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Income protection insurance comparison

Income protection insurance can help if you lose your income. Compare options in seconds.

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Our jobs give us so much security. They keep a roof over our heads and food in our stomachs. So what would happen if you were suddenly unable to earn a living? A serious injury or long-term illness can easily stop hard-working Aussies from bringing home a salary - and they often come without warning. Income protection insurance can make those situations far less stressful. It means you'll still be able to claim up to 85% of your normal wage even though you're out of action.

Income protection insurance comparison for Australia

You'll notice we haven't included prices in our comparison table. That's because your quote is largely impacted by your age, lifestyle and level of cover. Instead, you can compare features then hit the link to tailor your quote. If you're a high earner, keep an eye out for the maximum monthly benefit as it varies between brands. This is the most you'll ever be able to receive per month. Waiting periods are also worth looking at. That's the period of time you need to be out of work before you can claim.

Name Product Maximum Monthly Benefit Maximum % of Income Covered Maximum Benefit Period Waiting Period Options
AAMI Income Protection
$10,000
75%
5 years
14, 28, 60 or 90 days
Insuranceline Rate Saver Income Protection
$10,000
85%
5 years
14, 28, 60 or 90 days
Get a $100 bonus gift after 2 months. Plus get 12 months cover for the price of 11 if you pay annually. T&Cs apply.
NobleOak Income Protection
$25,000
75%
2 years or to the age of 65
30 or 90 days
Medibank Standard Income Protection
$7,500
75%
5 years
30 or 90 days
You could win a $2000 Gift card when you get an Income Protection Insurance quote by 30 August. Winner drawn fortnightly. Plus, Medibank health members save 10% every year. T&Cs apply.
nib Income Protection
$10,000
85%
2 years
14 or 28 days
Get one month free when paying annually. T&Cs apply.
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Compare up to 4 providers

How does income protection work?

Income protection insurance is essentially an insurance policy for your salary. If you become too sick or injured to earn a living, the income protection policy will kick in and act as a replacement. In some cases, it will even replace your salary if you're made redundant.

However, income protection insurance will only cover a maximum of 75%-85% of your salary, depending on which policy you choose. That means if you earn $5,000 a month, your potential benefits will be capped at $3,750-$4,250 a month. As well as limiting the payout amount, income protection insurance also limits the length of time you can receive payouts. Usually, the maximum is either 2 or 5 years. In some cases, you may be able to receive benefits up until the age of 65.

Did you know? Finder surveyed 8,000 Australians and just 35% said they'd be able to last more than 3 months if they lost their job tomorrow.

Is income protection insurance right for me?

There's an easy way to figure out if you could benefit from income protection insurance:

If you answer NO to any of these questions, you should seriously consider income protection insurance:
  • Would you be able to get by for more than a few weeks without your income?
  • Do you have savings that would tide you over for a few months, or even years?
  • Are you entitled to government benefits and would they be enough to pay your bills?
  • Are you entitled to annual sick leave and workers compensation insurance?
If you answer YES to any of these questions, you should seriously consider income protection insurance:
  • Do you have any dependents - such as a child or spouse - who rely on your income?
  • Are a small business owner or self-employed?
  • Do you have any financial obligations, such as a mortgage or rental agreement?
  • If you were injured or ill, would you prefer private healthcare
Did you know? The maximum disability benefit you'll receive from the Australian government is $472.15 per week.

When should I get income protection insurance?

You can get income protection insurance whenever you like. However, many people choose to take out a policy during one of several major life stages. These include:

House loan

When you have financial obligations, such as a lease, mortgage, or car loan

Family

When you are planning to have a family and your partner may take extended time off

Hot dog stand

When you become self-employed or start a business

Home

When you have a partner or dependents who rely on your income

What do I need to know before getting started?

Comparing income protection insurance online is the easy way to find a policy which is right for you. However, there are some key terms you'll need to understand before getting started:

Maximum monthly benefit

This is the highest possible benefit.

Maximum % of income covered

Some insurers will cover up to 75% of your income while others will cover up to 85%.

Maximum benefit period

This is the maximum length of time you'll be able to claim benefits.

Waiting period options

Insurers apply waiting periods before you can make a claim.

Expiry age

This is the age at which you will no longer be able to renew your policy.

