Personal InsuranceIncome Protection Insurance
What if an illness or accident prevented you from working tomorrow? Income protection replaces part of your income while you focus on recovery, 24 hours a day, worldwide.
01Why income protection matters
Your ability to earn an income is arguably your most valuable financial asset yet it's the one most people insure last. Most personal insurance claims are for illness rather than injury, and illness typically isn't covered by workers' compensation or other government support. People insure their car and their home; few insure the income that actually pays for both.
A short absence from work might be covered by sick leave or savings. But consider the impact of an incapacity lasting three months, six months, or longer. It's not unusual for a household to spend a decade or more building up savings and assets, only to see much of it disappear within a couple of years because no income was coming in.
02How it works
Income protection pays a monthly benefit generally up to around 70% of your income for policies issued today if illness or injury stops you from working. A few key structural choices affect both your cover and your premium:
Waiting period — how long you wait from the date you stop working before payments start. Common options are 14, 30, 60 or 90 days, or 6, 12 or 24 months, usually chosen around your available sick leave.
Benefit period — the maximum length of time a claim can be paid: typically 2 years, 5 years, or through to age 65 or 70.
Claims escalation — an optional feature that indexes your payments each year while you're claiming, most relevant for longer benefit periods.
03Agreed value vs indemnity cover
Older "agreed value" policies fix your monthly benefit at the level agreed when cover started, regardless of later income changes these are largely closed to new applicants today. Most new policies are "indemnity" style, where your benefit at claim time is based on your income at the time of claim (capped at your sum insured). Indemnity policies are typically cheaper, but you'll need to provide financial evidence if and when you claim, rather than upfront.
Worth knowingTax Deductible
Income protection premiums are generally tax deductible, which can make comprehensive cover more affordable than it first appears. We'll walk you through how this applies to your situation.
Why Covered LifeAdvice that actually fits your life
We are not a call centre. Every policy is structured around your circumstances, and we stay with you through to claim.
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Policy comparisons
We compare structures and insurers so your cover isn't overly restrictive when it matters most.
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Structured to fit
Waiting periods and benefit periods chosen around your real sick leave and savings position.
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Claims support
We help manage the claim, not just the sale, so payments arrive as smoothly as possible.
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Ongoing reviews
Your income changes over time we check in to make sure your cover keeps up.
1 in 4
Australian mortgage holders are at risk of mortgage stress. Income shock, not interest rates, is often the trigger.
Source: Roy Morgan, April 2026.
Why it mattersCover pays out, and pays out often
Life insurance in Australia is closely regulated and the claims genuinely get paid. These are the most recent admitted claim rates published by APRA and ASIC.
are admitted and paid
are admitted and paid
and paid
Also worth consideringCover that works alongside this
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01
Life Insurance
A lump sum for your family to clear debts and maintain their lifestyle if you pass away.
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02
TPD Insurance
A lump sum if illness or injury leaves you permanently unable to work.
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03
Critical Illness
A lump sum on diagnosis of a serious condition like cancer, heart attack or stroke.
Common questionsAnswers, without the confusion
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Most policies issued today replace up to around 70% of your pre-claim income, paid monthly while you remain unable to work under the policy definition.
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Generally, yes — the cost of income protection premiums held outside superannuation is largely tax deductible.
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This usually comes down to how much paid sick leave or savings you could draw on. A longer waiting period generally means a lower premium.
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Under an indemnity policy your benefit is based on your income at claim time (up to your sum insured); an agreed value policy locks in the amount at the outset, though these are largely closed to new applicants.
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Most policies do, subject to the insurer's terms — this is worth checking specifically given how common mental health-related claims have become.
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Some cover is available through super, but stand-alone policies typically offer more comprehensive definitions and flexibility.
Still not sure? A short phone call usually clears it up faster than reading another page.
Ready when you areYour income is your most valuable asset
Speak to our specialists today for a free quote and policy comparison.