Income Protection Australia | Compare Quotes

Income Protection Insurance

Income Protection insurance replaces up to 70% of your income if you're unable to work due to illness or injury. Unlike lump sum policies, income protection provides ongoing monthly payments to cover your bills and living expenses while you recover. Premiums held outside super are generally tax deductible — consult your tax adviser.

Who Needs Income Protection Insurance?

Self-employed with no sick leave
Single income households
Anyone with mortgage or rent commitments
People with limited savings
Commission-based workers
Contractors and freelancers

Key Details

Waiting Period: 14, 30, 60, or 90 days (your choice)
Benefit Period: 2 years, 5 years, to age 65, or to age 70 (your choice)
Expiry Age: Up to 70 (varies by insurer, refer to PDS)
Tax Deductible: Generally tax deductible (outside super, consult your tax adviser)

What Income Protection Insurance Covers

Monthly payments replacing up to 70% of income

Covers sickness and injury

Premiums generally tax deductible outside super

Choose your waiting period (14, 30, 60, 90 days)

Choose your benefit period (2, 5 years, to age 65, to age 70)

Includes rehabilitation support

Partial disability benefits available

Some policies include business expenses cover

Common Exclusions

Common exclusions may include (this is not exhaustive, always refer to the relevant Product Disclosure Statement for full terms):

Pre-existing conditions within specified period

Pregnancy-related claims (first 9-12 months)

Intentional self-inflicted injuries

Injuries from illegal activities

Normal childbirth (some policies)

Cosmetic procedures

Exclusions vary between insurers and products. Refer to each insurer's PDS for complete details.

Premium Examples

Indicative monthly premiums for income protection insurance. Your actual premium will depend on your health, occupation, and coverage amount.

Premiums for income protection insurance vary significantly based on your occupation, waiting period, and benefit period.

Compare with Other Insurance Types

See how income protection insurance compares to other types of coverage

Life Insurance

A lump sum payment to your loved ones when you pass away.

From: $20.83/month

Tax deductible: No

Learn More

Total and Permanent Disability Insurance

A lump sum if you can never work again due to illness or injury.

From: $32.50/month

Tax deductible: No

Learn More

Trauma Insurance

A lump sum if diagnosed with a serious illness like cancer or heart attack.

From: $38.50/month

Tax deductible: No

Learn More

Income protection after the APRA reforms

Income protection in Australia was substantially restructured by APRA between 2019 and 2022. Two regulatory changes shape every income protection policy issued today.

Agreed-value contracts banned for new policies from 31 March 2020. Pre-2020 agreed-value contracts (where the monthly benefit was locked in at application based on income at that point) remain in force, but no insurer on our panel issues new agreed-value cover. All current policies are indemnity-based, which means the benefit is calculated against your actual pre-disability income at claim time (not at application).
Income replacement subject to APRA caps under the Sustainable Income Protection framework effective 1 October 2021. Each insurer structures the tier caps differently (commonly 70% on the first income tier, scaling down on higher brackets). Refer to the per-insurer profiles below for the specific tier structure on each panel insurer.
Benefit period structure tightened. Under the post-2021 sustainability framework, default benefit periods for new policies tend toward shorter (2 or 5 years), with to-age-65 still available under specific definitions and occupation classes, varies by insurer and occupation class.
Income definition tightened to ensure the benefit doesn't exceed actual pre-disability earnings, particularly where income has reduced since the policy was issued.

Practical effect: if your income has reduced since you took out an indemnity policy, the benefit at claim may be lower than the insured amount. Reviewing the cover after major income changes is a common annual-review action item.

Waiting periods and benefit periods explained

The waiting period and benefit period are the two single levers that most influence income protection premium pricing. Choosing the right combination is a balance between premium cost, sick-leave reserves, and how long you can afford to be without income.

Waiting periods

The waiting period is the time between when disability begins and when the insurer starts paying the monthly benefit. Common options across our panel:

14 or 30 days, shortest waits, highest premium. Suited to clients with little or no sick leave (self-employed, contractors, casual workers).
60 days, middle option. Common default for employees with moderate sick leave reserves.
90 days, most common. Substantial premium reduction over 30-day. Suited to employees with 3+ months of sick leave and savings.
2 years, only available where you already hold group income protection cover with a 2-year benefit period (ClearView specifically).

Benefit periods

The benefit period is how long the insurer continues to pay while you remain disabled. Common options:

2 years, short, lowest premium. Covers the most common claim duration but leaves long-term illness risk uninsured.
5 years, most common. Captures the majority of long-tail claims.
To age 65 (or 70), longest, highest premium. Restricted to specific occupation categories on most panel insurers under the post-2021 APRA rules.

How income protection compares across our 9 panel insurers

Each insurer on our panel offers income protection under a slightly different product name, tier structure, and benefit-calculation method. The factual differences below are sourced from each insurer's current Product Disclosure Statement. We do not rank or recommend a single insurer, placement depends on your circumstances and underwriting outcome, and we provide general advice only.

AIA Income Protection

Product: AIA Priority Protection, Income Protection CORE / Advantage / PLUS

AIA offers Income Protection in three tiers: Income Protection CORE (the post-APRA-reform product issued from 1 October 2021), Advantage Optional, and PLUS Optional. CORE is the standard tier; Advantage and PLUS add enhanced definitions and partial-disablement structures. Replacement of pre-existing AIA agreed-value cover follows the APRA transition rules.

Benefit structure: Total Disablement and Partial Disablement benefits, with definitions based on Own Occupation duties for the first 24 months then a Suited Occupation test from month 25 onwards on Income Protection CORE. Advantage and PLUS Optional offer enhanced cover for total and partial disablement based on hours, duties, or income.
Income replacement rules: Maximum Insured Monthly Benefit for IP CORE: $30,000 per month for occupation categories A1, A2, M, A3, A4; $25,000 for B1, B2, C1, C2; $15,000 for D. Income tiered cap: 70% of pre-disablement income on the first portion, with reductions for higher tiers per the standard CORE structure.
Waiting and benefit periods: Waiting periods include 14, 30, 60, or 90 days (specific availability depends on occupation). Benefit periods include 2-year, 5-year, or to-age-65 (CORE), with restrictions by occupation and at application time.
Notable features: IP CORE replaces older Income Protection structures and follows APRA-mandated post-31 March 2020 indemnity-only structure
Advantage Optional and PLUS Optional add enhanced multi-definition disablement
Insured Super Contribution Benefit available (counts toward $30,000 per month combined cap)
Recurrent Disablement: if you return to full-time work and disablement reoccurs within 12 months from same/related cause, payments resume without further waiting period
Benefit Indexation increases sum insured by the higher of CPI Increase and 3% each year
Waiver of Premium during claim included
Day 1 Accident benefit available as Rider Benefit
Complimentary Interim Accidental Death Cover up to $30,000 outside super while application is being assessed

See more on AIA →

TAL Income Protection

Product: TAL Accelerated Protection, IP Focus / IP Enhance / IP Extend

TAL offers Income Protection at three tiers: IP Focus, IP Enhance, and IP Extend. Each tier has different features and Benefit Periods. Income Protection is APRA-compliant and indemnity-based for new policies.

Benefit structure: Totally Unable to Work Benefit and Partially Unable to Work Benefit. IP Focus pays the Benefit Amount with adjustments for partial disability, IP Enhance pays the Benefit Amount for the first 24 months then 2/3 of Benefit Amount thereafter, IP Extend pays the Benefit Amount for the first 24 months then Benefit Amount less 100% of Earnings while on claim from month 25 onwards.
Income replacement rules: Maximum proportion: 70% of the first $25,000 per month ($300,000 per annum) of Earnings; 50% of the next $16,666 per month ($200,000 per annum); 20% of remaining Earnings. Maximum Insured Benefit Amount: up to $30,000 per month including any Insured Super Contribution Benefit Amount.
Waiting and benefit periods: Waiting periods: 4, 8, 13, or 26 weeks. Benefit Periods: 1 year, 2 years, or 5 years for IP Focus; To age 65 for IP Enhance and IP Extend.
Notable features: Three IP tiers, Focus / Enhance / Extend, let you trade premium for benefit period and definition richness
IP Enhance reduces benefit to 2/3 after month 24; IP Extend reduces by 100% of Earnings (return-to-work incentive built in)
Super Contribution Option pays up to 100% of Employer Super Contribution amount, capped at 15% of Pre-Claim Earnings
Permanent Incapacity Reset Benefit available on IP Enhance
Variable Age-Stepped Premiums entry 19-60 (occupation A); 19-55 (occupation BBB-B/SRA)
Bed Confinement Benefit and Death Benefit only payable during the Waiting Period
Pre-Claim Earnings tested at claim, if income has reduced since policy purchase, benefit may be lower than insured

See more on TAL →

Zurich Income Protection

Product: Zurich Wealth Protection, Zurich Income Safeguard

Zurich offers Income Safeguard, providing a monthly benefit if the life insured is unable to work solely due to sickness or injury for longer than the specified waiting period. Zurich emphasises rehabilitation and return-to-health as part of its claim philosophy.

Benefit structure: Indemnity-based monthly benefit. The PDS describes how the monthly benefit is calculated, with adjustments for partial disability and other concurrent income.
Income replacement rules: Insured monthly benefit set at policy commencement based on income at the time of underwriting. The PDS does not state a single headline percentage cap in the body, refer to the policy schedule and the income-protection definition for the calculated cap based on your individual income at application.
Waiting and benefit periods: Waiting and benefit periods are shown on the policy schedule. Standard waiting period options align with industry norms (typically 30, 60, or 90 days). Benefit periods commonly extend to age 65 or 70.
Notable features: Inflation protection (CPI indexation) applied automatically each year unless opted out
Zurich emphasises rehabilitation and return-to-health support as part of claim management
Adheres to the Life Insurance Code of Practice principles of conduct
If cover is held in superannuation, monthly benefits are only payable if the life insured meets the SIS Act temporary incapacity definition
Cover-while-unemployed: complimentary cover applies if total or partial disability arises from sickness or injury during unemployment
Variable age-stepped or variable premium options
Standard income-protection definition published in the PDS, refer to the policy schedule for your individually-set monthly benefit

See more on Zurich →

OnePath Income Protection

Product: OnePath OneCare, Income Secure Cover / Living Expense Cover

OnePath OneCare offers Income Secure Cover (the standard income protection product) and Living Expense Cover (a separate product for people who do not qualify for Income Secure Cover, such as homemakers, retirees, or part-time/casual workers). Income Secure Cover replaces up to 70% of monthly income.

Benefit structure: Income Secure Cover pays a monthly benefit if the life insured is totally or partially disabled due to sickness or injury. Living Expense Cover pays an agreed monthly benefit if the life insured is significantly disabled.
Income replacement rules: Maximum monthly amount insured: $30,000 per month for Income Secure Cover (most occupations); $10,000 per month for Income Secure Cover for occupation category R. Maximum insurable per life: 70% of the first $300,000 of annual income, plus 50% of the next $200,000, plus 25% of the balance.
Waiting and benefit periods: Waiting periods include 30, 60, or 90 days (longer waits available for higher occupation categories). Benefit Periods: 2 years, 5 years, or to age 65/70 (subject to occupation and definition). Living Expense Cover: $5,000/month max.
Notable features: Earn 1 Qantas Frequent Flyer point for every $1 of premium paid on eligible OneCare policies, up to 20,000 points per policy per year
Severity Booster Option upgrades the benefit calculation for specified severe events
Living Expense Cover designed for those without traditional employment income (homemakers, retirees, casuals), agreed monthly benefit
Tiered income cap: 70% / 50% / 25% across income brackets, with consideration of household earnings during application
Code-of-Practice minimum medical definitions apply to specified IP claim triggers
Indexation, Future Increase, and Suspending Cover benefits all included
TPD Lump Sum option available where age-65 benefit period selected (with potential tax-deductibility implications)

See more on OnePath →

Clearview Income Protection

Product: Clearview ClearChoice, Income Protection (IP60 / IP70 / IP70 reducing)

Clearview ClearChoice Income Protection pays a monthly benefit (the Income Support Benefit) while the life insured is disabled as a result of sickness or injury. Three benefit types: Income Protection (IP60), Income Protection Flex (IP70 reducing), and Income Protection Flex (IP70).

