Work in the Northern Territory? Find income protection insurance to suits your needs.
Australia’s Northern Territory is home to some of the most majestic scenery and wildlife in the country, which is why it hosts over a million tourists each year. Whether you live in Darwin, the greater state or anywhere else in Australia, the right income protection insurance can protect you and your livelihood.
Income protection insurance will pay out a portion of your usual income, usually about 75%, if you’ve suffered an injury or illness that prevents you from being able to do your job. It will keep paying until you can return to work or the policy runs out. This means you can take care of yourself and your family should disaster strike.
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To get income protection in Darwin, you may wish to visit an insurer in person to discuss the exact benefits available and to understand what all the terms, conditions, restrictions and limits mean. Alternatively you can compare policies online either via an adviser or directly with an insurer. In more isolated segments of the Territory, it’s still easy to take out income protection insurance online or over the phone.
What must I consider when comparing and applying?
When comparing income protection insurance policies, it’s a good idea to resist going with the first policy you find or comparing by price alone. You need to look at inclusions, exclusions, limits and how well they cover you from likely health issues or injuries. The expansive range of insurance providers in Darwin and elsewhere means you will often be offered the option of bundling income protection alongside life or health insurance. This might get a better return on investment, but it may also result in you paying too much for a policy that isn’t as good.
When taking out income protection insurance, your options may also be limited by factors such as:
- Pre-existing health conditions (eg, recurring illnesses which might cause claims)
- Occupation (such as if you do seasonal work, if you work part-time/casual rather than full time, or if you have a more dangerous occupation)
- Riskier hobbies
- Drug use, alcohol use, smoking and similar health issues
Consider which level of cover you need, how much you’re willing to spend on premiums and what specific situations you want protection from. Decide on flexibilities and think about what they will actually mean in the event that you have to make a claim. For example, if you choose a shorter waiting period it will mean you can start claiming benefits sooner, but it will also raise your premiums (as will making frequent claims).
Location will also affect your premiums according to risk level. For example, in Darwin your income protection insurance premiums may be higher or lower than in the greater NT area, because of different risk factors. You might be more likely to have a vehicle-on-vehicle collision in the city, but be more likely to hit a kangaroo outside of it. Different income protection insurance providers may consider and calculate these risks differently, which can mean different prices for the same type of insurance.
- Find out how different features impact your premium.
- Consider limits, policy duration and waiting periods, and make sure you’re clear on them. Lower limits, durations and waiting periods make for a more comprehensive policy, but also raise premiums.
- Find something right for your income level. The more you earn, the more it will cost, but the more you will get when you claim.
- Consider how different pastimes affect costs. Off-roading on sand dunes is riskier than catching shows in Darwin, and will usually make for correspondingly higher premiums.
What details will I need to disclose when applying?
When you apply for income protection insurance, your insurer will be interested in details such as:
- Your occupation
- Your typical monthly income
- Your hobbies and interests
- Any relevant health issues
- If there are other unhealthy lifestyle factors (eg, smoking)
Income protection insurance and NT workers compensation are two different things.
- Workers comp in NT only applies if you are injured at or because of work, or if you get sick directly because of the job.
- Income protection insurance will pay out no matter how you became sick or injured, or whether or not it was work-related, as long as the injury or illness is covered by your insurance policy and is not excluded.
Stamp duty tax in the Northern Territory is 9%. This financial services tax is placed on a variety of products, including income protection insurance. This amount is declared and paid for by the insurance company, and marginally increases customer premiums.
How does income protection duty in NT stack up against the other states and territories?
|New South Wales||5%|
In NT, as in the rest of Australia, you can claim the cost of income protection insurance premiums as a tax deductible, but only the income protection part. So if you have combined income protection and health insurance, only the premiums from the income protection insurance are tax deductible.
If you make a claim, any benefit payments made to you are taxable and must be declared.
Along with tourism, the NT mining industry is one of the state’s biggest earners. It’s classified as a high risk occupation, meaning income protection tends to be pricier, but also more necessary.
Getting the best income protection value for money in this industry is usually about finding a policy that covers the gaps left by NT workers compensation, or your health or life insurance policies if applicable.
Income protection insurance generally won’t pay out if you’re claiming benefits for the same injury from a different source, however it can still be useful if it pays more, because you can then choose who you want to get benefits from. For example, if you’re a NT miner injured on the job and covered by both workers compensation and income protection insurance, you can choose which you’d like to claim benefits from, and which terms and limits you wish to go with.
All income protection insurance plans come with some typical conditions and exclusions. Some of the more common exclusions are:
- A requirement that you must be actively seeking medical attention for injuries and illness, and following the advice of a licensed medical practitioner.
- Policies will generally not pay out if you were injured while doing something illegal or acting exceptionally irresponsibly.
- Benefits will not be paid 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 illness, or without a licensed medical practitioner’s say so.