasons
If you have an existing Income protection cover
If you have Income Protection cover under existing policies, select the Other Covers button on top to check the monthly benefit.
These existing covers have their own benefit period as per details entered under existing policy section.
By default, the offset amount will be calculated for all IP covers separately and then added to calculate the total offset amount.
After-tax monthly benefit x Benefit Period(months) = total IP claim = Total amount to offset TPD
When a custom Income Protection is entered
Enter a custom Insurance by selecting Other Covers and filling the required fields.
When a custom entry is made for Insurance Needs Analysis, where income required per month and benefit period are entered manually, the offset amount will be calculated from these entries.
Total IP claim = After-tax monthly benefit x Benefit period(months)
