What factors influence life insurance premiums?

Your life insurance premiums are determined by several elements. These include your age, health status, occupation, lifestyle choices such as smoking and alcohol consumption, the amount of cover you choose and the policy type you select. Generally, younger and healthier individuals with low risk occupations pay less.

Can I get income protection if I am self employed or a casual worker?

Yes, you can typically get income protection if you are self employed or a casual worker. However, insurers will assess your income history to determine your eligible benefit amount. For self-employed individuals, this usually involves providing financial statements or tax returns. Casual workers may need to show consistent earnings over a period, such as 12 months.

What is a waiting period in income protection and how does it work?

A waiting period in income protection is the time you must wait after becoming ill or injured before your benefit payments start. Common waiting periods include 14 days, 30 days, 60 days or 90 days. Choosing a longer waiting period usually results in lower premiums because you are self funding your income for a longer initial period.

Are income protection or life insurance premiums tax deductible in Australia?

In Australia, income protection premiums are generally tax deductible if the policy provides cover for lost income. Life insurance premiums are not tax deductible, whether you hold the policy inside or outside super. You also can't claim income protection premiums if the policy is held through your super fund and the premiums are paid out of your contributions.

What is the difference between stepped and level premiums?

Stepped premiums generally increase each year as you get older, reflecting your increased risk of illness or death with age. Level premiums aim to keep your payments relatively stable over the long term. While level premiums may start higher than stepped premiums, they tend to offer more predictable costs over your policy's life.

Can I adjust my cover amount after my policy starts?

Yes, most income protection and life insurance policies offer flexibility to adjust your cover amount after your policy starts. You can usually increase your cover if you experience significant life events such as getting married, having children or taking on a larger mortgage. You can also decrease your cover at any time, which may lower your premiums.

What commonly causes an income protection or life insurance claim to be rejected?

Claims for income protection or life insurance can be rejected for several common reasons. These often include non-disclosure of pre-existing medical conditions at the time of application, claims falling outside the policy's terms and conditions, engaging in risky activities not covered or failing to provide sufficient medical evidence to support your claim.