Income Protection or Personal Accident Insurance?

Find out whether income protection or personal accident insurance is more suitable for you

Although both policies are designed to replace your income, there are some key differences you should know about.

Income Protection vs Personal Accident Insurance


1. Income Protection

2. Personal Accident Insurance

What type of coverage is provided?Replaces part of your income if you're unable to perform duties of their occupation for a range of illnesses/conditionsReplaces part of your income in the even of accidental injury
Does it provide short term or long term cover?Long termShort to medium term
Can it be cancelled by the insurer?Policy cannot be cancelled by life insurance company. Policies are guaranteed renewable (cannot be cancelled and premiums cannot be increased)Policy can be cancelled or renewal declined if there are changes to policyholders health or occupation
Maximum benefit lengthBenefit may be paid up to the age of 65Benefit payment capped at five years
Who provides this policy?Income protection policies are provided by life insurance companiesPersonal accident insurance is usually issued by general insurance companies
Are you paid out a predetermined value or is it based on what you earn?Benefit payment may be indemnity (based on income from previous 12 months) or agreed value (determined at time of application)Benefit generally always indemnity

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Compare income protection quotes from these direct brands

Product details Maximum cover Maximum Entry Age Cooling-off
Income Protection
Income Protection
Cover up to 85% of your income up to $10,000 per month if you can't work due to sickness or injury. Cover for over 1,000 jobs and full-time, part-time and self-employed. $10,000 60 30 Get quoteMore info
NobleOak Income Protection
NobleOak Income Protection
Receive up to 75% of your income each month to a maximum of $25,000 if you can't work due to serious illness or injury. $25,000 59 30 Get quoteMore info
Income Protection
Income Protection
Receive up to 75% of you income (up to $10,000 per month) of your income if you're unable to work due to serious illness or injury. $10,000 59 21 Get quoteMore info
Insuranceline Income Protection
Insuranceline Income Protection
Cover up to 85% of your monthly income (to a maximum of $10,000). $10,000 60 30 Get quoteMore info
Ezicover Income Protection
Ezicover Income Protection
Cover up to $12,000 income replacement when unable to work in any occupation due to sickness or injury. First month of cover is free. $12,000 60 30 Get quoteMore info

What type of benefits are provided?

  • Income protection insurance protects you from a loss of income that could arise from serious injuries following an accident, or if you contract a serious illness and cannot continue to work because of your illness.
  • Personal accident insurance, you will only be covered for a loss of income that arises from accidental injuries and not from illnesses. You may the option of choosing additional sickness cover with your personal accident insurance.

Will cover remain even if my circumstances change?

One of the most important features of any type of insurance is that it should be renewable. What this means is that the insurance provider should continue to provide you with the required level of cover even if your situation changes after the policy has been in effect for some time.

Income protection

As far as income protection insurance goes, these policies are typically guaranteed renewable, which means that you will continue to be covered even if your health situation changes or you change occupations. These policies are generally provided by life insurance companies and they cannot cancel your policy as long as you are paying the required premiums.

Personal accident insurance

This isn't always the case with personal accident insurance policies. As some of these policies sold by general insurance companies, they are tailored to for specific jobs and occupations. Therefore, if you were to change your occupation, or if there is any deterioration to your health, your insurance provider may have the option of cancelling your policy or refusing to renew it

Payment of benefits

Income protection

In the case of income protection insurance, you'll typically receive maximum cover up to 75% of your income. However, this type of payment is a recurring payment that can go on for years on end until such time that you reach 65 years of age.

Waiting periods

Note: With income protection insurance, there is usually a waiting period before the benefit payments kick in. This period could be a minimum of 14 days and could go up depending on the policy that you have chosen. In the case of personal accident insurance, you can opt for the benefit payments to begin from the first day of your accident without any waiting period.

Personal accident insurance

With personal accident insurance policies, you may have the option of cover for 100% of your income. Therefore, if you were to lose your income earning ability to an accident, you would stand to receive benefit payments equal to 100% of your income. However, such payments are generally restricted to a few years, five being the maximum with most insurance providers.


Income protection

Income protection insurance has specific exclusions, but these are generally not as many as with personal accident insurance.

Personal accident

If you have sickness and illness cover with your personal accident insurance policy, you may find that certain illnesses such as HIV, AIDS, and mental illnesses are typically excluded from cover. This means that if you lose your income earning ability due to such illnesses, you will not receive any benefit payments in spite of having personal accident insurance in place.

Speak to an adviser about income protection or personal accident insurance

Richard Laycock

Richard is the senior insurance writer at and is on a mission to make insurance easier to understand.

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