Compare, Save and Buy Income Protection
Save on your income protection with our powerful comparison engine
Compare Income Protection Quotes Online
Or call us on:
1300 135 205
Benefit of Income Protection
- Pays a monthly benefit of up to 75% of your regular income when unable to work due to injury or illness.
- Premiums from as little as $45.13 a month**.
- Entry age between 15 and 59 years old.
- Available for purchase through your superannuation.
- Worldwide cover, 24/7 Cover.
- Income Protection Insurance
- Average future earning potential for Australians
- Who should consider getting an income protection insurance policy?
- What is a benefit period and waiting period?
- Different types of income protection insurance
- Minimum working hours to be eligible for income protection cover
- Factors that affect your premiums
Income Protection Insurance
If you have a family or ongoing financial obligation, such as mortgage payments, rent, groceries or school fees, and rely on your salary to support you, then you might need income protection insurance.
Income protection is an insurance policy that will pay you a gross monthly benefit of up to 75% of your regular income, in the event you are unable to work due to sickness or injury for longer than your waiting period. This benefit payment continues until you reach your maximum benefit period or until you’re able to return to work.
This benefit can help you cope with ongoing expenses, so you can focus on recovering and getting back to work.
We have put together a step-by-step guide to help you find affordable income protection in Australia
Average future earning potential for Australians
Your income tends to grow as you mature and gain work experience, usually reaching its peak when you near retirement age. Imagine what would happen if you were unable to work because of an illness or injury while you’re still young.
Your ability to generate an income is generally your greatest asset. Unless you are independently wealthy, you need your income to pay your mortgage, repay debts, fund your retirement and maintain your current standard of living.
How your income increases as you age

Source: Australian Bureau of Statistics Earnings in All Jobs (updated May 2017)
What is income protection insurance?
Income protection in Australia is an insurance policy that pays a monthly benefit of up to 75% of your personal exertion income, after business expenses, if you can’t work for a period because of a sickness or accident. Your personal exertion income generally includes your salary, super contributions, commissions and bonuses, car and travel allowance.
Who should consider getting an income protection insurance policy?
If you have a family, are paying a mortgage and have other ongoing obligations and debts, then you should consider an income protection policy. This protects you in case you do not have enough funds during a long period of unemployment due to significant illness or accident. Being off work and unable to make these payments may put you and your family in a weak financial position.
People typically consider income protection insurance when:
- Buying a house to help keep up with mortgage payments.
- You have financial dependents (wife/husband, child, parent etc.).
- You’re self-employed and generally won’t have sick leave to fall back on.
- Having additional financial commitments that rely on your income, like a property portfolio.
- Wanting to protect your ability to generate personal exertion income.
What is a benefit period and waiting period?
Benefit period
The maximum length of time you would like your monthly benefit paid to you should you not be able to work due to a sickness or accident. Depending on the insurer, you’ll generally have the choice of 2 years, 5 years, or up to your age 65 or 70. The longer your benefit period, the more expensive your premium will generally be.
Waiting period
The amount of time between becoming unable to work because of a sickness or accident and when you start accruing your monthly benefit. Waiting periods can range from 14, 30, 60, 90 or 180 days, 1 year or 2 years. The shorter your waiting period, the more expensive your premiums usually are.
Different types of income protection insurance
Indemnity Value
Indemnity Value covers you for a monthly benefit based on the lessor of your insured monthly benefit and 75% of your pre-disability income, that is the income you earned before the injury or sickness. Therefore, if your income has reduced since you took out your policy, your monthly benefit will be reduced to reflect the reduction in income. The pre-disability income is proved at claim time.
Indemnity Value is relatively cheaper compared to Agreed Value policies because your monthly benefit could be reduced with the reduction in your income at claim time.
Agreed Value
In Agreed Value policies, the monthly benefit or income you will receive at claim time is generally fixed and will not reduce with any future changes to your income.
Agreed Value, as the name suggests, is when the monthly benefit is agreed at application time and not at claim time. During application, your monthly benefit is calculated, based on pre-application income (your income before applying) and the monthly benefit is the agreed amount. You would need to provide proof of your income when you first apply for cover.
Guaranteed Agreed Value is the term some insurer’s use to validate that your financials are received and on file. This confirms your monthly benefit and thus the name guaranteed agreed value. However, some insurers still call it Agreed Value.
Important; With an Agreed Value policy, you have to provide full and complete financials at the time you apply for the policy.
Minimum working hours to be eligible for income protection cover
Generally, to be eligible for income protection, you must be working for a minimum of 20 hours per week in a Gainful Occupation.
If you do not meet the minimum working requirements, then feel free to contact our team and ask them to conduct a Pre-Assessment, to determine what options may be available to you from the panel of insurers we have access to.
Factors that affect your premiums
Some things to consider when making an income protection insurance comparison and searching for the most competitive prices, include:
1. Your monthly benefit
The higher your monthly benefit is, the more expensive your premiums will be.
2. Your choice of waiting period
Insurers generally offer you a selection of waiting periods – the time between becoming totally disabled and unable to work and when you start accruing your monthly benefit. Usually, it is anywhere between 14 days, one month, three months, six months to a year or two years.
Typically, your premiums tend to be higher when the waiting period is shorter because a claim can potentially be paid for less severe sicknesses or accidents. For example, a claim could be paid for a broken leg if you had a waiting period of 14 days but might not be paid if you had a 90-day waiting period because your leg might have healed by then.
