Best Income Protection Insurance in Australia 2020
We scored 14 direct policies on price, features and additional options. Here's who we ranked as the best income protection for 2020.
Updated . What changed?
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Best Income Protection Insurance in Australia 2020
After reviewing 14 direct insurance brands for 12 personas across Australia, these were the finalists in the 2020 Finder Awards.
|Policy||Maximum coverage offered||Stand out features and benefits||Apply|
Finder Awards methodology
Our 2020 Finder Awards for Best Income Protection Insurance looked at 14 online Australian brands across 12 different personas for both males and females aged between 30 and 50. We only compared direct insurance brands in Australia and our comparison was not whole of market.
Multiple quotes were obtained from each provider. The following product features were scored and weighted as follows:
- Max Monthly Benefit Score: 25%
- Max % of Income Covered Score: 15%
- Max Entry Age: 10%
- Benefit Period Options: 5%
- Max Benefit Period: 10%
- Waiting Period Options: 5%
- Minimum Waiting Period: 10%
- Interim Cover Offered: 5%
- Redundancy Cover Offered: 5%
- Death: 5%
- Total/Permanent Disability Cover 5%
Overall score was calculated as follows:
- Smoker Quote Score 10%
- Non Smoker Quote Score 20%
- Features Score 70%
Compare more income protection insurance policies
You can use some of the tips provided in our guide to help you find the right cover for you. Use the table to compare key benefits of some other different income protection policies at a glance. Continue reading this guide to see what else makes up the best income protection cover.
How to find the best income protection insurance policy for you
We get it, reading about insurance is boring, but it's an important financial decision so it's worth getting it right. Here are some key features to keep an eye on while trying to find the best income protection insurance for you:
- Benefit period. This is the length of time benefits will be paid out for. Usually, you'll be able to customise this to some degree, but insurance companies will have a maximum limit – typically two years or five years, depending on the insurer.
- Waiting period. Once you're unable to work, you must wait a certain period of time before you can claim. This is the waiting period. You can usually customise waiting periods, but they will typically be somewhere between two weeks and two years.
- Maximum cover. Insurance companies will also put caps on the amount of benefit you can claim. Typically, you'll only be able to claim a percentage of your current salary (usually 75% or 85%). However, insurers also set a maximum monthly benefit, usually around the $10,000 mark.
- Premium type. The structure of your premiums can have a big impact on the overall cost of your policy. There are generally two types of premium structure you can choose from:
- Stepped policies begin cheaper but increase every year in accordance with your age. They can become quite expensive as you grow older.
- Level policies are more expensive to begin with. However, a level premium will not increase with your age so as you become older they can end up being the cheaper option.
If you're still unsure how to find the right policy, or you have a tonne of income protection questions, you can find plenty of guides on Finder. Take a look out our income protection beginner's guide to get you started.
Never buy a policy solely based on price ⚠️
It can be tempting to buy an income protection policy because it's cheap, but if you don't check the benefits and exclusions, you could end up with cover that doesn't fit your needs and doesn't pay out when it comes to crunch time.
How do premium types affect your income protection?
There are three premium structures that affect how much you'll pay for cover: stepped, level and hybrid premiums. It's important to choose the one that fits with your lifestyle.
- Stepped premiums. These start out cheaper but increase steadily over time.
- Level premiums. These start higher than stepped premiums but remain consistent throughout the lifetime of the policy.
- Hybrid premiums. These are a combination of both stepped and level premiums. They start mid-range and level off after a period of time.
Find the best income protection for seniors
Unfortunately, you might struggle to find income protection insurance if you're over the age of 60. The table below shows the maximum entry age of different insurers as well as the age at which your policy would expire.
|Insurer||Maximum entry age||Policy expiry|
Find the best policy for mental health conditions
According to healthdirect.gov.au, about one in five Australians suffer from a mental illness every year, yet some income protection policies won't pay out if you're unable to work due to mental illness. Thankfully, there are income protection policies which will, including NobleOak and TAL.
If you want income protection insurance that will cover you if mental illness keeps you from working, it's worth considering one of these brands.
Find the best income protection for your profession
The price of your income protection policy will be influenced by the job you do – the riskier your profession, the higher your premium. However, a few jobs are considered so dangerous that some brands won't cover them at all.
This means if you were injured while at work, you wouldn't be able to claim on your income protection insurance. Instead, you'd only be able to claim for injuries that happened outside of work.
|Brand||Excluded professions / working conditions|
Find the best income protection policy for your lifestyle
Some people live riskier lifestyles than others. Unfortunately, if you're one of those people, you'll probably end up paying more for your income protection insurance. Some brands may even refuse to insure you for particularly dangerous pastimes or hobbies.
The table below shows some of the dangerous pastimes that insurers may not cover you for. The list isn't exhaustive, so always check your PDS or talk to your insurer directly if you have any questions about coverage for more risky activities.
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