Have you found taking out income protection too expensive or are your premiums becoming unaffordable? We have come up with eight ways you can reduce your premiums to help make them more affordable:
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Increase your waiting period
The waiting period is the amount of time you will need to wait once becoming totally disabled before your monthly benefit will begin.
The shorter your waiting period is, the higher your premium will be as the less severe an illness or accident needs be in order for you to start receiving a benefit.
By increasing the waiting period, you could potentially save over 20%. However you must be mindful of the impact a shorter waiting period can have on your policy.
Things to consider when choosing your waiting period include:
- How long you can afford go without receiving an income
- Any savings you have
- Leave entitlements available including sick, annual and long service leave
- If you are self employed
30 day Waiting Period vs 60 Day waiting Period
| Annual Salary | Monthly Benefit | 30 Day Waiting Period | 60 Day Waiting Period | Saving |
| $150,000 | $9375.00 | $98.36 | $76.67 | 22% |
| $100,000 | $6250.00 | $68.08 | $53.38 | 22% |
| $85,000 | $5312.50 | $58.99 | $46.39 | 22% |
| $60,000 | $4062.50 | $49.83 | $38.73 | 22% |
Please note while premiums are based on actuals, they are examples only and may not be indicative of actual premiums available.
Decrease your benefit period
The benefit period is the amount of time you will receive your monthly benefit for if you suffer a sickness or injury and are unable to work for longer than your waiting period.
The longer your benefit period is, the higher your premiums will be as you will be eligible to receive a monthly benefit for longer. A shorter benefit period also means the maximum benefit you can receive is reduced.
By reducing your benefit period, you can potentially save over 25%.
| Annual Salary | Monthly Benefit | 1 Year Benefit Period | 2 Year Benefit Period | To Age 55 Benefit Period | To Age 65 Benefit Period |
| $150,000 | $9375.00 | $70.74 | $68.09 | $96.91 | $98.36 |
| $100,000 | $6250.00 | $46.91 | $47.67 | $81.13 | $82.74 |
| $85,000 | $5312.50 | $43.27 | $47.06 | $58.26 | $58.99 |
| $60,000 | $4062.50 | $34.82 | $37.32 | $49.50 | $50.61 |
Please note while premiums are based on actuals, they are examples only and may not be indicative of actual premiums available.
Remove Inflation Protection
Inflation Protection or Benefit Indexation is generally automatically applied to your policy to protect it from increases in inflation.
When applied. your insured amount will increase each year on your policy renewal date by either a set percentage or the rise in the Consumer Price Index (CPI).
You can opt out of the increase if you wish, allowing you to save on your premiums. You can choose to opt out once or permanently.
Only cover what you need
When taking out income protection, you should make sure you are covered for your needs – having too little or too much cover may not be adequate.
While income protection generally covers up to 75% of your salary, if you do not need this amount, you may want to reduce your level of cover.
| Salary | Percentage of salary covered | Monthly Benefit | Monthly Premium |
| $100,000 | 75% | $6,250 | $68.08 |
| $100,000 | 70% | $5,833 | $64.04 |
| $100,000 | 60% | $5,416 | $60.00 |
Please note while premiums are based on actuals, they are examples only and may not be indicative of actual premiums available.
Compare Quotes
It’s important to compare quotes from a range of insurers. We compare some of the leading insurers in Australia and can provide you with a detailed report for each of those insurers.
| Insurer | Monthly Benefit | Monthly Premium |
| Insurer 1 | $6,250 | $68.08 |
| Insurer 2 | $6,250 | $68.76 |
| Insurer 3 | $6,250 | $72.72 |
| Insurer 4 | $6,250 | $73.31 |
Please note while premiums are based on actuals, they are examples only and may not be indicative of actual premiums available. Premiums are based on a 30 day waiting period and white collar profession.
Quit Smoking
Smokers typically pay more for insurance compared non-smokers, due the increased health risks associated with smoking.
If you are a smoker you may be able save on your premiums by quitting smoking. In some cases, if you have stopped smoking for 12 months, including not using quitting aides such as nicotine patches or gums, you may be able to get your premiums reduced.
| Insurer | Monthly Benefit | Monthly Premium for Smokers | Monthly Premium for non-smokers | Saving |
| Insurer 1 | $6,250 | $83.22 | $68.08 | 18% |
| Insurer 2 | $6,250 | $89.06 | $72.72 | 18% |
| Insurer 3 | $6,250 | $92.43 | $74.04 | 20% |
| Insurer 4 | $6,250 | $92.52 | $75.01 | 19% |
Please note while premiums are based on actuals, they are examples only and may not be indicative of actual premiums available.
Take cover out early
Generally the younger you are when you take out cover, the cheaper your premiums will be as in most cases insurance costs increase as you age. You are also less likely have serious medical conditions when you are younger, which can impact on the cost of cover.
| Age | Monthly Benefit | Monthly Premium |
| 25 | $6,250 | $53.72 |
| 30 | $6,250 | $57.15 |
| 35 | $6,250 | $68.08 |
| 40 | $6,250 | $88.54 |
| 45 | $6,250 | $122.21 |
| 50 | $6,250 | $176.15 |
Please note while premiums are based on actuals, they are examples only and may not be indicative of actual premiums available.
Remove Unnecessary Options
Income Protection comes with a number of options which are designed to customise and enhance your policy. However these do cost extra and it is important to balance affordability with enhanced cover.
| Insurer | Monthly Benefit | Monthly Premium with Options | Monthly Premium without Options | Saving |
| Insurer 1 | $6,250 | $93.84 | $68.08 | 18% |
| Insurer 2 | $6,250 | $96.01 | $68.76 | 21% |
| Insurer 3 | $6,250 | $99.00 | $72.72 | 18% |
| Insurer 4 | $6,250 | $99.55 | $73.31 | 18% |
Options included Accident Benefit and Claims Escalation.
Please remember that price is not the only factor when deciding on insurance. It is always important to read the relevant Product Disclosure Statement to find out what features and benefits are offered and to take into account your own personal circumstances.You should obtain advice before you act on this information or make any decision about your personal circumstances or your insurance needs.