Stepped premiums

This means premiums are calculated based on your age.

Level premiums

This means your annual premiums aren't based on age.

Extra benefits

Most income protection policies will offer some additional benefits.

What can I use income protection insurance benefits for?

Income protection insurance is designed as a temporary replacement for your salary, so you can spend it however you like. Remember, you'll have a little bit less to work with because income protection will never cover more than 85% of your wage, but it can still help with:

Your rent or mortgage

Medical expenses related to your illness or injury

Regular bills including utilities, school fees, and home insurance

Credit card bills, car loans, and other debts

Daily living expenses, including groceries and household goods
Did you know? A Finder survey found that 29% of Aussies already struggle to pay their rent or mortgage.

What's the maximum amount of cover I can get?

In Australia, the maximum amount of income protection you can get is the equivalent of 85% of your regular earnings. However, some insurers will only cover up to 75% of your income. Use the calculator below to see how much you could potentially claim on a monthly basis.

Calculate how much income protection you need

How much income protection insurance do I need?

Although it's possible to insure up to 85% of your income, you might not need or want to. If you choose to insure a smaller percentage of your income, your monthly premiums will be lower. So how do you figure out how much of your income to insure? Well, start by asking yourself these important questions:

How much of my wage is essential?

If you could easily live on 50% of your wage, there might not be much point getting a policy which covers 85% of it. This could easily be the case if you have a passive form of income, like an investment property, or a partner who also earns a wage.

How big is my emergency fund?

If you've built up a decent emergency fund over the years, you might only need to insure a smaller portion of your income. You'll have to tap into your savings to supplement the rest, but that's what it's there for.

Do I have any other insurance policies?

Check to see if you have any income protection in your super account, as that may also offer a benefit. Other policies, such as mortgage protection insurance and personal injury insurance, can also help.

How long can I be on income protection?

There are two ways to answer this question - how long you hold a policy for and how long you can receive benefits for:

How long can I hold a policy for?

Until you reach the expiry age listed in your PDS. For most insurers, that will be when you turn 65 or 75. However, because income protection gets more expensive as you age, the policy may become unaffordable by that point.

How long can I receive benefits for?

However long the benefit period is listed as in your PDS. For most insurers, it's a maximum of 2 or 5 years, but some will pay out until you reach 65. However, you can only receive benefits while you're unable to work - if you recover and can return to work, your benefits will stop.

How much can I expect to pay for income protection insurance?

The price you'll pay for income protection insurance will vary significantly depending on lots of different factors. However, we did some cost research to give you a rough idea of what you can expect to pay in different scenarios.

Graphic artist
Sofia: $45 a month
☑️ Female
☑️ 30 years old
☑️ Non-smoker
☑️ Graphic designer
Mechanic
Caleb: $84 a month
☑️ Male
☑️ 40 years old
☑️ Smoker
☑️ Mechanic
Carpenter
Jess: $222 a month
☑️ Female
☑️ 50 years old
☑️ Smoker
☑️ Carpenter
Accountant
Luca: $149 a month
☑️ Male
☑️ 60 years old
☑️ Non-smoker
☑️ Accountant

Example income protection insurance quotes

Your income protection insurance quote is highly dependent upon your own personal circumstances. The tables below show just how much a quote can change due to occupation, sex, and smoking habit.

What factors affect the cost of income protection?

It's hard to give an accurate picture of how much income protection might cost because the price can be influenced by many different factors.

FactorWhat happens?
Biological sexPremiums are generally cheaper for men
AgeYounger people pay less for income protection insurance
ProfessionPeople in high-risk or very physical jobs will pay more for income protection
HealthPeople with pre-existing medical conditions may pay more or face more exclusions
Smoking habitSmokers will pay more for premiums or be declined cover altogether
Benefit amountThe higher the potential monthly benefit, the higher the premiums
Waiting periodSetting a longer waiting period will reduce your premiums
Benefit periodA shorter benefit period will mean cheaper premiums
Additional benefitsPolicies with lots of added extras may be more expensive
HobbiesPeople with high-risk hobbies may face more exclusions or higher premiums

Is income protection really worth it?

