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iSelect’s partnered with Lifebroker to help you compare a range of Income protection Insurance policies. Not all policies are available at all times or in all areas. Any advice provided on this website is general in nature and does not consider your situation or needs. Please consider if any advice is appropriate for you before acting on it. Learn more.

What is income protection insurance?

A form of life insurance, income protection could mean you still bring home a paycheque even if you can’t work because of a serious illness or injury. Your insurer will pay a percentage of your salary after your waiting period and until the benefit period is up. 

Why is income protection important?

Income protection can give you invaluable peace of mind. With income protection, if you aren’t able to work due to a serious illness or injury, you’ll still have a regular income to help pay off debts like your mortgage and help maintain your family’s lifestyle.

Source: Safe Work Australia – Key Work Health and Safety Statistics Australia, 2023  

What are the benefit periods for income protection insurance?

Your benefit period is how long you’ll be receiving claim payments from your insurer. This could be measured in time periods, like two or five years, or set as an age cap, such as until you turn 65. You select your benefit period when you take out an income protection policy.

Regardless of how long you’re receiving the payments, once the benefit period is up, so is your income protection.

The same goes for if you’re currently in a benefit period but your policy expires. This might happen because you’ve aged out of the policy (yes, even when you’ve left childhood long behind, you can still grow out of things). For instance, if you made a successful claim at age 64 and had a set two-year benefit period, you’d only be receiving the benefit up until when you turn 65 and the policy expires.

The Product Disclosure Statement (PDS) may give you a clearer idea of how benefit periods work for your policy.

It may be worthwhile thinking about what benefit period gives you peace of mind without straining your budget. You could opt for a shorter period, assuming you may eventually recover or find an alternative means to earn an income. On the other hand, you might want to know that you’re protected until you’d be (hopefully) retiring anyway. Unsurprisingly a longer benefit period will likely mean a higher premium.

What are the waiting periods for income protection insurance?

Your waiting period is how long you’ll have to sit tight before you can start claiming. If you get better before the end of it, you won’t be able to claim.

Waiting periods can vary a lot between insurers and policies. You may find some are as short as 14 days while others can stretch to 60 or 90 days. Even two years isn’t unheard of.

To give you some context, looking at workers’ compensation claims in 2021–22 where workers were unable to do their job for at least a week, the median time off work was eight weeks. Workers who also held an Income Protection policy with a waiting period of less than eight weeks may have been able to claim income protection, while any with a longer waiting period may have had to take the financial hit.

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Get the facts on income protection

What does income protection insurance cover?

Income protection is designed to cover you to up to 70% of your income if you are unable to work due to illness or injury.

What doesn't income protection cover?

If you have a risky job or hobby, or a pre-existing medical condition, you might find illnesses and injuries related to these fall outside your cover, known as an exclusion. Similarly, you likely won’t be covered for intentional or illegal acts.

How do you compare income protection insurance?

It may be hard to compare policies if you don’t know what you’re looking for. You might like to get the ball rolling by thinking about your desired level of income protection, what benefit and waiting periods work for you, and if any exclusions could be at play.

How do you claim income protection?

To make a claim, you’ll need to show you can’t do the important parts of your job — and aren’t starting a side hustle — as well as being seen by a doctor for your illness and injury. This may mean providing medical records, sometimes regularly, and having an assessment.

Helpful Tip:

Different jobs may be seen as less risky as you gain experience. For instance, for some insurers, a first-year carpentry apprentice may not be able to get cover, while a second or third-year one could. Once their apprenticeship is finished, they may even be able to get more protection again.

Eliza Ryan

Senior Marketing and Growth Channels Manager, Lifebroker

Income Protection Insurance FAQs

How much does income protection insurance cost?

Does income protection insurance cover redundancies?

Do income protection insurance premiums include GST?

Do I have to get income protection insurance for a specific occupation?

Is income protection insurance tax deductible?

What kind of information will I need to provide?

What are loadings and exclusions?

Which income protection policy is best?

Can I get income protection if I’m self-employed?

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iSelect’s partnered with Lifebroker (AFS Licence number: 400209) to help you compare a range of income protection Insurance policies. iSelect earns a commission from Lifebroker for each customer referred through the website or contact centre. Lifebroker do not compare all life insurers or policies in the market.

iSelect Life Pty Ltd – ABN 89 124 304 347, AFS Licence Number 331128. Any advice provided by iSelect is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice iSelect gives you, having regard to your personal situation, before acting on iSelect’s advice or purchasing any policies. You should consider iSelect’s Financial Services Guide which provides information about iSelect services and your rights as a client of iSelect.