The Finder app is here! 🥳

Get your savings sorted.

Income protection insurance comparison

Tick another job off the list with our easy side-by-side income protection insurance comparison.

Updated

Cheerful father

Would you struggle to pay the bills if you had to take unexpected time off work? Income protection could help.

It's designed to step in and replace your income by up to 85% should you become sick or injured. You can just set up your monthly bill, and have peace of mind knowing you're covered if something happens.

Each policy will be slightly different, one policy could have a longer benefit period while another pays a higher percentage of your income. The below table shows online options available directly from Australian brands.

Income protection insurance comparison for Australia

Name Product Maximum Monthly Benefit Maximum % of Income Covered Maximum Benefit Period Waiting Period Options
Medibank Standard Income Protection
$7,500
75%
5 years
30 or 90 days
10% discount for Medibank health members.
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, and 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
Get 1 month free Income Protection cover. Offer ends June 30, 2020. T&Cs apply.
AAMI Income Protection
$10,000
75%
5 years
14, 28, 60 or 90 days
loading

Compare up to 4 providers

What is income protection insurance?

Income protection insurance is a financial safety net – it pays you a percentage of your wage, for a set period, if you're unable to work due to a sudden illness or injury.

So, if you're unlucky enough to have a serious car accident, and can't work for six months, you'd get regular payments from your insurer – meaning you could focus on getting better without falling behind on the bills.

For a monthly payment – usually around 1-2% of your salary – income protection insurance gives you peace of mind if you become too sick or injured to work.

What does income protection insurance cover?

Basically, income protection insurance covers your wage, or a percentage of it. Imagine you're stuck in hospital for six months, or you're recovering from major surgery and can't work. Income protection insurance would ensure you still get regular payments, so you can keep up with everyday expenses without getting into unnecessary debt.

How much you get paid, and for how long, will vary depending on which insurance policy you choose. You could take out a policy which pays 85% of your wage for five years, or you could take out a policy which pays 50% of your wage for six months. Both have their benefits; it's about what's right for you.

You can spend the money however you like, as it's just a replacement for your normal wage, but it's designed so you can continue paying your bills, avoid the stress of debt and cover any medical costs that you may incur.

Get a live online quote for income protection insurance

The price of income protection insurance can vary depending on a number of factors, including how much you earn, the type of lifestyle you lead and how long you'd like to be covered for. Fill in your details below to get a good idea of how much income protection insurance is likely to cost you.

How to compare income protection policies

When looking for income protection insurance, there are a few important features that you should consider, and it's worth making sure you understand each one properly.

  1. Maximum monthly benefit – Your monthly benefits are what you'll get from your insurer if you can't work, but insurance companies will put an upper limit on how much they'll pay out – this is your maximum monthly benefit.
  2. Maximum percent of income covered – Income protection insurance policies won't cover the full amount of your wage. Instead, they'll promise to pay you a percentage of your normal salary. You can choose to pay higher premiums to cover a larger portion of your salary, or you can make your policy more affordable by covering a smaller portion.
  3. Maximum benefit period – This is the length of time you'll receive benefit payments so long as you still meet your policy requirements and are unable to work. Typical benefit periods run from six months to five years, with longer benefit periods having higher premiums.
  4. Waiting period options – This is the period of time you have to be disabled or unable to work before you receive any benefits. Shorter waiting periods will bring higher premiums but will help you pay the bills sooner. Make sure you can survive the waiting period financially without your normal stream of income.
  5. Age restrictions – Income protection policies will have a maximum entry age as well as an expiry age. The maximum entry age is the oldest you can possibly be when you first buy your policy. The expiry age is the age at which your policy will no longer pay out.
  6. Agreed value vs indemnity. Agreed value insures you for a percentage of your income when you take it out and doesn't change over time. Indemnity policies evaluate your income at the time of the claim and offer a percentage of that instead. Indemnity is often cheaper.
  7. Type of premium. Level premiums stay the same. Stepped premiums will start out cheaper than level premiums but get more expensive over time. Consider stepped premiums if you only intend to hold the policy for a short period of time.
  8. Optional extras. Some income protection policies offer redundancy cover, which can help if you are made redundant in your job or might provide rehabilitation benefits to get you back on your feet and working sooner.

What types of income protection are available?

You can choose between two different types of income protection insurance: agreed value and indemnity value.

Type
Agreed valueThe more expensive of the two, agreed value insurance guarantees you'll get a monthly benefit which was agreed upon at the start of your policy. It's particularly good for people who may have a fluctuating salary but want to be certain they'll get a set benefit.
Indemnity valueCheaper and more common, indemnity value insurance doesn't necessarily guarantee you'll get the monthly payments you wanted when you bought your policy. If you make a claim, your insurance company will verify your income at that point in time – so if you've taken some time out, or the business you own has had a tough few months, you might not get exactly what you had in mind.

Working out how much cover you may need

If you earn a six-figure salary, you'll be able to get more income protection insurance than if you earned $60,000. Use our income protection insurance calculator to find out how much you could get in monthly payments, if you were suddenly put out of work.

Answer a few questions to get an estimate on how much income protection you might need

Answer a few questions to get an estimate on how much income protection you might need

What isn't covered under income protection insurance?

Every income protection insurance policy will have its own exclusions, so it's really important that you read your product disclosure statement carefully.

As an example, exclusions could be anything from certain diseases, such as cancer, to injuries sustained while you were taking part in a dangerous pastime, like snowboarding. Pre-existing conditions may also be ruled out.

