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Income protection waiting period

Income protection waiting periods range from 14 days to 2 years and could mean you wait longer to receive your benefits.

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When you apply for income protection insurance, you'll be asked to select a waiting period. A waiting period is a pre-selected amount of time that must pass before you can start receiving income protection benefits. During this time you won't be able to work or receive an income or you risk losing your benefits after the waiting period is over.

Waiting periods usually range from between 14 and 90 days but in some cases can be as high as two years. Having a longer waiting period will mean that your premiums are cheaper, because longer waiting periods lessen the chance of you claiming on your insurance. Before choosing the cheaper option though, you should always consider how long you'll be able to get by without any income payments coming in.

Compare income protection waiting periods

You can use our comparison table to get quotes from different insurers and compare the impact of different waiting periods on your premiums. We've shown all the different waiting period options each insurer offer to give you an idea of what you can choose from.

Name Product Maximum Monthly Benefit Maximum % of Income Covered Maximum Benefit Period Waiting Period Options
AAMI Income Protection
$10,000
75%
5 years
14, 28, 60 or 90 days
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 get 12 months cover for the price of 11 if you pay annually. T&Cs apply.
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What is an income protection waiting period?

An income protection insurance waiting period is the amount of time that must pass before you are eligible to receive income protection benefit payments. Most insurance policies have a waiting period because it prevents people from simply taking out a policy when they become sick, injured or ill.

You'll often be given a choice of waiting period when signing up, typically ranging from 14 to 90 days. Shorter waiting periods tend to cost a little more but you can claim faster, whereas a longer waiting period may reduce your costs but won't help you out in any sudden claims.

How do waiting periods work?

The waiting period begins from the date that you make a claim. So for example, if you take out a policy with a 30-day waiting period and make a claim on 1 June, the waiting period will end on 1 July.

Income protection insurance policies are generally paid in arrears in monthly instalments. This means that once you have cleared your waiting period, you will have to wait another 30 days to accrue a month's worth of benefit which is then paid to you.

It's important to remember this when selecting a waiting period as you will not begin receiving your payments on the day your waiting period finishes. Instead you will begin accruing you benefit on that day.

The example in the table below breaks down how a waiting period works:

Claim eventDatesNumber of days since claim
Date you make a claim (30 day waiting period begins)1 June.0 days
Waiting period end date (Start accruing monthly benefit)1 July30 days
First payment received after 30 more days1 August60 days

In this scenario you begin accruing your benefit on 1 July and will be paid after 30 days for the period 1 July to 1 August. So the total amount of time before you receive any payments after making your claim is 60 days.

What waiting periods are offered by Australian insurance brands?

Most income protection insurance waiting periods are between 14 and 90 days. Many will give you a number of options, for example 14, 28, 60 or 90 days. In most cases, you won't get income protection insurance with no waiting period. Check out the table below to see what choices you have.

BrandWaiting periods offered
AIA14 days, 30 days, 60 days, 90 days, 1 Year, 2 Years
AMP30 days, 60 days, 90 days, 180 days, 1 Year, 2 Years
Asteron14 days, 30 days, 60 days, 90 days, 1 Year, 2 Years
BT14 days, 30 days, 90 days, 180 day, 360 days, 720 days
ClearView14 days, 30 days, 60 days, 90 days, 180 day, 1 year, 2 Years
Comminsure30 days, 90 days,
MLC14 days, 30 days, 90 days, 1 Year, 2 Years
OnePath14 days,30 days, 60 days, 90 days, 180 days, 1 Year, 2 Years
TAL Accelerated Protection2 weeks, 4 weeks, 8 weeks, 13 weeks, 26 weeks, 52 weeks, 104 week
Zurich Futurewise30 days, 60 days, 90 days, 180 day, 1 year, 2 Years
Zurich Wealth Protection14 days, 30 days, 60 days, 90 days, 180 day, 1 year, 2 Years
ANZ30 days, 90 days
NobleOak30 days, 90 days
Virgin14 days, 28 days, 60 days, 90 days
Zurich Ezicover30 days, 60 days, 90 days
InsuranceLine14 days, 28 days, 60 days, 90 days
Real30 days, 90 days,
TAL Lifetime Protection2 weeks, 4 weeks, 13 weeks, 2 years

What's the right income protection waiting period for me?

Not sure what income protection waiting period is right for you? Check out the pros and cons below.

Shorter waiting periods

Pros

  • You get paid faster
  • Peace of mind, knowing you won't need to worry about paying bills

Cons

  • It tends to be more expensive
  • You might not need it that quickly, for example, you may have accrued enough sick days to get by

Longer waiting periods

Pros

  • Premiums tend to be cheaper than shorter waiting periods
  • If you have enough savings, you might not need the payments immediately

Cons

  • In some cases, it can be a long time to go without an income
  • You might need it earlier to pay bills, rehabilitation costs and more

Can you get income protection insurance with no waiting period?