For a lot of people, yes. Our research shows that a healthy 40-year-old can easily protect $3,000 of their monthly income for somewhere between $40 and $100 a month. Even if we use the upper limit of that scale, it's only $1,200 a year. In many cases, income protection insurance is cheaper than car insurance, it's cheaper than health insurance, and it's even cheaper than a gym membership.

While all of those other expenses are important, they can't save your car or home from being repossessed, they can't cover your kids' school fees, and they can't pay for groceries that you wouldn't be able to afford if you suddenly lost your job. Income protection insurance can.

Are there any other benefits to income protection insurance?

Yes. Heaps of them. In fact, we looked at 10 different income protection insurance policies and found a total of 21 extra benefits. We've listed them below, so if you come across any extra benefits and aren't sure what they mean, you can use the table below to double-check. Remember, these extra benefits will vary between different insurers and they may be complimentary or they may cost you extra. Always check with your insurer to be sure.

BenefitWhat it means
Death benefitA lump-sum benefit to your family if you die
Terminal illness benefitPays a lump-sum if you're diagnosed with a rapidly-progressing terminal illness
Permanent disability benefitAn extra lump sum if your injury or illness makes you permanently disabled
Partial disablement benefitThe insurer may pay a reduced benefit if you are still able to work in some capacity
Specific sickness or injuryIf you suffer a specific sickness or injury, the insurer may pay a lump-sum benefit
Recurring disablementIf you return to work for a short time and then suffer a recurrence of the same injury or illness, you won't have to serve a second waiting period.
Kids injury benefitA lump-sum if your child sustains a specific injury, or in some cases a specific illness
Rehab benefitAn extra monthly payment to cover the cost of rehabilitation and help you return to work
Return to workPays a bonus if you complete an approved rehabilitation program and return to work.
Needle-stick injuryThis will pay a benefit if you become infected with a certain illness as a result of a needle-stick injury or splash injury while at work.
Elective surgeryPays a monthly benefit if you remain totally disabled due to cosmetic or elective surgery
SpouseIf your partner or spouse has to stop working due to your medical condition, the insurer may pay a monthly benefit.
Nursing careIf you need the full-time care of a nurse, the insurer may pay a benefit before the waiting period is up.
Holiday injuryA lump-sum if you're injured on an Australian public holiday, a public school holiday, or when you're at least 200km away from home
AccommodationCovers accommodation costs for any immediate family members if you are totally disabled and confined to a bed or hospitalised more than 100 kms from home.
RelocationReimburses the cost of a flight home if you are permanently disabled outside of Australia
Automatic indexationTo help protect against inflation, the insurer may automatically increase your benefit amount in line with the CPI.
Premium pauseThis allows you to pause your premiums, and cover, for a set period of time and for pre-agreed reasons.
Premium waiverIf you're receiving benefits, the insurer will waive the premium throughout that period.
Guaranteed future insurabilityAllows you to increase your monthly benefit by a certain percentage when your salary increases, without providing further evidence of your health.
Member benefitMay pay an additional benefit if you have other forms of insurance with the same company.

What types of income protection insurance are there?

There are types of income protection insurance - retail, direct, and through a super. Each option has its own pros and cons.

InfoProsConsMore
RetailYou'll usually buy a retail policy after speaking to a broker
  • More tailored to you
  • More comprehensive cover
  • Usually more expensive
  • Longer application process
Speak to a broker
DirectYou'll buy a policy directly from the insurance company
  • Usually cheaper than retail
  • Quick approval process
  • Less comprehensive cover
  • More general exclusions
Compare online
SuperYour super fund will provide cover to its members. It may be optional.
  • Guaranteed approval
  • No up-front premiums
  • Premiums eat into your super balance
  • More restrictive conditrions
  • Less flexibility in your policy
Learn more

What brands offer income protection?

Income protection insurance is a very popular product in Australia and there's no shortage of options. The table below shows the full list of direct Finder partners, as well as the insurance companies our broker partners collaborate with.

What doesn't income protection cover?

Although income protection insurance is designed to kick in when you're too sick or injured to work, there are some exceptions to the rule.

