Live in Tasmania? Find the income protection insurance that’s right for your needs.
Tasmania is one of Australia’s most unique states, enjoying a cooler climate and spectacular natural scenery around every corner. Whether you’re enjoying the lifestyle in Hobart or working in the thriving fisheries industry, it is worth considering the benefits offered by income protection insurance. If something goes wrong in the form of injury or illness, it can keep you moving forwards by paying out a portion of your usual income, typically 75%, until you're able to go back to work.
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What's in this guide?
- How do I apply for income protection if I live in Tasmania?
- Do I need income protection insurance if I get TAS worker’s compensation?
- How much stamp duty do I pay for income protection in TAS?
- Income protection vs TAS worker’s compensation in the fishing industry
- Should I use an insurance broker? How can they help?
- When will income protection insurance not pay out?
How do I apply for income protection if I live in Tasmania?
To apply for income protection insurance in Hobart, you can speak to insurers directly about both the cover and the conditions associated with their Tasmanian income protection policy. You can also apply for income protection online either:
- Directly with the insurer
- With an insurance adviser
Alternatively, you can find insurance brokers in Tasmania to help you navigate the issues involved.
No matter where you are in Tasmania, you’ll almost always be able to contact an insurer online or over the phone, and can typically take out insurance policies without being there in person.
What should I look for when applying?
When finding the right income protection insurance policy for your needs, you will have to carefully look over the relevant terms and conditions, including limits, exclusions and anything else. Many Tasmanian income protection insurance providers will give you the option of bundling it with life insurance or health insurance, which may or may not be the right choice for you. The costs and coverage levels tend to vary depending on where you go.
However, one thing they all have in common is that they will want to know about:
- Any pre-existing health conditions
- Whether you work full-time, part-time or casually
- If you have a hazardous job or enjoy risky pastimes
- Smoking and other lifestyle factors
- Alcohol and drug use
Make decisions on your ideal level of cover before you apply, and consider any flexibilities available. Lower premiums generally come at the cost of less cover, so try to strike a balance with an income protection insurance policy that protects you from realistic hazards without breaking the bank.
- Do you want lower excesses and higher premiums, or higher excesses and lower premiums? Some providers will offer you a choice.
- Do you want to pay more for a longer cover period? Most policies have maximum cover periods, after which they will no longer pay your income. This may be anything from months to years.
- What’s your typical monthly income? The more you earn, the more the insurance company has to pay if you make a claim, which leads to higher premiums. If you have a high income, look carefully at any limits.
- What do you want covered? You can often choose what you’d like cover for, and may have the option to pick things like sporting injuries, car accidents, injuries sustained on holidays overseas, and other specifics. Alternatively, you may be choosing between predefined policies to find the one that best suits you.
What personal details will I need to disclose?
Some of the details you will need to provide are:
- Health issues
- Lifestyle factors
- Anything else they ask for
Do I need income protection insurance if I get TAS worker’s compensation?
Income protection and worker’s compensation are two different things. Tasmanian worker’s compensation schemes only apply to work related injuries and illnesses. That is, injuries sustained while actively at work or illnesses caused mostly by the work.
In the event of these work related illnesses or injuries, your employer is liable for reasonable expenses relating to medical, hospital, nursing and ambulance services, attendant care, rehabilitation and household services if needed, and travel expenses to and from hospitals or other medical centres. By contrast, income protection insurance will pay out for any injury or illness that prevents you from working, even if the cause wasn’t work related. It offers cover around the clock, anywhere in Tasmania and Australia as a whole, from both work and non-work related injuries and illnesses.
Income protection insurance will pay a proportion of your normal income, while Tasmanian worker’s compensation typically pays lump sums during the disablement period (the time in which you can’t work), as well as costs for medical and rehabilitation expenses.
How much stamp duty do I pay for income protection in TAS?
Stamp duty is a tax placed on a variety of financial service products, including income protection insurance. In Tasmania the stamp duty is 10%, which will be declared and paid for by your insurer and factored into the cost of your premium.
Stamp duty of income protection by state
|New South Wales||5%|
TAS income protection for commercial fishing
Fishing is one of Tasmania’s most important industries, but it’s also widely recognised as being one of the riskier occupations. This means you can expect to pay higher premiums on life, health and income protection insurance. One of the problems Tasmanian commercial fishers face with income protection insurance is the seasonal nature of the work, and a commission based pay structure dependent on the amount caught. This leads to fluctuating income levels throughout the year.
This can make it difficult for an insurer to calculate your average monthly income, and it is possible that you will end up being covered for too little. Relatedly, the high occupational risk levels mean higher insurance premiums which might not be value for money.
The best option is to rely on your employer’s insurance wherever possible while on the job, in the form of private employer health insurance, Tasmanian worker’s compensation schemes and similar. This lets you get cost effective coverage for hazards on the job. From there, you may wish to look for a flexible income protection insurance policy that fills in the gaps left over.
You also want to be aware of the difference between insuring at indemnity value and at agreed value. When taking out income protection insurance, you are able to choose one of these two options, which is essentially the sum insured value of your typical income.
- Indemnity value means the payout for claims is based on your income at the time of making a claim. With this option, you are required to submit proof of income when making a claim, which will determine how much the payout is. This option is good for people with consistent income, or one that is only likely to increase.
- Agreed value means the payout for claims is based on an amount agreed to at the time you take out the policy. This is good for people with a fluctuating income like seasonal fishery workers, or those who may expect to earn less in the future than they do now.
Should I use an insurance broker? How can they help me?
Insurance brokers can be particularly useful when it comes to navigating complex insurance issues. You can find a lot of income protection insurance brokers in Hobart, and they’re particularly good at helping business owners with insurance for employees.
Insurance brokers are good for Tasmanian income protection insurance because they can help you with issues such as:
- Overlaps between private and employer health insurance
- Having too many options and not knowing where to begin
- Making claims more efficiently and effectively
- Clearing up any difficulties or misconceptions of insurance policies
- Answering any questions or walking you through the steps of signing up and claiming
When will income protection insurance not pay out?
All income protection insurance plans come with some typical conditions and exclusions. Some of the more common are:
- A requirement that you be actively seeking medical attention for injuries and illness, and following a licensed medical practitioner’s advice to get better as soon as possible
- Plans will generally not pay out if you were injured while doing something illegal or acting exceptionally irresponsibly
- They will not pay until the end of the waiting period (the minimum amount of time between being injured and claiming benefits)
- You cannot claim if you cannot prove an inability to work due to injury, or without an approved medical doctor saying so