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Income Protection Insurance in Australia

Income protection insurance in Australia provides a means of protecting your family and your lifestyle should you be unable to work for an extended period of time due to accident or illness.

No matter what your situation, if you depend on your income for day to day living expenses and to maintain your lifestyle you cannot afford to be without some form of income protection insurance. Australian income protection insurance can ensure that should your income earning activities be curtailed for a significant period of time, your family will be able to meet their financial obligations without having to resort to cost saving measures such as selling the family home or sacrificing your children’s’ education.

The Australian income protection insurance market has a dazzling array of products and trying to choose the right policy to fit your specific circumstances can be overwhelming. CCA Fp can offer specialist advice and guidance to customers who may be struggling to navigate the murky waters of income protection insurance. Obtaining income protection insurance can be a highly complex and confusing process with a multitude of factors to be taken into consideration. Seeking professional help can save you money on your premiums and ensure you find a good value policy.

There are a number of different ways to structure your income protection insurance policy, including:

A split benefit policy provides different policy features at different times depending on when you are likely to need them most. This can allow you to save money on your premiums by only having the premium features during the first two years of your benefits and lowering the rate of benefits after that. The premium benefits may not be necessary after the first two years and paying extra for them could be a waste of money.

Another way to structure your policy is to buy your income protection cover in superannuation with split benefits. Although this sounds complicated it is actually very simple. Some super funds will allow you to use your super to fund your income protection insurance premiums, and then claim them as a tax deduction. As income protection insurance premiums in Australia are tax deductible, you may be able to claim up to around 45% of your premiums back through this system. The only downside is that you cannot purchase “plus” or premium features including trauma benefits through your super fund. You can, however, purchase a plus policy yourself for the first two years and then switch to another policy which will cover you up to age 65 through a super fund.

With the right professional advice, an Australian income protection policy can be tailored to suit your specific situation. If you need income protection coverage to begin immediately but can’t afford the premiums for a 14 day wait we can advise on options to help you purchase the right policy to ensure you have accident cover from day one. Tailoring a standard income protection policy with a comprehensive extra benefits policy means that you could potentially be paid your income protection benefits straight away.

There are a number of factors Australian insurers take into consideration when assessing your risk for income protection insurance. These factors include:

  • Your occupation. Some occupations are classified as ‘high risk’ meaning there is an increased likelihood that you will suffer a serious accident or fatality whilst carrying out your employment duties. High risk occupations include commercial aviation, mining and security work. If you work in a high risk occupation you may find your income protection insurance options are limited or you may face higher premiums as a result.
  • Your medical history and general state of health. If you are a smoker, or have a history of serious medical problems, this may affect the rate of your premiums and the length of your term. Those with poor health or higher risk factors for certain diseases are considered more likely to suffer an illness which may prevent them working for a substantial period of time and insurance companies will factor these additional risks into their assessment.
  • Any other risky activities. If your hobbies include skydiving or motorcycle riding, this may have an effect on your income protection insurance premiums. Anything that could endanger you and put you at additional risk of injury is considered an extra risk.

If you are considered high risk and are having difficulty finding an affordable income protection policy, having a reputable broker to advise you and negotiate with insurance companies may mean the difference between being left vulnerable and obtaining the coverage you required to meet your needs.

With an increasingly broad range of products available on the Australian income protection insurance market, it makes sense to get the best advice when finding a policy. CCA Fp has over 20 years of experience in the insurance industry and our size and reputation make us the perfect choice for all your income protection insurance needs.