Income Protection to keep you going
Income Protection cover provides a monthly income to replace lost earnings due to injury and/or illness. We believe everyone should have Income Protection (IP) if they are working.
Compare Income Protection insurance companies with ease
At Find Insurance, we have made it easy for you to compare and acquire income protection insurance with some of the largest and most established companies in Australia.
Income protection insurance provides you with a steady monthly income. The amount payable is based on either 75% of your current earnings at time of application or up to 75% of the income you were earning prior to becoming ill or injured (refer to Agreed vs Stepped in the Learn section).
IP is cash flow in your hands when you need it most. It is the only insurance cover that provides a monthly regular income stream to help cover your daily living expenses, mortgage repayments and other discretionary expenses you cannot do with out.
You’ll receive a monthly income benefit until such a time you have recovered from your illness or injury until you have either gone back to work or for the nominated amount of time you chose to receive the payments or until the policy expires, whichever is the earliest.
A lot of insurers will now cover you up to age 70. That means if you get injured at age 52 and can never work again, the insurer will pay you IP until age 70 if that is what you have chosen.
Insurance companies offer different levels of Income protection that vary in cost. You can either choose the basic IP or an IP that comes with all the bells and whistles.
Who needs Income Protection insurance?
If you’re the main breadwinner in the family you should have Income Protection. We believe anyone working should consider having Income Protection and treat it as though it is part of their renumeration package.
Everyone wants to work hard and build up wealth. So it makes sense to ensure that you, your family and ultimately your wealth is protected.
Income Protection is the only insurance whereby the premiums are tax deductible. In essence, if you are working then the ATO is paying for some of your premiums.
Agreed vs Indemnity
Income Protection insurance cover allows you to choose Agreed or Indemnity type policies. If you can demonstrate earnings at time of application then go Agreed is a preferable option.
When choosing an Income Protection (IP) policy you will have to choices as to the type of policy you would like to have: Agreed or Indemnity.
Currently, industry funds only offer Indemnity type IP policies. As such, care needs to be taken to understand the difference between Agreed and Indemnity type policies.
With Agreed policies, you have to demonstrate proof of earnings at time of claim. If you make a claim and are on agreed, then the insurer will pay you that amount for which they have agreed when you first submitted your application.
With Indemnity policies, you have to proof what you earn at time of application and at time of claim. If your income is less at time of claim compared to when you first submitted your application then the insurer will pay you less.
Also, if you have an indemnity IP policy you should be mindful of the fine print, especially IP policies provided by industry funds. The fine print for most indemnity policies allows the insurer to not pay at claim time if you are not working at the time you become injured or ill. For instance, if you are in between jobs and decide to take a holiday. Whilst on holiday you become injured, the insurer might decline the claim and not pay you the Income Protection you were hoping for.
Whilst indemnity type IP policies cost less (we are talking about 2-4% savings) then Agreed IP policies (when comparing IP from the same company), we prefer everyone to have Agreed policies if possible.
As such, Find Insurance will only supply Agreed quotes where possible. The only time we will supply Indemnity type quotes is if you are self-employed and have recently started working for yourself. Most insurers will not provided Agreed cover to newly self-employed people.
How much IP insurance coverage do you need?
You can only apply for a maximum of 75% of your earnings. As such, financial planners will generally provide a quote for 75% of the income you are currently earn.
If your Income is going to grow over time then choose Indexation/CPI to allow for the benefit you have insured for to grow each year with the aim to keep up with your wage growth.
If you would like to work out how much IP Insurance cover you might require then click on the 'Calculate Income Protection' button. Alternatively, if you would like to request a quote then select the 'Start Here' Button at the top of the page and proceed to 'Request a Quote'.