In most cases, no. All policies have a waiting period that you will need to serve, unless you have Day 1 accident cover or a specific injury benefit (more on this in the below section). However, with some insurers, you probably won't need to serve a new waiting period if you return to work and your sickness or injury recurs within a few months of your last benefit payment.

The amount of time you will be eligible for this depends on the insurer so it's always best to consult the product disclosure statement or call them. Generally speaking though, you will find that you are still eligible if it occurs within six months of your last benefit payment.

However, this won't apply if your sickness or injury is due to an unrelated cause. In these circumstances, you will have to serve a new waiting period.

Do any income protection policies offer no waiting periods?

Some policies offer features that allow policyholders to skip a waiting period.

Specific injury benefit

Many income protection policies offer a specified injury benefit which provides an advance payment separate to the ongoing benefit payment for certain conditions. This advanced benefit will usually begin from the date of the injury, regardless of the choice of waiting period. Injuries that may be covered under the specified injury benefit include:

  • Paralysis
  • Loss of one arm or leg
  • Loss of sight in one eye
  • Fracture of thigh
  • Loss of sight
  • Loss of both feet or both hands

Day 1 accident cover

Day 1 accident cover allows you to surpass a waiting period if an injury leaves you disabled for more than three consecutive days. This allows you to access a portion (usually a daily rate) of your monthly benefit before your waiting period.

An income protection waiting period scenario

After putting it off for years despite the insistence of his partner, Karen, landscape architect Ken finally took out income protection insurance following the birth of their first son, James. After speaking with his insurance consultant, Ken decided that a waiting period of 30 days should be adequate given the sick leave and annual leave he would be entitled to and the savings he could fall back on.

Two years later, while playing football, Ken suffered a major double fracture to his ankle requiring immediate surgery and rendering him unable to work. Ken submitted his claim for income protection on 1 April and was luckily able to draw on sick leave and annual leave payments during the 30-day waiting period. Ken received his first monthly payment on 31 May and was under claim for a total of 3 months while his ankle healed and he was able to return to work.

Can I change my waiting period later on?

This will depend on the policy you choose. Most insurers will let you make adjustments to your policy at later stages, such as adjusting the payment structure or increasing or reducing the level of cover.

If you are able to change your waiting period, it will affect your premiums. For example, if you reduce your waiting period from 30 to 14 days, your premiums will increase. However, if you increase your waiting period, your premiums will most likely come down. Make sure that you won't be charged by your insurer for simply changing your policy waiting period.

Can I have multiple income protection policies with different waiting periods?

Yes. In fact, this is one of the main reasons many people have multiple income protection insurance policies. Although income protection benefits are capped at 75% of your income (meaning that if you have two income protection policies and claim on both, your total payout will always be 75% of what you earn) having two can be a good idea. For example, if you have a policy with a waiting period of 30 days and another with a 2-year waiting period, you will be able to receive payments for benefits covering you for both short- and long-term financial loss as a result of injury or illness.

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2 Responses

  1. Default Gravatar
    JoJuly 23, 2017

    Dear Sir/Madam,
    I have 2 lots of income protection through 2 separate super companies with a 1 month and 3 month wait period respectively, with no exclusions and a 2 year benefit period; and I also have income protection outside super with a 2 year wait period and a mental health exclusion (because I saw a counselor for 1 session) but cover until the age of 65. My question is; is it possible to claim for 2 years on one super policy and when that 2 year benefit finishes can I then claim on the second super pllicy for another 2 years before then claiming (after 4 years) on my policy outside of super? Or should I cancel one of the super policies? I am hoping that I would be covered for mental illness for a benefit period of 4 years if I am able to claim on my 2 super policies consecutively without voiding my policy outside super if I develop some other health issue that prevented me from working until age 65.
    Thank you

    • Default Gravatar
      JonathanAugust 3, 2017

      Hello Jo,

      Thank you for your inquiry, you got a very interesting question right there! :)

      Generally, you can. Take note, that there may be some limitations and terms that you need to agree on with your super, so you need to declare the existence of one unto the other. Moreover, some of them may require that your medical documents (to prove your claim) has a certain validity, so you need to confirm this if you’re planning to file a claim for the same medical reasons.

      There are insurers who would require full-recovery in-between your claim on the same policy, so it may be a good idea to check this also.

      If you need professional advice, you may talk to your insurer or talk to an income protection insurance broker.

      Hope this helps.

      Cheers,
      Jonathan

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