Benefits of Getting an Income Protection Insurance Online Quote

What are the benefits of income protection insurance?

Many Australians may not have thought of an insurance cover to protect their income. But did you know that every year, 235,790 working age parents would suffer a serious illness or injury and 7.5% of them would have to stop working permanently or for an extended period of time (Lifewise, 2010)? As many as 69% of Australians are left at risk with not having a form of protection when they are unable to work, and yet 83% of people will not think twice in insuring their homes and cars (AAMI, 2008).

Income Protection Insurance provides financial security in the event of serious illness or injury to let you focus on your recovery and getting back to work without suffering great financial loss.

Income protection insurance has many benefits which include:

  • Protecting one of your valuable assets: your ability to earn an incomeWith income protection insurance, you can receive monthly benefit payments of up to 75% of your monthly income, to keep up with daily living expenses so you can focus on recovery.What are the Typical Ongoing Living Expenses?
    • Groceries
    • Utilities
    • Bills
    • Short term debts, such as Credit Cards, car loans, personal loans
    • Rent or mortgage repayment, and
    • Education expenses
  • Ability to continue your superannuation contributionSome insurers allow excess benefits of up to 15% which must be used as your superannuation contribution. This means, even if you are unable to work, you will still be able to set aside the funds for your retirement.
  • Income protection premiums are tax-deductibleIncome protection premiums are tax deductible. If you have a combined policy with death or disability cover, it is important to seek advice from your insurer on the portion of insurance premium paid that may be tax-deductible. If the split is unable to be determined, you will not be able to claim tax deduction at all.
  • Income protection is a flexible insurance policy that you can tailor according to your needs.There are various in-built features and extra benefits that you can add onto your income protection policy for additional costs to provide a more comprehensive coverage that you may require. For example, you may not be required to pay premium whilst you are receiving the benefits if your policy is equipped with a premium waiver feature.

Unlike WorkCover, income cover will provide protection for illness or injuries sustained outside of the workplace and it comes with a range of benefits and features to let you tailor the policy towards your needs. Nowadays, you can also compare different policies and obtain income protection quotes easily online, allowing you to make more informed decisions.

How Much Income Protection Insurance do I Need?

To determine how much income protection coverage you may need, Life Insurance Finder’s Income Protection insurance calculator can give you an estimate of the benefit you will receive. Since income protection insurance can only provide coverage for up to 75% of your income, the calculation will usually be based on the formula:

Current income per annum x 0.75
= Suggested income protection cover amount

You can find Life Insurance Finder’s online Income Protection calculator here.

It is worth considering your day to day expenses in order to determine what will need to be covered when you receive your benefit, such as:

  • Groceries
  • Rent or mortgage repayments
  • Bills
  • Short-term debts: Credit Cards, personal loans, car loans
  • Education expenses
  • Other ongoing expenses and debts

Why Should I Get Income Protection Insurance Quote Online?

Once you have determined how much income protection insurance you may need, the next step is to obtain a free quote from an insurance consultant who will compare different policies on the Australian market for you, saving you both time and money. Once you have received a quote, a consultant can help you compare the different policies available and explain the specific benefits and conditions.

There are many additional benefits of receiving income protection insurance quotes online:

  • It’s fastAll you have to do is enter your basic information, such as your age, occupation, and annual income, and you can get an instant quote in a matter of minutes.
  • It’s efficientInstead of having to go from one insurer’s website to the other, you can compare multiple products across the Australian market at once. This will save you time and you can make informed decisions on which product will be more suited to your situation and your budget.
  • It’s safeCare is taken to ensure the information you provide is kept secure. Only the essential details will be asked for so that a preliminary quote can be generated based on what you have provided.
  • It’s obligation-freeYou will not be pressured to make a decision on an income protection policy when you make a request for an online quote.
  • It’s clearOnce you have compared the quotes you have received, you have the option to request for more information on specific income protection plans. An insurance expert will be able to give you a call and provide a clear explanation on product features. This will help you determine whether the policy is right for you.

