Income Protection Insurance Australia

Income Protection Insurance provides core protection for those who want to feel secure that they can meet their bills if they are unable to work due to illness or injury. At the time of the purchase you are able to insure up to 75 per cent of your income. However you must be between 18 and 60 years old to be eligible for Income Protection Insurance in Australia.

There are two types of income protection insurance benefits in Australia - the Income Protection benefit that provide you with a monthly income if you become disabled due to Injury or Sickness and the Income Protection Accident Only benefit which will provide you with a monthly income if you become disabled as a result of an Accidental Injury only.

To be eligible for this benefit you must be in full-time employment in Australia. Classification of “full-time employment” is generally 30 hours per week, but if your occupation is permanent part time and you are working at least three days a week some insurance companies can accept you if you working as little as 20 hours a week.

How much income can you insure?

 The amount of income protection cover you need will be determined by your salary. In Australia the maximum amount of cover you can get is usually limited to:

  • If you are employed: 75% of your current gross salary (including employer packaged fringe benefits and superannuation contributions).
  • For self-employed: 75% of the income generated by the business due to your personal endeavour less your share of expenses.
  • A lower percentage of income may apply above certain income limits ($250,000 for example) and overall maximum levels of monthly benefit sum insured will apply.

Income protection insurance is flexible and can be tailored to your circumstances. The amount you get paid will depend upon whether you select Agreed value or Indemnity. Agreed Value means your monthly payment or benefit is agreed with you at the time of application and is based on your income at that time. Indemnity Value means that your monthly benefit will be determined at the time of your claim.

After you have selected whether you want Agreed value or Indemnity, you may select:

  • How long you want to be paid for (the benefit period).
  • The type of premium you want to pay-either Stepped or Level.
  • How long the insured person must have been totally disabled before we start paying you (the waiting period), and
  • The level of cover you want-Advanced, Standard or Basic.

You should remember that monthly premiums you pay for income protection insurance is largely dependent on your selections.

Income Protection Insurance Comparison

To compare income protection insurance from all major insurance providers in Australia please submit the form on this page and one of our insurance advisers will manually perform an income protection comparison.