Indemnity value

With an indemnity value policy you are insured for what you say you earn, but if you make a claim you will need to verify your income at the time of claim. If your income has reduced since you applied for the cover, the monthly benefit you receive will be calculated based on the reduced amount.

Advantages

  • The premiums are cheaper than agreed value policies.

Disadvantages

  • If your income had reduced, your benefit will be a reduced amount based on the level of income at the time of claim; and
  • 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 indemnity value policy is recommended

  • You wish to obtain a cheaper policy;
  • You wish to obtain a cheaper policy due to budgetary constraints;
  • You have stable income so you will have no difficulty in proving your income at time of claim; and/or
  • Your income is likely to increase in the future, therefore you will have no difficulty in proving your income at time of claim.
The Dover Group