Compare income protection insurance in the Australian Capital Territory
If you’re working in the nation’s capital or surrounding area, whether in administration, retail or any other sector, you may wish to think about finding an income protection insurance policy to secure your income.
If an injury, illness or accident leaves you temporarily unable to work, income protection insurance can pay out a portion of your usual earnings until you can get back on your feet. This lets you focus on recovery while also providing for yourself or your family as usual.
How can finder.com.au help workers from ACT?
finder.com.au provides free information to help you decide on an income protection policy and can you in touch with an adviser. These advisers can give you impartial advice and can help you review the different policy options available.
What's in this Guide?
- How do I get income protection insurance in the ACT?
- Do I need income protection if I can get workers’ compensation?
- How much stamp duty is paid for insurance in the Australian Capital Territory?
When looking for income protection insurance you can:
- Compare income protection policies online
- Find an advisor to help you
- Speak with an insurance broker
The ACT is relatively small and Canberra is well covered by professional financial services providers which helps make all options easier.
What to consider when comparing income protection insurance policies
When deciding on a policy, you should look at:
- Limits. These are the maximum benefits payable. The right policy will be one where the limits are high enough to accommodate the majority of your typical income.
- Exclusions. Read the product disclosure statement (PDS) of an insurance policy that you are considering to find the exclusions. These are conditions under which the insurer will not pay benefits.
- Excess. You will be required to pay one or more flat sum additional fees when making a claim. These are known as excesses.
In the Australian Capital Territory you may be offered the choice of bundling income protection insurance with a life insurance policy. This may provide additional cover but will generally cost more overall. If you prefer a standalone income protection insurance policy then these are also available.
Other questions to ask when comparing policies are:
- Do you have pre-existing medical conditions? These increase the chances of you experiencing serious health issues and making a claim. As such, insurers will typically charge higher premiums and/or additional excesses for these, or might draw up policies for you which specifically exclude them.
- Are you self-employed, working casual hours, full-time or part-time? The benefit paid by an income protection insurance policy is dependent on your typical income. This varies widely depending on the answer to this question. Lower incomes generally mean lower premiums, but having inconsistent or undependable earnings may limit your options.
- Do you have risky jobs or hobbies? If you enjoy riskier pastimes like rock climbing around the Australian Capital Territory, or have a more dangerous job like farming in the rural areas just out of Canberra rather than an administrator in the city centre, you should expect higher premiums.
- Are you a smoker or heavy drinker? Are you on any medication? Just like dangerous hobbies, these make you a higher-risk prospect for insurance companies and they will raise your premiums accordingly.
To find a level of cover that works for you and your price range, consider flexible options when available. These can be things like:
- Adjustable excesses. You are sometimes able to choose a higher excess in return for lower premiums.
- Most income protection insurance policies will have specified cover periods. These are the maximum lengths of time they will continue paying out. If it’s 90 days then you will only be paid for this length of time at most. If it’s 30 days then you will stop being paid income benefits after about a month off the job. Many policies let you choose the cover period, and offer much lower premiums for shorter timeframes.
- Choose cover and exclusions. Sometimes an insurer will refuse to cover a particularly dangerous activity and sometimes you might want it excluded to avoid the significant premium increase it will cause.
Ideally you can depend on an income protection insurance policy for as long as you are working the same occupation, industry or paygrade. It can be worth tailoring your policy to balance the level of cover and cost-effectiveness.
What details do I need to provide when getting income protection insurance?
The insurer may want to know about:
- Past or current health issues
Income protection insurance will pay benefits in some situations where workers’ compensation will not.
- Income protection insurance covers you around the clock and in many locations.
- Workers’ compensation only covers you while at work, or from injuries and illnesses that were sustained directly because of work-related activities.
Workers’ compensation is generally more focused on helping you personally recover from work-related injuries and illnesses. Income protection insurance is oriented around providing for your family or partner, maintaining one’s lifestyle and covering additional medical or recovery costs.
Every state in Australia has its own stamp duty, which is a tax paid on financial service products, typically 10%. The ACT is an exception.
Its uniquely low 2% stamp duty reflects fees that are paid on property, but for insurance this is 0%. As of July 2016, there is longer any stamp duty to be paid on insurance products.
|State||Financial services stamp duty|
|New South Wales||5%|
Last checked July 2016.
Income protection insurance for Canberra’s professionals
The ACT is one of Australia’s more educated regions, with a high proportion of professionals in the legal, educational, financial, medical and other industries. Professionals will generally have more consistent full-time employment at higher-than-average salaries. This means income protection insurance can be valuable for maintaining one’s usual lifestyle despite being unable to work, but it also means that it typically has higher premiums. Certain policies may also have limits that are too low for your needs, which is less likely to occur in other professions. The extra costs can be partially defrayed by opting for higher excesses or shorter waiting periods.
Because professional work is less risky than many other occupations, you are correspondingly less likely to be injured on the job and less likely to be eligible for workers’ compensation in the event of an incident. Income protection insurance may be a good option for you as a Canberra-based professional.
You do not necessarily need to use an insurance broker to find the right policy for your needs, but their services can be useful. They can help with:
- Complex insurance issues, such as bundled income protection packages, tax factors and superannuation options if applicable
- Identifying areas of unnecessary cover. If you hold multiple policies, it is possible that some of them overlap and you are paying more than you need to. You cannot claim the same incident on more than one policy, so a broker may be able to identify these and guide you towards a more preferable option
- Making claims. Brokers can liaise with insurance providers, make claims and follow up on them on your behalf. This can be particularly useful for policies that pay out in the event of serious injury or illness such as income protection.
- Clarifying things you are unsure of and answering any insurance questions you might have. It is important that you know both the benefits and conditions of your income protection insurance plan.
The following conditions, and others, may be used as grounds to reject an income protection insurance claim:
- You have failed to actively seek medical treatment. You must be following sensible steps and your doctor’s advice to claim benefits. In short, you must be actively trying to regain your health.
- You put yourself in reckless danger, intentionally inflicted injuries or were doing something illegal. These can be used as reasons to deny your claim.
- You have not passed the waiting period. The waiting period for income protection insurance policies is typically about two weeks. This means you must be genuinely unable to work for this long before you are able to claim benefits. Waiting periods may vary between policies.
- You have not provided adequate proof. You are required to prove your inability to work in order to claim benefits. Your doctor is generally able to provide this evidence.