3. Choice of benefit period
Flexible benefit periods options are available to suit your requirements and budget. The benefit period is the maximum amount of time you continue to receive your benefit payments, and it generally ranges from 2 years and 5 years or up your age 55, 65 or 70, depending on the insurer.
The longer your benefit period, the higher your premium will generally be, since you potentially get paid for a longer period and the insurer covers a higher risk.
4. Your occupation
The occupational hazards at work affect the cost of your premium. For example, a firefighter or policeman would pay more in premiums compared to someone who works on a grocery checkout or in an office. Generally, the riskier your job, the higher the premium will be.
5. Built-in benefits
Some policies might be more expensive because they include a broader range built-in benefits, while others might be cheaper because their offering is more basic. Examples of built-in benefits offered by select insurers include:
- Specified injury benefit: Pays an advanced benefit before you’re waiting period ends when you suffer a particular specified injury.
- Accommodation benefit: Reimburses accommodation expenses up to a certain amount, for you or a family member if you are confined to a bed and are either more than 100km from home or a family member is required to travel more than 100km to be with you.
- Future insurability benefit: Increase your monthly benefit by up to 15%, but no greater than 75% of your income, without supplying additional medical information, when a significant life event occurs. The definition of a significant life event varies from insurer to insurer. For example, getting married or buying a new home (principal place of residence), increase in mortgage, the birth of a child or divorce. This benefit must be actioned within 30 days, and you need to provide evidence of the event.
- Indexation: To help your policy keep up with inflation your level of cover increases either by the greater of CPI or a set percentage (3-5% depending on insurer) each year.
- Three tier disablement definition: Depending on your income protection policy and insurer, your total disablement definition may provide you with a choice on how you want your claim to be assessed, this can be either:
Duties based: Unable to perform 1 or more important income-producing duties critical to the performance of your specific occupation.
Hours based: Unable to work at least 10 hours a week.
Income-based: Unable to earn at least 20% of your total income. - Recurrent disablement: If you return to work, and the same condition recurs within 6 months of returning to work, the insurer will generally treat it as a continuation of your original claim and recommence monthly benefit payments without you having to reserve the waiting period.
- Needlestick: If you’re a medical professional as defined by the insurer, then up to a maximum of $1million may be payable if you suffer occupationally acquired Hepatitis B or C.
- Interim cover: During the period between your application date and your policy being accepted, generally up to 90 days, the insurer pays a monthly benefit for up to 6 months should you become totally disabled solely as the result of an accident.
6. Optional extras
You can enhance your policy with additional policy options to give yourself greater cover. These generally come with a higher premium.
- Lump sum benefit option: Certain insurers offer payment of your income protection benefit in a lump sum rather than as monthly instalments.
- Trauma insurance benefit: A minimum benefit gets paid (usually 6 times your monthly benefit) if you suffer a critical illness as defined by your insurer’s PDS.
- Bed confinement option: Receive 1/30th of your monthly benefit for each day you are confined to a bed during your waiting period.
- Day 1 accident cover: Usually pays 1/30th of your monthly benefit during your waiting period if you suffer an accident and are totally disabled.
7. Choice of policy type
The type of policy you choose will generally affect your premiums. If you choose Agreed Value or Guaranteed Value policies, you pay typically around 20% more than if you chose an Indemnity Value policy.
8. Smoking Status
Smokers tend to pay more premiums because of the increased risk to their health. If you have not smoked for the last 12 months, you are generally described as a non-smoker for insurance purposes.
9. Your age
Premiums tend to increase with age. Young people generally pay lesser in premiums because they are considered a lower health risk.
10. Gender
Generally, women tend to pay higher income protection premiums compared to men because women usually make more income protection claims.
Is income protection insurance tax deductible?
Yes, income protection insurance is generally tax deductible in Australia because it protects your salary and gives you an income while you are unable to work because of an illness or injury. The amount you can claim back will be dependent on your marginal tax rate. However, you’ll have to pay tax on your monthly benefit because it is treated as an income replacement.
The premium you pay on income protection insurance is generally tax deductible. So, at the end of the year, you can claim 100% of this as an expense. However, you cannot claim a deduction for a premium or any part of a premium where the income protection policy is taken out through your superannuation and insurance premiums are deducted from your super fund. It would generally become a deductible expense to the Superfund, and not to you.
Important; Select policy options you’ve added to your income protection policy may not be tax deductible. If in doubt, be sure to contact your accountant or tax agent.
You can claim income protection premiums as a tax deduction when you lodge your tax return. Your life insurance company should inform you of the amount of premiums you have paid towards your income protection policy in a premium statement which is sent out in July of each year. If you do not have this document, make sure you contact your life insurer before you submit your tax return.
**Based on a 30-year-old, non-smoking male admin clerk, living in NSW, purchasing $75,000 worth of annual income for Indemnity Income Protection Insurance as at 21 November 2019 (stepped premiums).
Exclusive Life Insurance Direct Benefits
- Free Online ComparisonReceive great value life insurance when comparing premiums and policy features from select insurance brands.
- Lowest Price Guarantee*If we can’t beat your quote with a better price or terms, we will pay you $250*
- No Hidden FeesWe receive a commission from the insurer, you pay us nothing.
- Solutions for Your Unique RequirementsWe’ll help you find the right life insurance to meet your requirements.
- Easy to Compare and ApplyCompare quotes online in a few easy steps and apply over the phone. Our experienced specialists are here to help.
- Claims Support ServiceOur team is here to help support you during the processing of your claim so you can focus on your health and family
Get an instant Income Protection quote
Or call us on: