Agreed value

With an agreed value income protection policy, you are insured for a set amount of cover. You will need to prove your income at the time of application.

Advantages

  • Your monthly insured benefit amount is guaranteed and will not reduce even if your actual income has reduced since application.

Disadvantages

  • The premiums are more expensive compared to indemnity value policies;
  • If your income increases you will still need to apply for an increase in monthly benefit if you wish to insure your increased level of income.

Why an agreed value policy is recommended

  • You want to have certainty in the monthly benefit you receive;
  • Your income may reduce in the future so you want to lock in a higher benefit amount while your income is high; or
  • Your income is unstable and you want to lock in a guaranteed monthly benefit amount while your income is stable.
The Dover Group