Best income protection insurance in Australia

Find out who we ranked as the best income protection insurance in Australia

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Fact checked

The best policy for you depends on your individual needs and circumstances. For the 2019 Finder Awards, insurance experts analysed 15 income protection policies in Australian to identify the one that we think is best.

Finder Award 2019 Finalists: Best Income Protection Insurance Policies

PolicyMaximum monthly benefitAdditional featuresApply
85% of monthly income to a maximum of $10,000
  • Choice of 4 benefit periods
  • Choice of 4 waiting periods

75% of monthly income to a maximum of $25,000
  • Death and TPD benefit
  • Choice of 2 benefit periods
  • Choice of 2 waiting periods
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85% of monthly income to a maximum of $10,000
  • Choice of 4 benefit periods
  • Choice of 4 waiting periods
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85% of monthly income to a maximum of $10,000
  • Choice of 3 benefit periods
  • Choice of 2 waiting periods

85% of monthly income to a maximum of $10,000
  • Choice of 4 benefit periods
  • Choice of 4 waiting periods

Nicola Middlemiss Insurance Expert

Closer look: NobleOak Income Protection

We can't tell you which income protection policy is right for you, it depends on your own preferences and personal situation. However, we think it's worth pointing out that NobleOak has some pretty special features that deserve a closer look.

NobleOak offers a higher maximum payout than the other insurers featured on Finder, so if you're looking for a bigger benefit, this could be the policy for you. You also have the option to receive benefits up until age 65 with NobleOak, whereas other insurers may limit payouts to five years or less.

Unique benefits including:
  • Spouse benefit
  • Nursing care benefit
  • Rehab expenses benefit
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How to find the best income protection 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.
  • Cover type. There are two types of income protection policies – agreed value and indemnity value – although agreed value policies will be scrapped on 1 April.
  • Agreed value policies are more expensive, but the benefit amount is fixed from the outset of the policy.
  • Indemnity value policies are cheaper, but also riskier. When you buy a policy, you're not guaranteed a set benefit amount. Instead, you receive a percentage of what you earned in the 12 months leading up to your claim.
  • Premium type. The structure of your premiums can greatly impact the overall cost of your policy. Not all premium types will be suitable to you, so you should select one carefully based on your needs.

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.

Name Product Maximum Monthly Benefit Maximum % of Income Covered Maximum Benefit Period Waiting Period Options
NobleOak Income Protection
$25,000
75%
2 years or to the age of 65
30 or 90 days
AAMI Income Protection
$10,000
75%
5 years
14, 28, 60 or 90 days
Insuranceline Rate Saver Income Protection
$10,000
85%
5 years
14, 28, 60 or 90 days
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
30 or 90 days
You could win a $2000 Gift card when you get an Income Protection Insurance quote by 30 August. Winner drawn fortnightly. Plus, Medibank health members save 10% every year. T&Cs apply.
nib Income Protection
$10,000
85%
2 years
14 or 28 days
Get one month free when paying annually. T&Cs apply.
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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.

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.

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 if you have a fluctuating income

If you have a fluctuating salary, you might want to consider an agreed value income protection policy, which guarantees the payout you receive regardless of any changes to your income.

The other type of income protection, indemnity value, calculates your payment based on what you earned in the 12 months prior to a claim. So if you had a slow business year, took time off or didn't hit your bonuses, your benefit could end up significantly less than you expected.

You can only buy agreed value income protection policies through a broker, and you won't be able to buy them at all after 1 April 2020. If you have a fluctuating income, you might want to make a decision sooner, rather than later.

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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