Income Protection Insurance in Australia
Your ability to earn is an important financial asset. Income protection may replace up to 70% of your monthly income if illness or injury stops you working, subject to the policy terms, so bills can keep being paid while you focus on recovery.
- Up to 70% of pre-tax income, paid monthly, depending on the product
- Waiting periods and benefit periods vary between insurers and products
- Illness and injury cover, subject to policy definitions and exclusions
- Premiums paid personally may be tax deductible in some circumstances
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What is income protection?
Income protection (sometimes called salary continuance) replaces a portion of your regular pre-tax income, paid monthly, if you can't work due to illness or injury, subject to the policy terms. It is designed to help bridge the gap when sick leave runs out and savings start to run down.
We can provide general information about indemnity-style policies, including available waiting periods and benefit periods. Features, definitions, eligibility and availability vary between products.
What may be included
Up to 70% income replacement
A monthly benefit may be paid while you're unable to work due to illness or injury, subject to the policy terms and the product.
Waiting period options
Income protection products may offer different waiting periods. Available options, definitions, premiums and eligibility vary between insurers and products.
Benefit period options
Benefit periods such as 2 years, 5 years or to age 65 may be available, depending on the product and insurer.
Illness and injury
Cover for particular illnesses, injuries, mental health conditions and events outside Australia depends on the terms, definitions, exclusions and underwriting of the relevant policy.
Tax treatment
Income protection premiums paid personally may be tax deductible in some circumstances. Tax treatment depends on the policy and how premiums are paid. Consider obtaining independent tax advice.
Super funding option
Some income protection cover may be funded through superannuation where available. Eligibility depends on the product, insurer, super fund and applicable superannuation rules.
Who commonly considers income protection?
- Employees whose lifestyle depends on a regular pay packet
- Self-employed and contractors with no employer sick leave
- Professionals with high earnings and large mortgages
- Tradespeople exposed to injury risk
- Sole income earners supporting others
- Anyone still building wealth well ahead of retirement
What it costs
Indicative monthly premiums for a 70% income protection benefit on an $80,000 salary, 30-day waiting period, 5-year benefit period, healthy non-smoker, white-collar occupation. Figures are indicative only, are product-dependent and are subject to insurer eligibility and underwriting.
| Age | Indicative monthly premium |
|---|---|
| 30 | $40 - $75 / month |
| 40 | $70 - $130 / month |
| 50 | $140 - $240 / month |
| 60 | $250 - $420 / month |
- • Premiums generally scale with the monthly benefit insured, so higher benefits usually cost more.
- • Longer benefit periods, such as to age 65, generally cost more than shorter benefit periods.
- • Manual or high-risk occupations may attract higher premiums, and longer waiting periods may reduce premiums, depending on the insurer.
- • Income protection premiums paid personally may be tax deductible in some circumstances. Tax treatment depends on the policy and how premiums are paid. Consider obtaining independent tax advice.
- • Figures are indicative only and not a quote. Product features, limits, definitions, eligibility and availability vary between insurers and products. Refer to the relevant PDS and TMD for full details.
These figures are illustrative only and are not a quote. Premiums, features, limits and availability depend on the insurer, product, policy structure, occupation, health, age, smoking status, eligibility and underwriting. Refer to the relevant Product Disclosure Statement and obtain a current quote before making a decision.
Frequently Asked Questions
Straight answers from a specialist helping Australians.
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Approved Product List
Our product comparisons are limited to the life insurance products available through our licensee-approved product list. We do not compare every insurer or insurance product available in the Australian market.
Products currently available through our approved product list: Neos Protection, Encompass Protection, Futura Protection, PPS Mutual.
General Advice Warning
The information on this website is general information only and has been prepared without taking into account your objectives, financial situation or needs. Before acting on any information, you should consider its appropriateness having regard to your own objectives, financial situation and needs, and consider the relevant Product Disclosure Statement (PDS), Target Market Determination (TMD) and our Financial Services Guide (FSG).
Read our Financial Services Guide.