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What impact does my occupation have on income protection?

The amount of income protection cover you need – and how much your cover cost – is directly influenced by how risky an insurer deems your job. Many other factors affect the cost of your cover.

Your occupation can affect your income protection insurance in a number of ways. Generally, the higher your job's level of risk, the steeper you can expect your premiums to be. Let's take a look.

How does income protection differ between key industries?

People in high-risk or particularly physical jobs usually pay more for income protection. The type of policy you'd need can also vary depending on your occupation. Here are 4 types of industry and the key considerations to keep in mind:

Tradesperson icon

Tradies

With many tradespeople and construction workers being required to have cover in place to work on site, many insurers have created policies that are designed specifically for this group. These policies often include:

  • A specific injuries benefit. This feature covers common injuries such as a fracture to your leg, arm, skull, thigh or pelvis. Other injuries you can expect to be covered for include paralysis, total and permanent loss of sight in one eye, and the loss of the use of a foot or hand.
  • Accident benefit option. This allows tradespeople or construction workers to claim a benefit before the end of the waiting period of their policy.
  • Self employed and contract benefits. If you are a self employed tradesperson or you work on a contract basis, your income may fluctuate significantly from month to month and year to year. However, your insurer may be able to offer you a benefit which reflects your income, and is still enough to cover your expenses while you recover from illness or injury.

Oil, gas and mining industry workers

The additional risk of working in the oil, gas or mining industry can make it more difficult for these workers to get access to affordable cover. Some factors that will be considered by insurance companies include:

  • If you work in an underground mine, or an open cut mine.
  • If you use, or are in contact with explosives.
  • If you work in hard or soft rock mining.
  • If you work on a fly in, fly out basis.

You will also need to provide details about your exact job title and duties, as well as the hours you work in a typical rotation.

Gas icon

Heavy industry

The additional risk of working in the oil, gas or mining industry can make it more difficult for these workers to get access to affordable cover. Some factors that will be considered by insurance companies include:

  • If you work in an underground mine, or an open cut mine.
  • If you use, or are in contact with explosives.
  • If you work in hard or soft rock mining.
  • If you work on a fly in, fly out basis.

You will also need to provide details about your exact job title and duties, as well as the hours you work in a typical rotation.

Nurse icon

Healthcare

If you work as a health professional in the medical industry, you are exposed to a variety of risks in your day-to-day job. At the same time, you know just how easy it is to fall ill or be injured, and the effect that these situations have on a person's lifestyle. Therefore, you will want to look for income protection insurance which covers you for:

  • Needle stick injuries. This will typically include cover for occupationally acquired HIV, Hepatitis B and Hepatitis C.
  • A non-offset clause. This entitles you to a full benefit payment even if you are already receiving compensation from WorkCover.

Farmer icon

Farming

Farming can be a risky industry in which to work because of the sometimes significant seasonal and year to year fluctuations in earnings, and long term threats such as floods and droughts. However, you don't have to struggle through those financial setbacks alone, because there are income protection policies which are specifically designed for the farming industry.

For example, a farmer's life insurance policy benefit can be based on 30% of your gross or net farm turn over, or calculated by your net income. if you are a farmer looking for income protection insurance, you may also want to consider the benefits of stepped or level premiums for your situation, and consider whether you would be best suited to an indemnity or agreed value policy.

Income protection calculator: How much cover you could get

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We estimate that you could get...(click Calculate to see results)

Finder survey: Did Australians of different ages know that income protection is tax deductible?

Response65-74 yrs55-64 yrs45-54 yrs35-44 yrs25-34 yrs18-24 yrs
Yes2.29%5.81%11.4%10.66%7.34%5.15%
No0.57%1.16%7.25%6.6%6.88%2.06%
Source: Finder survey by Pure Profile of 1110 Australians, December 2023

How do insurers determine my occupation's level of risk?

Insurers classify your occupation as being either standard risk or special risk. A standard risk occupation does not expose you to specific dangers or hazards and does not require you to engage in physically, mentally or emotionally risky duties to complete your tasks. On the other hand, special risk occupations can be those which:

  • Require you to complete hazardous tasks in your day to day role.
  • Continually expose you to risks that can affect morale and lead to excessive drinking or other unhealthy lifestyle habits.
  • Exposes you to poisonous chemicals.
  • Requires you to work in unhealthy or unsanitary environments.
  • Places you at risk of occupational diseases.
  • Could cause excessive mental and nervous strain.

What percentage of my salary can I get covered for?

In general, insurance companies limit income protection benefits to 70% of your income. The amount you earn, as well your occupation, can determine the type of income protection you take out. For example, if you are a high-income earner you may find it difficult to insure yourself for the level of income you are used to earning.

What are the must-have policy features for any occupation?

