Australia Income protection insurance Cover

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Published: 22nd July 2011
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Income Protection Insurance (Income Cover):
Finding the right Insurance policy that fits your personal needs and circumstances is not as easy as just picking the first option you come across.
Not only do you need to consider the different policy types but also the different benefit periods, waiting periods, disability definitions and taxation issues.

What is Income cover?
Income Protection Insurance pays a monthly benefit while you are unable to work as a result of injury or illness.

Many income protection policies will cover up to 75% of your gross salary if you are totally or partially disabled.
By replacing your regular income, Income cover Insurance payments can help you and your family maintain a level of financial normality.
Income Protection Insurance gives you the financial freedom to focus on your recovery or treatment, without worrying about your regular expenses.

Things that Income Protection Covers:
- Accidents
- Musculoskeletal Disease
- Heart Disease
- Mental Illness
- Cancer
- Stroke

If you're thinking to protect you income there are two policy options available:

With an Indemnity income secure insurance policy your benefit is generally calculated as a percentage of your income at the time of claim.
An indemnity policy will generally pay the lesser of the insured monthly benefit which is 75% of your income or the best 12 consecutive months in the last three to five years depending on the insurer.

Why Indemnity?
If you have a pretty stable income that doesn't fluctuate then choosing an indemnity policy will be cheaper compared to an Agreed Value policy.
Indemnity policies are competitively priced compared to Agreed Value policies because your monthly benefit is calculated and certified at claim time instead of upfront when you start the policy.

Quick Tip!
If you're an employee with a constant income than indemnity Insurance policy can save you a bit of money compared to an agreed value Income Protection Insurance policy.

Agreed Value
An Agreed Value income protection insurance policy has a fixed monthly benefit which is calculated and approved when your policy is setup. Agreed Value policies will pay you the fixed insured monthly benefit, regardless of whether your income is lower at the time of claim.
Why Agreed Value?
An Agreed Value policy has an insured monthly benefit that has been certified by the insurer at the time your policy is setup.
This will give you certainty and peace of mind when and if you make a claim.
Agreed Value premiums tend to be a bit higher than indemnity policy premiums but it's worth paying that little bit extra for peace of mind at claim time.

Quick Tip!
If you have income that goes up and down like a yoyo (self employed or contractor), an Agreed Value policy will provide you with a fixed monthly benefit if and when you need to make a claim.

Accidents/Sickness Only
There is a third option for Income coverage Insurance which is a Accident & Sickness Only Income Protection Insurance policy. This option offers policyholders the least amount of income coverage when compared to agreed value or indemnity policy options.

Income coverage Insurance Waiting Periods
The Waiting Period is the time between becoming unable to work and receiving your first income protection insurance payment. You can generally choose a waiting period between fourteen days and two years. A shorter waiting period generally means a higher premium.
Waiting Period(s):
- 14 Days
- 21 Days
- 30 Days
- 60 Days
- 90 Days
- 180 Days
- 1 Year
- 2 Years
- To Age 70

Get details on different insurance policies including Life Insurance, Trauma insurance, etc from

Telephone: 1300-275-949

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