What information will I need to provide with my application?

When applying for your income protection policy, your insurer will ask you the following questions: Basic information. Things like age, gender, income and occupation will factor into your premium costs. Medical conditions. If you have pre-existing medical conditions, such as diabetes or kidney problems, or if you're a smoker, your insurer will need to know. Sometimes they will require a copy of your medical history. It is vital you accurately disclose all of your medical history. Other relevant information. If there's anything that you think might affect your cover, such as if you're planning to switch to part-time work in the near future, you should let your insurer know. Since you're the one purchasing the policy, you're entitled to ask questions too. You should consider checking the following: Disability definitions. As mentioned earlier, insurers define disability in several ways. Ensure you know what your insurer uses. How the cover changes over time. Some income protection policies can change as you age or switch occupations. Accident waiting periods. Certain policies will skip the normal waiting period if you suffer an accident and start paying your benefit right away. Exclusions. Make sure you know what won't be covered by your policy.

Can I receive income protection and workers compensation?

Yes. You can receive both workers compensation and income protection payments. However, the workers compensation payment will likely reduce your insurance benefit so that you aren't able to earn more than your insured amount while you're off work.

How is an income protection policy set up?

When it comes time to take out your income protection policy, you'll be offered a choice between two kinds: Agreed value insurance. Under this, you'll be able to nominate a fixed claim benefit value up to 75% of your income at the time of taking out the policy. While this is the more expensive option, it can help preserve your benefit if you're unsure about your future income or know exactly how much you'll need to survive on in the event of not being able to work. Indemnity policies. These are more common and adjust your benefit value to reflect your income at the time of a claim instead of when you purchase the policy. They are cheaper, but your benefit can be affected by dropping to part-time work, taking extended leave or becoming unemployed.

Who can apply for cover?

Cover is generally available for Australian residents aged between 18 and 63 (age next birthday). The maximum age on some policies is 59.

Can I get cover if I only work part time?

Generally, you will need to be employed at least 20 hours per week and to have been in the same job for at least 12 months. The benefit is based on your pre-tax income after other associated expenses have been taken into account.

Can I get cover if I am self-employed?

Yes, provided you work for at least 20 hours per week and have been self-employed for at least 12 months. You will need to provide some form of evidence to the insurers surrounding your earnings.

Can I get cover if I have a high-risk job?

This will depend on the nature of your occupation and the insurer that you choose. Insurers have different eligibility requirements for workers. It may be worth receiving help from an insurance consultant who can use their knowledge of the market to help you find a suitable option. Learn more about income protection for high-risk manual jobs here .

How much cover do I actually need?

While most policies by default will provide you with a default level of cover of 75-85% of your income, you may be able to find cover with a reduced benefit amount. Consider what you would need to cover in the event that you were unable to work. It's also worth noting that some insurers will only provide a maximum monthly benefit (such as $12,000 per month), so it's worth checking to see exactly what you are eligible for.

Can I increase or decrease the level of cover I am eligible for?

Yes, you can choose to adjust your policy (depending on the policy/insurer you have chosen) or increase/decrease your premiums as you see fit, provided you meet their medical history requirements.

Can I take out cover on behalf of my partner if they work at home?

No. You are required to apply for cover individually (unlike with joint life insurance ). If your partner is a stay-at-home, you may be able to apply for cover and include what's known as a homemaker option. The insurer will also need to verify their details in order for cover to be put in place.

Do I need income protection if I already have life insurance?

Life cover and income cover both offer protection for different reasons and both are worth considering having in place. Life cover provides a lump-sum benefit in the event you pass away or suffer a terminal illness. Income protection provides an ongoing monthly benefit while you are unable to work for an extended period.

Do I still have to pay for cover if I am receiving the benefit?

No, you don't have to pay for cover if you are under claim.

When can I make a claim on income protection?

To make a claim on your income protection insurance, your insurer must be satisfied that you are disabled and cannot work. Unfortunately, disability doesn't have a common definition across income protection policies. Instead, there are three ways that insurers assess degrees of disability: Duties-based disability. This is the most common definition of disability. Under this, you qualify for the full benefit amount if your injury or illness prevents you from performing the income-producing duties of your occupation. If you are still able to perform some of your duties, you may be eligible for a partial benefit. Hours-based disability. Under an hours-based definition, you qualify for full income protection if you are unable to work in your own occupation for at least 10 hours per week. If your working hours are reduced by illness or injury but you can still put 10 hours a week or more into your usual occupation, your policy may pay out a reduced benefit. Income-based disability. With an income-based definition of disability, your insurer will classify you as disabled if illness or injury has led to a reduction of your income by 20% or more. However, if you are still able to work and earn some income, you can receive a partial benefit. Before you apply for a policy, make sure you're aware of how the insurer defines disability and what conditions you will need to meet to make a claim.

Can I cancel my policy?

Yes, you can cancel your policy at any time you choose.

If I cancel my cover, will I receive any payment?

No. There is no surrender value if you cancel your policy outside of the cooling-off period.

Home Authors Sam Baran

Sam Baran

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Sam Baran is a writer for Finder, covering topics across the tech, telco and utilities sectors. They enjoy decrypting technical jargon and helping people compare complex products easily. When they aren't writing, you'll find Sam's head buried in a book or working on their latest short story. Sam has a Bachelor of Advanced Science from the University of Sydney.