How Income Protection Insurance Works

Income protection insurance typically pays you up to 75% of your regular income if you can’t work due to illness or injury. Here’s how it usually works:

• Waiting period: This is how long you must wait after stopping work before payments begin—typically 30, 60 or 90 days.
• Benefit period: This is how long payments continue—2years, 5 years, or up to age 65depending on what is selected
• Monthly benefit: Calculated based on your recent income (e.g. last 12 months if you’re employed, longer if self-employed).

When It’s Worth Considering

You may want to consider income protection if :

• You’re self-employed or casual with no sick leave
• You have dependants or a mortgage and no other income support
• You don’t have enough savings to cover3–6months of living expenses
• You work in a physically demanding job where injury risk is higher

What It Doesn’t Cover

• Redundancy or job loss not due to illness/injury
• Pre-existing conditions (often excluded or heavily restricted)
• Policies held inside super may be cheaper but offer fewer features and slower payouts

Smart Policy Tips

• Choose alonger waiting period(e.g. 90 days) to reduce premiums if you have some savings
• Be honest in your application—claim disputes often come from undisclosed conditions
• Review every couple of years to make sure the benefit amount still reflects your income