Winner: Virgin Tailored Income Protection
The Virgin Income Protection Tailored policy came out on top in the 2019 review of online income brands.
We thought the policy had some standout features such as 85% cover, up to 5 year benefit period, optional redundancy cover and a variety of waiting period options.
The features came out competitively priced when compared to the rest of the market.
- $10,000
Maximum monthly benefit - 85%
Max. % of income covered - 14, 28, 60, or 90 days waiting period
Finder Awards methodology
Our 2019 Finder Awards for Best Income Protection Insurance looked at 15 online Australian brands across 12 different personas for both males and females aged between 30 and 50.
Multiple quotes were obtained from each provider. The following product features were scored and weighted as follows:
- Fully underwritten: 7%
- Max sum insured: 10.5%
- Guaranteed renewability: 7%
- Expiry age: 10.5%
- Counselling benefit: 3.5%
- Premium cover suspension: 3.5%
- Interim accident cover: 7%
- Options: 7%
- Funeral advancement benefit: 3.5%
- Max entry age: 10.5%
- Cost for a nonsmoker: 20%
- Cost for a smoker: 10%
Best Income Protection Insurance Runners Up
| Policy | Maximum monthly benefit | Additional features | Apply |
|---|---|---|---|
 | 85% of monthly income to a maximum of $10,000 |
| More info |
 | 75% of monthly income to a maximum of $25,000 |
| Go to site |
 | 85% of monthly income to a maximum of $10,000 |
| |
 | 85% of monthly income to a maximum of $10,000 |
| |
 | 85% of monthly income to a maximum of $10,000 |
| More info |
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
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.
| Insurer | Maximum entry age | Policy expiry |
|---|---|---|
| AAMI | 60 | 65 |
| Virgin Money | 60 | 75 |
| Medibank | 59 | 65 |
| ANZ | 59 | 65 |
| TAL | 59 | 64 |
| NobleOak | 59 | 65 |
| nib | 60 | 75 |
| InsuranceLine | 60 | 75 |
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.
| Brand | Excluded professions / working conditions |
|---|---|
| Virgin Money | |
| AAMI |
|
| NobleOak |
|
| TAL |
|
| Medibank |
|
| ANZ |
|
| nib | |
| InsuranceLine |
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.
| Brand | Dangerous pastimes |
|---|---|
| Virgin Money | |
| AAMI | |
| NobleOak |
|
| TAL | |
| Medibank |
|
| ANZ |
|
| nib | |
| InsuranceLine |
Continue your search for the best income protection insurance
Use the table to compare key benefits of eight different income protection policies at a glance. View details to see a more comprehensive breakdown of benefits and compare up to four policies side by side.
Picture: GettyImages
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Ask an Expert
I am given $19,000 income protection for 13 months. They took 13,000. Is that possible? My salary was over 5,000 monthly.
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
does income protection covered mental illness
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