Important information about income protection

Often paid monthly, income protection premiums can vary from person to person, with the following factors all potentially influencing how much you could pay:

• Age and gender
• Occupation
• Smoker status
• Medical history and general health.

It’s worth comparing income protection quotes with our comparison service to quickly see how much you could be looking at paying based on your circumstances.

Income protection insurance is designed to give you peace of mind, as it can provide you with a portion of your income if you suddenly find yourself out of work due to illness or injury, for reasons outside your control.

It can be particularly beneficial for the following types of people:

• Self-employed people, who may not have any sick or annual leave and won’t be able to run their business if they become injured or sick
• People with mortgages or large debts they wouldn’t be able to service
• People with children or dependents they need to provide for

When comparing income protection policies, there’s a lot to factor in. Some important considerations may include:

• Maximum monthly benefits (how much you receive from your insurer each month)
• Maximum benefit periods (the length of time you’ll be able to claim your benefits)
• Exclusions (income protection claims may be rejected based on the exclusions listed in your policy)
• Extra benefits included in the policy (e.g. death benefits, partial disability benefits, spouse or child benefits)
• The maximum percentage of income cover (some might cover more of your income than others).

We can help you search for a policy by comparing income protection policies from some of Australia’s largest income protection brands.

Note: The information provided here is general in nature only and does not consider your personal objectives, financial situation or needs. Before you decide to purchase a product, it’s important to read the relevant Product Disclosure Statement (PDS).

According to the Australian Taxation Office (ATO), income protection premiums are tax-deductible where you hold the policy directly with an insurer.¹ However, if you take out your policy through your super fund, you won’t be able to claim your premiums as they’re taken from your super balance.

However, you can’t claim deductions for premiums for other types of life insurance, like term life insurance, trauma insurance or critical care cover.

This is only general information and doesn’t constitute tax advice. You can read more about income protection and tax here. You can also visit the ATO or consult a tax professional for more information on how tax works on income protection and life insurance.

Technically, income protection is one of the four main types of life insurance policies, which are as follows:

1. Term life insurance. Can provide a lump sum payment to your family or loved ones in the event of your passing or a terminal illness diagnosis.
2. Total and permanent disability (TPD) insurance. Provides disability benefits (often as a lump sum) if you become permanently disabled. Your eligibility may depend on your inability to return to your usual occupation or any other type of occupation.
3. Trauma cover. Can provide lump-sum benefits if you suffer a serious medical incident or are diagnosed with severe medical conditions (such as cancer).
4. Income protection. The insurance benefits from an income protection policy are meant to cover your everyday expenses during a temporary loss of work due to injury or illness.

Learn more about the types of life insurance.

Besides income protection, there are a few other ways you can protect yourself financially. These are:

• Mortgage protection. Can cover your mortgage repayments in the event of your passing, the critical illness diagnosis or if you’re totally and permanently disabled.
• Redundancy insurance. Can cover you in the event of involuntary redundancy, often as a part of an existing income protection policy.