Easily compare income protection quotes

Income protection insurance replaces a percentage of your income in the event that you’re unable to work because of injury, accident or illness. If you were to need to claim, you’ll be provided with an income, generally up to 70% of your gross wages, for a set period of time payable either weekly or monthly which allows you to recover with peace of mind. According to the Australian Securities & Investments Commission (ASIC), income protection may be especially valuable for self-employed small business owners and contractors who may not be protected by a workers’ compensation agreement.^{1https://moneysmart.gov.au/how-life-insurance-works/income-protection-insurance} Some policies can also include or offer an optional extra lump sum payable to your beneficiaries should you pass away, or become permanently disabled in an accident.

Source: https://moneysmart.gov.au/how-life-insurance-works/income-protection-insurance

Income protection generally replaces up to 70% of your income lost as a result of your inability to work because of an injury, accident or illness, for a set period. The illness, accident or injury must incapacitate the policyholder for longer than the policy’s waiting period (learn more about waiting periods in the next question). It’s important to note that while various illnesses and injuries are covered, conditions resulting from certain circumstances may not be eligible for income protection. These can include pre-existing conditions, pregnancy and childbirth, and injuries or illnesses resulting from intentional, criminal, or self-inflicted acts, alcohol or drugs, and sports or motorsports.

Insurers generally require you to serve a waiting period to claim on income protection. This is simply the period of time that must pass before you can make a claim. Generally, you must be incapacitated for the whole waiting period as a result of your injury or illness before you can make a claim. According to the Australian Securities & Investments Commission (ASIC), this is often 30 to 90 days.²https://moneysmart.gov.au/how-life-insurance-works/income-protection-insurance Additionally, during the waiting period, your income protection policy will not pay out – only injuries or illnesses that keep you out of work beyond the waiting period may be covered by the policy. If your insurer offers a choice of waiting periods, the option you choose can potentially impact the cost of your premiums.

Source: https://moneysmart.gov.au/how-life-insurance-works/income-protection-insurance

Like all insurance products, the premiums associated with your income protection insurance will depend on a variety of factors including but not limited to your age, your income and occupation, your lifestyle, and whether or not you smoke. Additionally, policy premiums can differ between different insurers, and whether or not you decide to purchase optional extras (such as death benefits, disablement benefits and business expenses) can further affect your premiums.

A benefit period refers to the length of time for which your income protection insurance policy will pay out for a particular claim. Insurers generally set two kinds of limitations to the benefit period:

• Maximum time period (for example, 2 or 5 years)
• Age cap (for example, up to age 60 or 65)

Depending on your policy and the insurer, income protection policies can offer benefit periods of 12 months, two years, and even until retirement age (generally 65 or possibly 70), at the end of which your monthly or weekly payments will cease. An income protection insurance policy can only be applied for as long as the life insured is below a certain age, such as 60. Should an entry age cap apply, it may supersede a maximum time period, meaning that a policy with a benefits period of two years could only provide one year of payments to a 59-year-old policyholder if the policy expiry age is age 60. However it’s important to read the Product Disclosure Statement of your policy to better understand the terms, exclusions, and limitations.

Some policies do include coverage should you be subject to an involuntary redundancy. Not every insurer does provide this option, so it’s important that you carefully read the terms and conditions and understand the inclusions prior to taking out a policy. These policies may add additional requirements, such as you cannot volunteer for a redundancy package, and you cannot have been fired for misconduct.

Yes it can be, but only in certain circumstances. One circumstance where income protection is generally not tax deductible, is when it’s bundled into your superannuation. According to the Australian Taxation Office (ATO) premiums payable on income protection policies that are taken out through superannuation and where the insurance premiums are deducted from your super contributions are not tax deductible.^{3https://moneysmart.gov.au/how-life-insurance-works/income-protection-insurance} Generally, only the premiums directly attributable to income protection are tax deductible. Should your policy be bundled with trauma insurance or life insurance, the premiums for these portions of the cover are likely not tax deductible.

Source: https://moneysmart.gov.au/how-life-insurance-works/income-protection-insurance

All income protection insurance premiums are exempt from GST. As income protection insurance is classified as ‘financial supplies’ by the Australian Taxation Office, they are exempt from GST and all premiums do not include the 10% tax rate applied to other goods and services.

As with all insurance products, there’s no “one size fits all” policy. Different income protection policies will offer varying levels of compensation, subject to differing terms and conditions. Premiums can also vary from policy to policy. In short, a range of factors can determine whether a policy is suitable for you, which is why it can be beneficial to compare policies and shop around.

Finding an income protection policy can be a difficult process. But at iSelect we have partnered with Lifebroker to make it easy to compare income protection policies on offer from their range of providers. Start comparing online, or call the team on 13 19 20.