What is a benefit period and how long should it be?

The benefit period is the maximum time an insurer keeps paying your monthly benefit while you remain disabled. Common options across the panel: 2 years, 5 years, to age 65, and on some products to age 70.

Longer benefit periods cost more because the insurer carries a longer claim-payment risk. The choice between 2 years and to age 65 can double or triple the premium for an equivalent benefit amount.

How long do panel insurers go?

| Insurer | Benefit period options | PDS reference | |---------|-----------------------|---------------| | AIA | 2 year, 5 year, to age 65, to age 70 (CORE Flat 70% is to age 65 only) | Section 5 footnotes (PDS 9 Nov 2025) | | TAL | 1 year, 2 years, 5 years (IP Focus); to age 65 on higher tiers | Section 2.6 (PDS 12 Dec 2024) | | Zurich | 2 years, 5 years, to age 65 | Section: Income protection (PDS 1 Nov 2025) | | OnePath | 2 years, 5 years, to age 65; specific waiting/benefit combinations | Income Secure Cover (PDS Oct 2025) | | ClearView | To age 65 standard; CC2 (2-year cap) or CC5 (5-year cap) for certain occupations | Income Protection (PDS 13 May 2024, Update 5 Jun 2025) | | NEOS | 5-year option with 2-year waiting period documented; standard options also available | Income Support Cover (PDS 6 Dec 2024) | | Encompass | To age 65 with 2-year waiting period referenced via Two Year Waiting Period Reduction Benefit | Income Protection cover (PDS 26 Sep 2025) | | Acenda | 2-year option paired with longer benefit periods | Income Replacement (PDS 27 Sep 2025) | | Futura | 5-year benefit period with 2-year waiting; standard options also available | Section: Income Protection (PDS 1 Oct 2025) |

APRA's October 2021 IDII reforms also restricted some heavy-manual occupation classes to shorter benefit periods (often 2 or 5 years) regardless of insurer.

What to weigh up

The right benefit period depends on three things: your debts, your dependants, and your buffer of savings or other income. The trade-off looks like this.

Choose a longer benefit period if you have

• A mortgage or other long-term debt that would default after 2 years of no income
• Dependants who rely on your income through their childhood or your full working life
• Limited emergency savings or partner income
• A career where serious illness (cancer, severe mental illness, MS, chronic pain) could prevent work for many years

Consider a shorter benefit period if you have

• Substantial liquid assets or investment income to fall back on
• A working partner who can carry household costs
• A short remaining working life (within 5-10 years of retirement)
• A clear plan to self-insure beyond the 2 or 5 year window

What the 24-month income reset adds

For post-October 2021 contracts, the insurer recalculates your monthly benefit after 24 months on claim. The new amount is based on what someone in your role would now earn, not your original pre-disability income (APRA Information Paper, October 2021). This means a longer benefit period also exposes you to potential benefit changes after the 2-year mark. Pre-2021 legacy policies typically do not have this reset.

Practical guidance

Most brokers will model the cost difference between 2-year, 5-year, and to age 65 on a single quote so you can see the trade-off in dollar terms. A common middle ground for working-age adults with a mortgage and dependants is to age 65 with a longer waiting period (60 or 90 days) to keep premium manageable. This is general information only, not a personal recommendation. Discuss your circumstances with a licensed adviser before deciding.