Australia is one of the most underinsured countries in the developed world; according to insurance industry body Lifewise. Income protection is an essential consideration for anyone who relies on an income, and is one of the simplest and most affordable ways to protect you and your family. If you are unable to work and earn an income due to illness or injury, income protection insurance can provide you with a replacement income. This income can be up to 75% of your usual salary, for a predetermined period of time.

The NRMA website provides a good overview of the benefits of income protection and the level of cover available. But before you shop around for the best income protection insurance, there are a few things to look out for to make sure you’re getting the right cover for you.

Income Protection


Everyone’s circumstances are different, and as such, so are their insurance needs. Your insurer should be able to tailor your income protection policy to your needs, rather than taking a “one size fits all” approach.

One of the key points of difference between one income protection policy and another is whether you choose a stepped or level premium.

Stepped premiums start out cheaper, but will increase each subsequent year. Level premiums will not change as you get older, but they start out more expensive.

Waiting periods and the length of time you want to be insured will also need to be determined, as these will affect your premium.


Special options

The right income protection insurance not only provides flexibility, but also the special options you may need.

A good income protection insurance policy will include optional extras for circumstances such as injuries while on holiday, kids’ injuries, or permanent disability cover.

Holiday injuries cover will provide a one-off payment to cover the costs that may occur from doctor or hospital visits, travel and accommodation if you become injured while on holiday.

Kids’ injury cover will pay a benefit to help you meet the costs that are not covered by Medicare or your private health insurance if your child should become injured.

Permanent disability can have a profound effect on your life and that of your family. If you should become permanently disabled, this cover can provide you with a lump sum benefit to ease the financial burden. Permanent disability cover can help you meet not just cost of living, but additional expenses that may arise, such as long term disability care.



Your provider should be clear with you from the start about what your income protection insurance covers you for, as well as any limits to your cover.

Make sure that you understand what your waiting periods are, any exclusions to your policy and whether your premium will be subject to change. Having the right information from the beginning will allow you to make informed decisions in the future about your income protection and other insurance policies. A reputable insurer won’t hesitate to provide you with this information.

If you’re looking for an income protection policy, make sure your provider is flexible, transparent and provides you with the options you need. The best income protection insurance is a policy you can rely on when life doesn’t go to plan.