Never covered

❌ Drug or alcohol related sickness or injury
❌ Normal and uncomplicated pregnancy
❌ Acts of war or terrorism in countries that have a do-not-travel warning
❌ Self-harm, including exposing yourself to risks of sickness or injury
❌ Illness or injury as a result of criminal activity

May not be covered

❌ Specific illnesses within a set period of buying your policy
❌ Back pain, unless it lasts more than a set period
❌ A football injury, unless it lasts more than a set period
❌ Pre-existing conditions
❌ Some dangerous sports
❌ Some dangerous occupations

Remember, exclusions will vary between different insurance companies so always check your PDS carefully. If you're unsure about anything, contact the insurer directly.

Is income protection the same as life insurance?

There are many different types of life insurance. Income protection is just one of them. It's different from most other types of life insurance policy because it provides a monthly benefit, rather than a lump-sum. The table below shows the different types of life insurance, as well as what they do. Often, you can mix and match to create a package with multiple forms of protection. Or you can take out one standalone policy if you feel that's enough.

Type of policyWhat it does
Life (death) coverPays out a lump-sum if you die or, in some cases, are diagnosed with a terminal illness.
Trauma insurancePays out a lump-sum if you're diagnosed with a specific medical condition.
Total and permanent disability (TPD)Pays out a lump-sum if you become totally and permanently disabled due to illness or injury. May pay out a partial benefit if you are partially disabled.
Funeral insuranceCovers the cost of your funeral up to a certain amount
Personal accidentPays a lump-sum if you're injured or killed. Does not provide illness cover
Mortgage protectionCovers your mortgage payments if you die, become seriously ill, or lose your job
Salary continuanceLike income protection but more restrictive. Only available through your super.

What if I'm made redundant?

Some insurance companies will also provide income protection insurance which pays out a benefit if you're made redundant. Be aware though, the benefit period is usually capped at 3 months and adding this option to your policy will make it more expensive.

BrandRedundancy option?Learn more
Picture not describedGet quote
Insuranceline logoGet quote
Picture not describedGet quote
Nib LogoMore info
Picture not describedGet quote

*Some insurers temporarily suspended redundancy cover during COVID-19. Check directly.

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Still not sure?

Income protection insurance can be tricky to understand at first - but don't give up. Give our beginners guide a go and see if that helps.

Or, if you're looking for a bit more info on how pricing works, check out our research on the average cost of income protection insurance.

If there's still something you can't find - feel free to drop us a comment. We'll do our best to clear things up for you.

FAQs

Who can apply for income protection insurance?

Australian residents over the age of 18 can apply for income protection insurance. However, most insurers stop offering new policies to people once they reach 60 years old.
You will also have to meet minimum work requirements before you are approved - usually, this is 20 hours a week but it varies between different insurers.

Is it better to buy directly from an insurer or get help from an advisor?

Both options have pros and cons. An advisor will be able to help you find cover which is more tailored to your situation and with fewer exclusions. However, the process may take longer and require a medical exam.

What if I already have cover in my super?

You can have an income protection policy through your super as well as a separate insurer. Income protection is often far more limited within super accounts, so it's a good idea to look outside of your fund too.

Can I get cover if I only work part-time?

Yes. Insurers typically offer income protection to people who work at least 20 hours a week and have been in the same role for 12 months.

Can I get income protection without a medical?

Yes. Some insurers offer no-medical income protection insurance. This is aimed at people who are in good health and have no pre-existing medical conditions. It's usually less comprehensive cover, but the approval process will likely be quicker and easier.

Does income protection cover pregnancy?

If your pregnancy is normal and uncomplicated, you won't be able to claim on your income protection insurance. However, if it poses a serious and prolonged health risk, you may be able to claim in some circumstances.

Are premiums tax-deductible?

Yes. The Australian Taxation Office (ATO) has confirmed that you can claim the cost of insurance premiums if they protect against loss of income.

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12 Responses

  1. Default Gravatar
    alfDecember 1, 2018

    Is there a policy that provides income protection when becoming temporarily unemployed after having been working & with income protection plan cover?

    • Avatarfinder Customer Care
      ValDecember 7, 2018Staff

      Hi Alf,

      Thank you for leaving a question.

      This depends on the reason why you are unemployed temporarily but for information you can check Beginners guide to income protection for options on income protection plans available

      Cheers!
      Val

  2. Default Gravatar
    MustafeOctober 30, 2018

    I live in Ethiopia i want sponsor

    • Avatarfinder Customer Care
      JohnOctober 31, 2018Staff

      Hi Mustafe,

      Thank you for your question.