Tips to Consider When Comparing Quotes and Buying Income Cover Online

Comparing online quotes on various income protection policies before buying is essential because of the large number of insurance companies offering this type of insurance and their quotes can vary substantially. Keep in mind that the cheapest quote you receive may not necessarily mean you are getting the best policy in the market. To ensure that you are getting the best policy within your budget, consider the following few tips:

  • Read the fine print thoroughly: It is essential that you read the policy's Product Disclosure Statement (PDS) carefully, as it will outline what is or is not covered, and the exclusions. Don't be afraid to ask questions about anything you don't fully understand and if you feel it's necessary, ask to have the answer placed in writing.
  • Keep on a lookout for offset clauses: be aware of any offset clauses in the policy which may allow a reduction in your benefit payment amount if you have other sources of income, such as WorkCover payments or sick pay from your employer.
  • Check the clauses concerning occupation definitions: Make certain the policy you purchase is suitable for the type of occupation you're involved in.
  • Know and understand any policy restrictions: Can the insurance company cancel or amend the policy in any way? Are you able to increase your coverage if you feel the need to do so?
  • Fully understand your own income needs: Be satisfied you can comfortably live within the income stream the policy will deliver.
  • Question any of the policy’s shortcomings: If something isn't covered and you feel it should be, it is important to check with your insurer. Do not accept the offer if it doesn't meet your expectations.

How is My Income Insurance Protection Online Quote Determined?

Online income protection quotes will give you a rough idea on how much income protection premiums will cost. But how is it actually determined? It is important to remember that online quotes are generally generated without taking into consideration personal details that may have an effect on the premium cost when it is underwritten.

Factors that Affect the Level of Premium You Pay

Annual income
If you are in the high income bracket, you will pay higher premiums because the amount insured is higher.
The older you are, the higher the risk you carry.
Women pay higher income protection premiums than men due to the assumptions that women are more likely to put a claim and they tend to require longer periods of recovery.
Occupation: high risk and low risk
Low risk occupations such as office workers will pay lower premiums compared to high risk occupations such as construction worker.
Lifestyle: smoking, drinking, pastimes
If you are a smoker, drink alcohol more than the average consumption, or participate in high risk activities such as extreme sports, you will pay higher premiums.
Pre-existing health conditions
Certain health conditions may lead to an increase in the level of premium you pay.
Type of policy: Agreed vs Indemnity value
With Agreed value policy, the benefit amount you receive is determined at the time of application and you will be required to provide financial documents to prove your salary. Indemnity value policy will assess the benefit amount you receive at the time of claim. You are required to provide financial evidence of your income at this time. This means, if you have a reduction in your income since you applied for income protection cover, your benefit will also be reduced.
Waiting period
The longer the waiting period you choose, the cheaper your premiums will be. You may need to assess your financial situation carefully when deciding on the right waiting period for you.
Length of cover
Also known as benefit period - it may be better to opt for a longer coverage to anticipate long-term injuries or illness, the premiums you pay will also generally be more expensive. It is important to consider whether you will be able to afford the premiums in the long run when your circumstances change.
Policy extras
Income protection insurance provides extra features and benefits that you can add onto your policy for a more comprehensive cover, with additional costs. It is essential to assess which additional benefits are most suited to your needs, as the more benefits you have on your policy, the more expensive it will be.
Financial Situation
The applicants job security is also a key factor in how they are assessed. Someone with a fluctuating salary such as, a self-employed worker, can often be considered a greater risk to insure.

With all the personal information provided, an insurance provider will be able to accurately predict how many policyholders are going to make a claim at any time into the future. They cannot predict the actual person who'll make the claim but they will know how many in any given number will make successful claims. From all this, your income protection insurance online quote will be determined.

No matter how much income protection you need, the amount of the policy you require will still depend on you. Therefore, take the time to do your research on different plans and insurers, and compare the prices before making the final decision. The bottom line is for you to get an income protection policy that will greatly benefit you when you need it.

Compare income protection quotes from these direct brands

Name Product Short Description Maximum Monthly Benefit Maximum % of Income Covered Maximum Benefit Period Waiting Period
Protect your lifestyle with Virgin Income Protection and new eligible customers can earn 25,000 Velocity Points. Ends 31 Aug 2018. Min monthly premium and T&Cs apply.
5 years
14, 28, 60, or 90 days
Cover up to 75% (to a maximum of $25,000) of your monthly income with NobleOak Income Protection. Benefit period can be tailored to suit your needs.
2 years or to the age of 65
30 or 90 days
Cover up to 75% of your monthly income if you can’t work due to illness or injury, up to a maximum of $10,000 a month. Take out cover today and you could get a bonus $100 Gift Card.
5 years
30 or 90 days
Cover up to 75% (to a maximum of $10,000) of your monthly income with Guardian Income Protection.
5 years
30 or 90 days
Receive up to 75% of your income (up to $10,000 per month) if you're unable to work due to serious illness or injury.
5 years
30 or 90 days

Compare up to 4 providers

Maurice Thach

An insurance researcher and writer for who loves finding an answer to the question "Am I covered for ________?" Maurice has also completed a Tier 1 Life Insurance and a Tier 2 General Insurance Certification under ASIC's Regulatory Guide 146. This means he can confidently provide general advice for life insurance and non-life insurance products.

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