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Income Protection Insurance Comparison
Compare income protection insurance features and benefits in seconds.
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
Compare income protection insurance brands in Australia
Compare features and then click the green button to tailor your quote. If you're a high earner, keep an eye out for the maximum monthly benefit as it varies between brands.
Types
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Find the right cover for you
Speak to an advisor to compare your income protection insurance options
An adviser can help you find cover from trusted life insurance brands.
- Get competitive quotes from multiple brands
- Lower rate of declined claims (according to ASIC)
- Save time and effort
What's in this guide?
How does income protection insurance 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 two or five years. In some cases, you may be able to receive benefits 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 you 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?
When you have financial obligations, such as a lease, mortgage or car loan
When you are planning to have a family and your partner may take extended time off
When you become self-employed or start a business
When you have a partner or dependents who rely on your income
What do I need to know when doing an income protection comparison?
Comparing income protection insurance online is the easy way to find a policy that is right for you. However, there are some key terms you'll need to understand before getting started:
Maximum monthly benefit
Maximum % of income covered
Maximum benefit period
Waiting period options
Expiry age
Stepped premiums
Level premiums
Extra 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 the following:
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.
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 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.
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?
You can hold a policy 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?
The length of time that you can receive benefits is listed in your PDS. For most insurers, it's a maximum of 2 or 5 years, but some will pay out until you reach the age of 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.
Sofia: $45 a month
☑️ 30 years old
☑️ Non-smoker
☑️ Graphic designer
Caleb: $84 a month
☑️ 40 years old
☑️ Smoker
☑️ Mechanic
Jess: $222 a month
☑️ 50 years old
☑️ Smoker
☑️ Carpenter
Luca: $149 a month
☑️ 60 years old
☑️ Non-smoker
☑️ Accountant
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Comparison of 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.
| Factor | What happens? |
|---|---|
| Biological sex | Premiums are generally cheaper for men |
| 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 |
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. 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.
| Benefit | What it means |
|---|---|
| Death benefit | A lump-sum benefit to your family if you die |
| 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 |
| Specific sickness or injury | If you suffer a specific sickness or injury, the insurer may pay a lump-sum benefit |
| 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 and help you return to work |
| Return to work | Pays a bonus if you complete an approved rehabilitation program and return to work |
| Needle-stick injury | This 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 surgery | Pays a monthly benefit if you remain totally disabled due to cosmetic or elective surgery |
| Spouse | If your partner or spouse has to stop working due to your medical condition, the insurer may pay a monthly benefit |
| Nursing care | If you need the full-time care of a nurse, the insurer may pay a benefit before the waiting period is up |
| Holiday injury | Pays a 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 |
| Accommodation | Covers accommodation costs for any immediate family members if you are totally disabled and confined to a bed or hospitalised more than 100km from home |
| Relocation | Reimburses the cost of a flight home if you are permanently disabled outside of Australia |
| Automatic indexation | To help protect against inflation, the insurer may automatically increase your benefit amount in line with the CPI |
| Premium pause | This allows you to pause your premiums, and your cover, for a set period of time and for pre-agreed reasons |
| Premium waiver | If you're receiving benefits, the insurer will waive the premium throughout that period |
| Guaranteed future insurability | Allows you to increase your monthly benefit by a certain percentage when your salary increases, without providing further evidence of your health |
| Member benefit | May pay an additional benefit if you have other forms of insurance with the same company |
Compare the types of income protection insurance
There are different types of income protection insurance – retail, direct and through a super. Each option has its own pros and cons.
| Info | Pros | Cons | More | |
|---|---|---|---|---|
| Retail | You'll usually buy a retail policy after speaking to a broker |
|
| Speak to a broker |
| Direct | You'll buy a policy directly from the insurance company |
|
| Compare online |
| Super | Your super fund will provide cover to its members. It may be optional. |
|
| Learn more |
Compare brands offering income protection insurance
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
❌ 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
❌ 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
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 life insurance policies 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 policy | What it does |
|---|---|
| Life (death) cover | Pays out a lump sum if you die or, in some cases, are diagnosed with a terminal illness |
| Trauma insurance | Pays 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 insurance | Covers the cost of your funeral up to a certain amount |
| Personal accident | Pays a lump sum if you're injured or killed, but does not provide illness cover |
| Mortgage protection | Covers your mortgage payments if you die, become seriously ill or lose your job |
| Salary continuance | Like income protection but more restrictive and is only available through your super |
Still not sure?
Income protection insurance can be tricky to understand at first, but don't give up. Give our beginner's guide a go and see if that helps.
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.
Frequently asked questions
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.
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 adviser?
Both options have pros and cons. An adviser will be able to help you find cover that 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.
Picture: GettyImages
Icons made by Nikita Golubev, Freepik from www.flaticon.com
Read more on this topic
- Cost of living comparison
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- Income protection for single parents
Find out why you need income protection if you’re a single parent.
- Is income protection worth it for students?
Find out how students can benefit from income protection insurance.
- Should renters get income protection?
Why renters need to consider income protection.
- Income protection for builders
The ins and outs of income protection insurance for builders.
- Income protection for tradies
The tradies guide to income protection insurance.
- Income protection lump sum payout
Everything you need to know about income protection lump sum payouts.
- Individual Income tax rates in Australia
Find the latest income tax rates set by the ATO
- Income protection for couples
Income protection for couples ensures your partner isn't hurt financially if you are temporarily unable to work due to illness or injury.
- Income protection for cyclists
Income protection for cyclists can provide you with a monthly payment if you're involved in an accident, providing you with peace of mind and time to get better.
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