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Searching through lots of different policies can be hard. Compare plans side-by-side, and take the hard work out of finding the right policy for your needs.
To date, we've helped more than 85,000 Australians compare income protection. We'll never give you the sales pitch, and we'll avoid complicated jargon when we can.
Income protection can pay you a regular cash sum if you're unable to work after an accident or sudden illness or if you've lost work through no fault of your own.
The payouts from an income protection policy can help you meet your ongoing financial commitments, such as mortgage payments and other bills. And it can keep your family's lifestyle going while you recover. In some cases, it will even replace your salary if you're made redundant.
Income protection covers up to 75% of your income for a set time, such as 2 or 5 years. So, if you earn $5,000 a month, your payout would be capped at $3,750 a month. Generally, monthly benefits are based on your income at the time of claim.
There is a fixed length of time to receive benefits. In most cases, the maximum is either 2 or 5 years. But some insurers will offer a benefit period until the age of 65.
Finder surveyed 8,000 Australians and just 35% said they would be able to last more than 3 months if they lost their job tomorrow.
One way to buy income protection insurance is directly via an insurer. Or you could go via an intermediary, such as a financial adviser. Additionally, you can get income protection in your super fund.
Comparing income protection insurance online can be an easy way to find a policy that's right for you.
Let's have a look at the main ways you can protect your income.
Pays you a monthly benefit – usually between 75% and 85% of your income – if you get sick or injured and need to take some time off work. It's paid until you return to work, you reach a set age or the policy's agreed period is reached.
Check to see if you have any income protection in your super account as that may also offer a benefit. You'll want to see whether the amount of coverage is enough, depending on your circumstances.
This type of insurance gives you short-term financial support if you unexpectedly lose your job. You'll often see redundancy cover offered as an optional extra with income protection.
This insurance covers you for injuries or illnesses suffered in the line of work and that isn't covered by workers' compensation insurance.
A type of insurance that only covers your mortgage payments. It's often taken out at the time of signing up for a home loan. Both your repayments and interest can be covered.
Typically pays out for short periods (such as 1 to 2 years) for the loss of income after an illness or accident. This policy can be cancelled by the insurer at any time.
If you answer NO to any of these questions, you should seriously think about income protection insurance:
Would you – and your family – be able to make ends meet for more than a few weeks without your income?
Do you have savings to tide you over for a few months or more so that you can keep paying bills, such as your credit card and mortgage?
If you get sick or injured, would you be happy to go with basic healthcare for your recovery?
If you're entitled to government benefits, are you sure they would be enough to pay all your bills?
Do you know how any insurance cover you hold in your super fund actually works?
ASIC figures show that more than 4 in 5 policyholders (86%) hold TPD insurance inside their superannuation. This is approximately 9 million Australians. However, many won't be aware that super funds offer "any occupation" TPD, which is a more restrictive insurance.For a lot of people, yes. Our research shows that a healthy 20-year-old could protect their monthly income from just $23.10* per month. A 40-year-old could find cover from as little as $30.09** monthly.
Income protection insurance is often cheaper than car insurance, health insurance or gym membership.
While those other expenses are important, they can't save your car or home from being repossessed. Income protection insurance can. Read more on the value of income protection in our guide.
*This figure was for a non-smoking 20-year-old male earning a yearly income of $50,000, taking out a basic policy with TAL.
**This figure was for a non-smoking 40-year-old male earning a yearly income of $50,000, taking out a basic policy with TAL.
Finder looked at 14 brands and found these were the lowest available quotes as of January 2021.
Many income protection policies will offer additional perks and benefits when you sign up with a policy. These can include first-month premium waivers, bonus gifts and savings from top retailers. Always check the T&Cs before applying. New rules being implemented by the Australian Prudential Regulation Authority (APRA), the financial regulator, are shaking up income protection policies. Broadly, the changes are leading to far less generous income protection policies for some consumers. Find out why now could be a great time to act on a new income protection policyIf 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? Answer these key questions:
If you could easily live on 50% of your wage, there might not be much point in getting a policy that 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.
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.
Check to see if you have other policies, such as any with your employer or your super fund. But keep in mind that these types of cover options aren't always as generous as standalone income protection.
Income protection gets more expensive as you age, so getting in early can be more affordable.
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.
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.
| Factor | What happens? |
|---|---|
| Biological sex | Premiums are generally cheaper for men than women |
| Age | Younger people pay less for income protection insurance |
| Profession | People in high-risk or very physical jobs will pay more for income protection |
| Health | People with pre-existing medical conditions may pay more or face more exclusions |
| Smoking habit | Smokers will pay more for premiums or be declined cover altogether |
| Benefit amount | The higher the potential monthly benefit, the higher the premiums |
| Waiting period | Setting a longer waiting period will reduce your premiums |
| Benefit period | A shorter benefit period will mean cheaper premiums |
| Additional benefits | Policies with lots of added extras may be more expensive |
| Hobbies | People with high-risk hobbies may face more exclusions or higher premiums |
| Benefit | What it means |
|---|---|
| Terminal illness benefit | Pays a lump sum if you're diagnosed with a rapidly progressing terminal illness |
| Permanent disability benefit | An extra lump sum if your injury or illness makes you permanently disabled |
| Partial disablement benefit | The insurer may pay a reduced benefit if you are still able to work in some capacity |
| Recurring disablement | If 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 benefit | Pays a lump sum if your child sustains a specific injury or, in some cases, a specific illness |
| Rehab benefit | Pays an extra monthly payment to cover the cost of rehabilitation to help you return to work |
| Spouse | If your partner or spouse has to stop working due to your medical condition, the insurer may pay a monthly benefit |
| Premium pause | Allows you to pause your premiums, and your cover, for a set time and for pre-agreed reasons |
| Premium waiver | If you're receiving benefits, the insurer will waive the premium throughout that period |
| Member benefit | May pay an additional benefit if you have other forms of insurance with the same company |
How much could you save if you lived in a different city in Australia? Find out here.
Financial literacy advocate Pascale Helyar-Moray on what women do to avoid losing out to higher costs.
Looking to protect your income in case of a serious accident or illness? Consider getting combined sickness and accident insurance.
Income protection can be a valuable form of cover for Australians when its features are fully understood.
Here's how to compare your options for bill protection insurance to protect you if you're unable to earn an income due to injury, illness and redundancy.
Learn how income protection can help – whether you’ve already got coverage or you’re thinking about buying it.
The right insurance broker can assist you in finding the right policy by comparing the market based on your specific needs.
Find out why you need income protection if you’re a single parent.
Find out how students can benefit from income protection insurance.
Why renters need to consider income protection.
Is there a policy that provides income protection when becoming temporarily unemployed after having been working & with income protection plan cover?
Hi Alf,
Thank you for leaving a question.
This depends on the reason as to why you are unemployed temporarily, but for information you can check our beginners guide to income protection. This page will also give you options on income protection plans available.
Cheers!
Val
I live in Ethiopia i want sponsor
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
main isake lie aavedan kaise kar sakata hoon…
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
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.
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
If a person has been treated for cancer more than 5 years ago will this affect pay out.
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