Income Protection

What is Income insurance?

Your ability to earn an income is likely to be your most valuable asset in life. Insuring your income can give you peace of mind that your family and lifestyle will be protected while you recover if you are unable to work due to illness or injury. If you can’t work due to illness or injury, income insurance can provide you with a replacement income of up to generally 75% of your employment-related earnings until you are able to return to work.

What are the benefits?

Income insurance premiums are tax deductible. Also, the versatility of income insurance means the payment you receive, should you make a claim, is yours to spend as you choose like you would with your salary. 1

Counting the cost

Are your house and contents insured? What about your car? If you go overseas do you take out travel insurance? Most of us recognise the importance of protecting the assets we have accumulated over the years and rightly so, as we’ve worked hard to get them. But have you ever thought about protecting your ability to work? After all, it’s your income that enables you to own a house or pay your rent, maintain a car and take holidays.

How much does it cost?

Your insurance premium will be based on your age, smoking status, gender, occupation, health and the amount of cover you choose. Your financial adviser will develop a plan to suit your budget.

But I’m already covered

Even if you’ve thought about the potential of illness and injury, are you sure you’ll be protected financially regardless of the situation?

Sick leave entitlements

Typically covers salaried employees for 12 days absence a year due to illness or injury. Sick leave is a type of personal leave that employees can take when they can’t attend work, because they are sick or injured. Workers’ compensation—covers workers for injuries only associated within the workplace and does not cover you for illnesses. However, serious accidents can also occur outside the workplace, leaving those without income insurance cover vulnerable.

Private health cover

Many Australians (over 47% of the population) choose private health insurance for hospital treatment, but this does not extend to general living expenses such as groceries, utility bills and mortgage repayments. 2

Social security

Funds available from the Government should not be treated as a solution and most benefits are assets and means tested. Centrelink will pay a maximum disability support pension of $797.90 per fortnight for singles and $601.50 (each) for couples. 3 Depending on your current lifestyle, this may not be enough to cover your immediate needs.

It won’t happen to me

Having an illness or getting injured is not something we like to think about, however, the harsh reality is that it can happen to anyone. Research shows that illnesses and injuries don’t just affect the elderly.

Heart disease remains the leading cause of death for both males and females. 4

Stroke kills more women than breast cancer and more men than prostate cancer. 5

In 2013–14 about 531,800 people experienced a work related injury or illness—around 39% received no financial assistance. 6


1 Your benefit amount will be assessable for tax.

2 Private Health Insurance Administration Council, Quarterly Statistics March 2015.

3 Department of Human Services. (2016). Payment rates for Disability Support Pension. Note: These rates are subject to change.

4 Australian Bureau of Statistics. 3303.0 Causes of Death, Australia, 2015. Media release 103/2016, Dementia deaths continue to rise and population ages.

5 National Stroke Foundation. (2015). Tools and resources: Facts and figures about stroke.

6 Australian Bureau of Statistics. (24 November 2014). Work Related injuries Australia (cat. no. 6324.0).

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