There will also be time restrictions on your policy. Insurers will enforce a waiting period, so you'll only be able to claim if your illness or injury keeps you out of work for a certain length of time. Usually, the waiting period is somewhere between two weeks and three months.

Insurance companies will also enforce a maximum benefit period, so you'll only be able to claim payments for a certain length of time, usually between two years and five years.

Does income also include cover for redundancy?

If you are made redundant, there is a range of insurance providers that offer redundancy cover as an optional extra when you purchase an income protection policy. Redundancy insurance can come in handy if you find yourself out of a job, giving you some short-term financial assistance to get by.

However, redundancy cover won't cover you if you resign. Usually, you need to meet your insurer's definition of involuntary redundancy, which can include the following:

  • If you've been let go from a job that has been paying you a salary of some kind.
  • If you are self-employed and your business has ceased trading because you're no longer able to meet financial obligations.
  • If a contract has been prematurely terminated and not by you (e.g. it was 12 months but was ended by the employer earlier).

Redundancy insurance can be helpful if you think there's a chance you'll be made redundant. Consider the work environment you are in and whether redundancies are common. You should also think about how easy it would be for you to find another job quickly. Check the waiting periods and no claim period on redundancy policies as well. If you do add it to your income protection cover, you don't want to be waiting a long time for a payment to be made.

Is the cover in my superannuation enough?

A lot of people choose to get income protection insurance through their super fund because it's a quick and easy option. However, there are a couple of drawbacks you should be aware of before deciding if this is right for you.

First off, income protection insurance won't be as comprehensive if you get it through your super fund, compared to buying a standalone policy.

Secondly, while funding income protection insurance through your super might not feel like it's costing you anything now, it definitely is in the long run. Without going into the nitty gritty, your super is a pretty safe yet savvy investment, so the more money you leave in the fund, the better.

Besides, income protection insurance is tax deductible anyway, so you can add it to your tax return when it comes around to July. Hooray!

Average Australian income protection quotes

The cost of income protection insurance will vary depending on a number of factors, including your income, your lifestyle, and how much you'd like to be covered for, but it's typically around 1-2% of your average salary.

To give you a rough idea of how much you can expect to pay, we researched average costs across seven Australian brands. Results are based on a 35-year-old non-smoking office worker with no pre-existing conditions listed.

Monthly income (pre tax)Average cost per month (male)Average cost per month (female)Monthly payout range
$4,000$30.58$42.97$3,000
$6,000$47.33$66.60$4,500 - $5,000
$8,000$57.25$80.64$6,000
$10,000$72.23$101.34$7,500 - $8,000

Prices and benefit payouts are based on a 35-year-old, non-smoking office worker with no pre-existing conditions listed. Quotes checked across 8 brands in December 2019.

Is income protection the same as life insurance?

It's important to note that your income protection insurance won't provide any benefits if you die suddenly, so if you're killed in a car crash or suffer a fatal heart attack, you won't receive any payments from your insurance policy.

However, some insurers do provide a death benefit if you die while already claiming from your policy. This means that if you're diagnosed with a terminal illness and begin claiming from your income protection policy, but die 12 months later, you would receive a lump sum.

If you want your insurance policy to offer a payout for sudden death, you may want to consider life insurance in addition to income protection insurance.

Which brands offer income protection in Australia?

A number of insurers offer income protection cover in Australia.

BrandSummaryMore info
VirginVirgin Money won the Best Income Protection category in the 2019 Finder Awards

Read review

AAMI2.8 million Australians have trusted AAMI for their income protection insurance

Read review

NobleOakNobleOak offers extensive income protection of up to $25,000 a month

Read review

MedibankMedibank focuses on affordability and flexibility

Read review

nibnib is one of the few insurers which will pay 85% of your income

Read review

TALTAL has a death benefit which offers a $50,000 lump sum

Read review

ZurichZurich offers worldwide cover and is a good option for those who travel frequently

Read review

InsurancelineInsuranceline has a generous maximum payout period of five years

Read review

Extra income protection benefits to boost your cover

Income protection policies offer both built-in and additional benefits to give you optimal protection in the event of serious illness or injury. Some of these benefits include the following:

BenefitHow it works
Trauma event benefitA lump-sum benefit for trauma conditions that are specified in your policy
Death benefitA lump-sum benefit in the event you pass away
Needle-stick injury benefitThis will pay a benefit if through the course of your occupation, you become infected with HIV, AIDS, Hepatitis B or Hepatitis C as a result of a needle-stick injury or splash injury
Bed confinement benefitA portion of your monthly benefit is paid for each day that you are confined to bed and require the full-time care of a registered nurse
Accommodation benefitWill reimburse an immediate family member's accommodation costs if that family member travels over a specified distance to stay with you
Family care benefitWill pay a benefit if a member of your family is forced to take time off of work to care for you and suffers a reduction in their income as a result
Business expenses benefitThis provides cover for fixed business expenses while you are disabled, enabling your business to keep afloat

These are just some of the benefits you may be able to receive under different policies. Each policy will have details of exactly what's covered in the PDS.

Other guides you may find useful

Income protection sign up deals

InsuranceLine Deals InsuranceLine Deals

Get a $100 bonus gift after 2 months.

Plus, and get 12 months cover for the price of 11 if you pay for Income protection annually. T&Cs apply.

Last verified

Deal ends

Frequently asked questions

Buying cover

Benefits and waiting periods

Payout eligibility and disability definitions

Your policy

Your benefit

Your premium

Picture: GettyImages

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.

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

Ask a question
Go to site