  • Specified injury and illness benefits. This feature will pay a benefit if you suffer from one of the specific injuries listed in the policy, even if you continue with your work. These may include broken bones, cancer, a stroke or heart attack.
  • Elective surgery. Coverage for injuries which are caused by elective or cosmetic surgery.
  • Bed confinement. Waives the waiting period and pays benefits immediately if you are confined to a hospital bed.
  • Accommodation and travel assistance. Covers the costs of accommodation and travel for family members who need to visit you if you are sick or injured away from home. This may include relocation assistance to pay for air fares if you are disabled while overseas.
  • Family care. Provides a family income assistance benefit if you require another family member to take care of you.
  • Home care. Pays for the assistance of a full time carer if required.
  • No claim bonus. Increases your benefit amount at no extra cost if you have held the policy for a certain amount of time without making a claim.
  • Rehabilitation incentive. Pays a benefit towards the costs of rehabilitation care.
  • Guaranteed future insurability. Increases your benefit amount if your salary package increases.
  • Increasing claims benefit. Ensures that your benefit amount increases each year in line with the CPI, once a claim has commenced. This is especially important in income protection policies with a long benefit period, such as until retirement, so that your benefit amounts are able to continue to meet your family’s financial needs as inflation increases.
  • Day one accident cover. Waives the waiting period if your disability is the result of an accident.

What else should I know about comparing income protection?

  • Which medical conditions are covered. Each insurer has their own inclusions and exclusions. In general there is no set list of eligible medical conditions that result in a pay out.
  • Cover at work and outside of work.You may think you’re protected by WorkCover and that you will be compensated in the event of illness or injury. However, WorkCover only pays out for incidents that occur due to your occupation. Income protection ensures you are insured for injury and illness both on site and at home.
  • Relevant coverage. The amount of cover you choose should reflect your future needs. This is why some income protection policies increase your cover amount each year to keep up with the inflation rates.
  • Pays a portion of your income and extras. Most income protection insurance policies pay around 75% of your regular income while you are off work with an illness or injury. This payment also includes superannuation contributions and any other benefits you receive.
  • Your choice of waiting period. You may be able to choose the period between making a claim and receiving your first benefit payment. The longer the waiting period, the lower your premiums. Often you can choose a period between two weeks to two years. Just remember that benefit payments are often paid monthly in arrears, so if you have a waiting period of 60 days, you need to wait 60 days, plus another 30 days before you receive your first payment.
  • Your choice of benefit period. Again, the longer the benefit, the more expensive your premiums. You don’t want your income protection to run out before you are ready to return to work. You can either choose a set period of two or five years for example, or until a certain age, such as 65, when your retirement funds will be accessible.
  • Choose an agreed or indemnity benefit. You can choose an agreed benefit amount when you take out income protection, so that the full benefit amount will be paid regardless of your actual income at the time you lodge a claim. An indemnity benefit is based on your income at the time of the claim and requires financial checks before your benefit is paid.
  • Extra policy features. Sometimes the costs of premiums can vary significantly between policies and income protection providers for coverage which is seemingly the same. However, comprehensive policies will usually offer a lot more added benefits that may be of use to you.

Compare income protection policies from Australian providers

1 - 6 of 6
Name Product Maximum Monthly Benefit Maximum % of Income Covered Maximum Benefit Period Minimum Entry Age Sum Insured
TAL Accelerated Protection Income Protection
$30,000
Up to 70%
Up to
Age 65
18
$1,305 million
Get up to 70% of your income covered with flexible short and long term benefit periods.
AAMI Income Protection
$10,000
Up to 75%
Up to
5 years
18
$222 million
Take out a new AAMI Income Protection policy and get $100 eGift card after your first 4 months of cover. T&Cs apply. Ends June 30, 2024.
ahm Income Protection
$10,000
Up to 70%
Up to
5 years
18
Data not available
Get 10% off your first year of ahm Income Protection when you apply by 1 July 2024. T&Cs apply.
NobleOak Income Protection
$30,000
Up to 70%
Up to
Age 65
18
$65 million
With NobleOak, you can lock in a policy with a benefit period covering you up to the age of 65. Cover limits may go as high as $30,000.
Medibank Income Protection
$12,500
Up to 70%
Up to
5 years
18
Data not available
Save 10% on your first year of Medibank Life Insurance when you apply by 1 July 2024. T&Cs apply.
Insuranceline Income Protection
$10,000
Up to 75%
Up to
5 years
18
$222 million
Protect your family with an Insuranceline policy and you can go into the draw for a chance to win a $1,000 gift card. New Customers only, T&Cs apply. Competition entries close on 31 July 2024.
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More on how to find income protection for your occupation

Choosing the factors that will complement your specific needs in an income protection insurance policy is just the first step. A perfect plan always involves formulating the strategy first, testing the strategy, going back to the game board, and executing the plan. Therefore, the next phase in getting the cover you need requires more legwork than brain power.

  • Ask around. Ask people you know who already have income protection what to look for and what components should be included. They can give you insights from first-hand experience around certain policies, features and even insurance providers. If you still have unanswered questions you may wish to engage the services of an experienced and reputable insurance adviser for professional assistance.
  • Shop around. This is a general rule whenever you want to buy something – from your groceries to your home furniture. Don’t be afraid to ask insurance agencies about the policy you are interested in. Probe and ask for clarifications when necessary. Don’t be shy to ask for discounts or inquire about their most competitive price. After all, it is your future you are talking about.
  • Collect quotes. Get various quotes from different insurance providers. Insurance companies have websites which you can get instant quotes from. All you need to do is fill out the form and submit. You can even speak to an insurance agent right away to get a more detailed explanation about the policy you are eyeing. Moreover, the online quote you get is as accurate as the quote you get from an insurance agent.
  • Review. After all the brain and leg work, review all the information you have got and arrange a meeting with your insurance adviser to discuss other possible options.

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