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.

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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.

PolicyMaximum coverage offeredStand out features and benefitsApply
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  • 75% of monthly income up to $25,000
  • Highest amount of cover available on the market
  • Longest benefit period available, up to the age of 65
  • Death and TPD cover included
  • Interim accident cover offered
More info
Insuranceline logo
  • 85% of monthly income up to $10,000
  • Four benefit period options available, up to five years
  • Optional redundancy cover
Get quote
Virgin logo
  • 85% of monthly income up to $10,000
  • Affordable cover
  • Wide range of waiting periods offered, including 14 days
  • Optional redundancy cover is available
More info
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  • 75% of monthly income up to $12,000
  • Wide range of waiting period options including 14 days
  • Affordable cover overall
  • Affordable cover for smokers
More info
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  • 75% of monthly income up to $12,000
  • Wide range of waiting and benefit periods
  • Unique benefits such as disability cover, premium waiver, rehabilitation expense benefit and Scheduled Injury benefits
More info

Must read: The best option is the one that meets your needs and circumstances, so the best for one person might not be the best for you.

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.

Data indicated here is updated regularly
Name Product Maximum Monthly Benefit Maximum % of Income Covered Maximum Benefit Period Waiting Period Options Policy Type Apply
Insuranceline Rate Saver Income Protection
$10,000
85%
5 years
Apply directly online
Get a $100 bonus gift after 2 months. Plus get 12 months cover for the price of 11 if you pay annually. T&Cs apply.
Medibank Standard Income Protection
$7,500
75%
5 years
Apply directly online
Medibank health members save 10% every year. T&Cs apply.
AAMI Income Protection
$10,000
75%
5 years
Apply directly online
TAL Accelerated Protection Income Protection
$30,000
75%
To Age 70
Underwritten via a broker
AIA Income Protection
$30,000
75%
To Age 70
Underwritten via a broker
MLC Income Protection
$30,000
75%
To Age 70
Underwritten via a broker
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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.

InsurerMaximum entry agePolicy expiry
AAMI6065
Virgin Money6075
Medibank5965
ANZ5965
TAL5964
NobleOak5965
nib6075
InsuranceLine6075

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.

BrandExcluded professions / working conditions
Virgin Money
  • At heights above 20 metres
  • Underground, underwater or offshore
  • At speeds above 130 kph (other than as a passenger on commercial transportation)
  • Performing stunts
AAMI
  • At heights above 15 metres
  • Underground in the mining industry
NobleOak
  • None listed in PDS
TAL
  • None listed in PDS
Medibank
  • None listed in PDS
ANZ
  • Professional sports
  • "Special risk professions" – not detailed in PDS
nib
  • At heights above 20 metres
  • Underground, underwater or offshore
  • At speeds above 130 kph (other than as a passenger on commercial transportation)
  • Performing stunts
InsuranceLine
  • At heights above 20 metres
  • Underground, underwater or offshore
  • At speeds above 130 kph (other than as a passenger on commercial transportation)
  • Performing stunts

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.

BrandDangerous pastimes
Virgin Money
  • Training for professional sporting activities or stunts
  • Training for sporting activities involving animals or weapons
  • Boxing, competitive fighting, martial arts or combative sports
  • Solo hang gliding, skydiving or parachuting
AAMI
  • Aviation or aerial pursuit activities other than as a passenger on a commercial airline
  • Riding on, or driving in, a self-propelled vehicle in any race, speed or reliability trial
  • Mountaineering, abseiling, rock climbing or canyoning
  • Diving to a depth of 45 metres or more
NobleOak
  • None listed in PDS
TAL
  • Training for professional sporting activities or stunts
  • Training for sporting activities involving animals or weapons
  • Boxing, competitive fighting, martial arts or combative sports
  • Solo hang gliding, skydiving or parachuting
Medibank
  • None listed in PDS
ANZ
  • Motor sport speed contests
nib
  • Training for professional sporting activities or stunts
  • Training for sporting activities involving animals or weapons
  • Boxing, competitive fighting, martial arts or combative sports
  • Solo hang gliding, skydiving or parachuting
InsuranceLine
  • Training for professional sporting activities or stunts
  • Training for sporting activities involving animals or weapons
  • Boxing, competitive fighting, martial arts or combative sports
  • Solo hang gliding, skydiving or parachuting

Picture: GettyImages

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4 Responses

  1. Default Gravatar
    jbOctober 14, 2019

    I am given $19,000 income protection for 13 months. They took 13,000. Is that possible? My salary was over 5,000 monthly.

    • Avatarfinder Customer Care
      JeniOctober 15, 2019Staff

      Hi JB,

      Thank you for getting in touch with Finder.

      Please note that your monthly income protection benefit varies per insurer. The monthly maximum sum insured for someone is between 50% to 85% of their salary. I suggest that you verify with your insurer first on how much is your approved income protection and how much you should get.

      I hope this helps.

      Thank you and have a wonderful day!

      Cheers,
      Jeni

  2. Default Gravatar
    jeetNovember 4, 2017

    does income protection covered mental illness

    • Default Gravatar
      MariaNovember 5, 2017

      Hi Jeet,

      Thank you for your inquiry.

      It’s possible for income protection to pay a portion of your usual income if you’re temporarily unable to work because of health issues. Similarly to TPD cover, mental illness is a significant contributor to these types of claims.

      You may want to discuss the history of the mental illness with your insurer to clarify the extent of the cover.

      You may find more useful information on this page on Life Insurance, Income Protection and Mental Illness.

      Best,
      Maria

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