      I understand you are looking for a sponsor to enter Australia. You can find a sponsor yourself, or you can put in an expression of interest using SkillSelect. Lodging an expression of interest in SkillSelect allows Australian employers to see your qualifications and employment history. Employers can then contact you if they are interested in offering you a position. Hope this helps!

      Cheers,
      Reggie

  3. Default Gravatar
    RahulOctober 23, 2018

    main isake lie aavedan kaise kar sakata hoon…

    • Avatarfinder Customer Care
      JohnOctober 23, 2018Staff

      haay raahun

      ek prashn chhodane ke lie dhanyavaad.

      aap us pradaata ke painal se chun sakate hain jis par ham aay suraksha beema ke lie hain.

      upalabdh pradaataon ko pradarshit karane vaalee taalika par krpaya apane vikalpon kee sameeksha karen aur tulana karen. ek baar jab aap kisee vishesh pradaata ko chun lete hain, to aap “sait par jaen” batan par klik kar sakate hain aur aapako pradaata kee vebasait par reedaayarekt kiya jaega jahaan aap aavedan ke saath aage badh sakate hain ya aage ke poochhataachh ke lie apane pratinidhiyon ke sampark mein rah sakate hain.

      aavedan karane se pahale, krpaya sunishchit karen ki aap sabhee yogyata maanadandon ko poora karate hain aur aavashyak aavashyakataon ke vivaran ke saath-saath sambandhit utpaad prakateekaran vaktavy / niyam aur sharton ke maadhyam se apane vikalpon kee tulana karate samay yah nirnay lene se pahale ki yah aapake lie sahee hai ya nahin. ummeed hai kee yah madad karega!

      cheeyars,
      regee

  4. Default Gravatar
    GregOctober 2, 2018

    Self employed, I took out income protection and Trauma policies in 1994 due to the arrival of first child. The cover was indexed and I accepted the indexation increase upon every policy anniversary.

    In 2000, I suffered a mild MCI from which I fully recovered without needing a stent or subsequent surgery. The Trauma lump Sum benefit was paid immediately.

    The insurer then advised that my future premiums for the remaining income protection cover would be subject to a 200% loading. On independent advice I continued to accept indexed cover.

    In July 2009, I was diagnosed with early onset Parkinson’s Disease at age 51. Medically, I was able to continue running my business for another 5 years whereupon my overall condition had deteriorated to the point where a claim on the policy was approved and I accordingly ceased working and retired in August 2014.

    The last annual premium exceeded $13000.00 which prompts my enquiry:

    1.Would I have been charged an increase in trailer commission to the agent, and
    2.Would I have paid commission on the loading component of the increased premium?

    Your response appreciated.

    • Avatarfinder Customer Care
      MauriceOctober 5, 2018Staff

      Hi Greg,

      Thanks for your question. Although I can’t speak for your specific situation, generally, if you are to use an agent to manage your insurance there is potential for ongoing premiums to be paid as percentage of premium. So if a premium is to increase, there’s a chance the commission increases as well.

      Get in touch with your adviser or agent who may be able to disclose their commission structure with you.

      I hope this helps,

      Maurice

  5. Default Gravatar
    LornaApril 11, 2017

    If a person has been treated for cancer more than 5 years ago will this affect pay out.

    • Avatarfinder Customer Care
      ZubairApril 12, 2017Staff

      Hi Lorna,

      Thank you for your question.

      finder.com.au is a comparison and information service and we are not permitted to provide our users with personalised financial advice or product recommendations.

      For clarification on whether you are eligible to receive a full claim or not, please refer to your product disclosure statement or contact your insurer.

      All the best,
      Zubair

  6. Default Gravatar
    jamesSeptember 14, 2016

    I want to have my income protected in case of illness of family members (my parents) in the UK

    • Avatarfinder Customer Care
      MauriceSeptember 14, 2016Staff

      Hi James,

      Thanks for your question. Unfortunately income protection in Australia will only protects the income in the case of an injury or illness to the person who’s income is insured.

      I hope this helps,

      Maurice

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