Can I get income protection insurance if I’m 60 and over?
Yes you can...but here's what you need to know.
The maximum entry age for Income Protection Insurance for most Australian insurers is typically 59 or 60, but some insurers will let you take out income protection cover at higher ages. Here's some expert tips to help you compare:
- Less policies offer cover over the age of 60 (Age of next birthday) so you have less selection.
- Cover maybe expire not long after e.g. at 65
Compare brands offering cover for 60s and over
Brands who offer income protection for 60s and over
|Asteron||"Stepped premium" type only after age 59 (This means the premium increases each year).|
|ClearView||"Hybrid premiums" not available after age 54|
|TAL||Certain occupations are limited to the age of 54|
|Comminsure||When on a level premium|
There are many insurers and options available, but the field shrinks as one gets older. If you're having trouble finding advanced age income protection insurance it may be worth consulting an insurance broker to help you find the available options.
Can my age limit be extended if I bought my policy before 64?
Some policies will let you extend the age limit, but may impose additional conditions after age 65 or some other cut-off point. Other policies will automatically guarantee renewability up to a certain age limit. For example, Suncorp Bill Protect lets you retain cover until age 75, but you need to take out a policy before age 60. Others, such as AIA income protection policies, offer a "2-year benefit period to age 70" option. This can insure you up to age 69, but includes the following conditions:
- Policy owners must be between 61 and 65 years of age at their next birthday in order to be eligible for this benefit.
- Maximum benefit payment of $20,000 applies.
- Only available with a stepped premium structure. Premiums are not available as level or optimum.
- Other benefits received under government age pension will be offset against benefit payable.
- Expiry date is the policy anniversary prior to the policyholders 70th birthday. Therefore, the age limit is 69 despite the name of the option. The cover and any benefit payments being made will be end at this date.
Do I still need to consider income protection in my 60s?
Statistics show that Australians are no longer intending to retire in their early 60s. A 2015 survey by the Australian Bureau of Statistics (ABS)
- 71% of Australians intend to retire at 65 years or over
- A quarter of males intend to work over the age of 70
What's the benefit of having income cover in your 60s?
- Cover against risks: Life today is full of uncertainties; income protection helps you keep up with your expenses if an injury or illness puts you out of work in the short term e.g. a month.
- Reliable source of income during retirement: Insurance is one of the best instruments for retirement planning. The money you save through it can provide a steady source of income during your retirement.
- Tax concessions: Insurance plans provide attractive tax-benefits during the time of entry and exit under most of the plans.
- Helps pay mortgages: Insurance also acts as a tool to cover mortgages and loans taken by the policyholders so that, in case of any unforeseen event, the burden of repayment does not fall on surviving family members.
What does income protection provide?
Income protection provides cover for up to 75% of your regular income (some policies will cover up to 100% if the remaining 25% is contributed to super) in the event that you are forced to take time out of work as a result of serious injury or medical condition. Policies can be tailored to include a whole range of features to give you the right support during your recovery period. Cover for rehabilitation expenses, nursing care and bed confinement are just a few of the benefit available.
What to look for when comparing income protection policies if you're over 60
- Benefit period: Income protection pays you a benefit up to 75% of your gross monthly income. The length of cover may vary between each provider but there are income protection policies which extend cover to age 65. So even if you are 60 or older, there is still something for you.
- Premium waiver: A waiver feature lets you waive the premiums when you are receiving the pay-out, and retain the police without payment of premiums.
- Guaranteed insurability: Also referred to as "guaranteed renewability", this is an important feature. It means the insurer cannot decide to decline your policy renewal, and that you'll retain cover until the expiry age as long as you don't let it lapse. Without this feature an insurer may decide not to renew your cover after a certain age, when the risks, and therefore the chance of paying out, is higher. Moreover, a non-cancellable contract may also let you renew your cover even after making a claim. Policies with this option may cost more than those without, but the security is generally well worth it.
- Waiting period: Another thing that you should be looking for is the length of the waiting period. How long are you willing to wait before you can cash in your claim? Income protection has flexible waiting periods you can choose from between 14 days to 24 months. Some policies offer a no waiting period feature, however, policies with no or short waiting periods typically have higher premiums than those with longer waiting periods.
- Rehabilitation expenses benefit: A feature that benefits anyone over 60, this benefit pays you an additional amount to help with rehabilitation costs. Other income protection policies also have added medical and surgical expenses benefits. This offer will vary from provider to provider. The best way to find out if these add-ons are available is to compare various income protection policies from different insurers.
Ask an Expert