Benefit structure: IP60 pays 60% of regular annual income. IP70 reducing pays 70% of the first $300,000 of regular annual income and 60% of the next $250,000, and the maximum amount payable reduces to 85.72% of the first 24-month amount after 24 months. IP70 follows the same income tiers without the post-24-month reduction.
Income replacement rules: Minimum insured monthly benefit: $1,500 per month including any superannuation contributions. Maximum insured monthly benefit: $30,000 per month including any superannuation contributions across all income protection covers held with us or other insurers.
Waiting and benefit periods: Waiting period before Income Support Benefit becomes payable: 30, 60, or 90 days; or 2 years (only if already covered by existing group income protection with a 2-year benefit period). Benefit payment period: 2 years (regular occupation), 5 years (regular occupation), or age 65 (regular occupation changing to suited occupation 30 months from disability date).
Notable features: IP60 (60% income) is the lowest-cost tier; IP70 reducing or IP70 add up to 70% of income at higher cost
Death Benefit, Indexation Benefit, Future Increase Benefit, Relapse Benefit, Extended Cover Benefit included as built-ins
Waiver of Monthly Premium While Involuntarily Unemployed Benefit included
Income Support Booster Option, Increasing Claim Option, and Specified Events Option available at extra cost
TPD Lump Sum Option (no extra premium) available with age 65 benefit period, note may affect tax deductibility
Eligibility: gainfully employed for at least 20 hours per week
Variable age-stepped (entry to age 60) or Variable premium (entry to age 55); expiry age 65

See more on Clearview →

NEOS Income Protection

Product: NEOS Protection, Income Support Cover

NEOS Protection includes Income Support Cover as one of five cover types alongside Life, TPD, Critical Illness, and Child Cover. Income Support Cover provides a monthly benefit while the life insured is disabled, with structure compliant with APRA's post-2020 sustainability framework.

Benefit structure: Total Disablement and Partial Disablement benefits with monthly payment after the waiting period. The cover is indemnity-based following APRA reforms.
Income replacement rules: Maximum monthly benefit: refer to PDS for current limits, broadly aligned with industry norms of 70% of pre-disability income (subject to insurer's tier cap). Specific amount published in the PDS section "Amounts you can insure".
Waiting and benefit periods: Standard waiting period options (30, 60, 90 days). Benefit periods commonly include 2 years, 5 years, or to age 65/70, refer to the PDS for current availability by occupation.
Notable features: Indexation, Suspending Cover, and Future Increase benefits included
Waiver of Premium While Involuntarily Unemployed Benefit included
Replacement cover provisions for transferring from another insurer with continuity terms
APRA-compliant indemnity structure for all post-2020 issued cover
Disability Premium Waiver Option available at additional cost
13-month suicide exclusion applies (industry standard); pre-existing condition exclusions apply per PDS

See more on NEOS →

Encompass Income Protection

Product: Encompass Protection, Income Protection Cover

Encompass Protection includes Income Protection Cover as one of four cover types. Provides a monthly benefit if the life insured is unable to work due to sickness or injury, with structure compliant with APRA's post-2020 sustainability framework.

Benefit structure: Total Disablement and Partial Disablement benefits with monthly payment after the waiting period. Indemnity-based for all new cover post-2020 reforms.
Income replacement rules: Maximum monthly benefit: refer to PDS for current limits. Income replaced up to 70% of pre-disability income (subject to insurer's individual tier cap), aligning with APRA's 2021 IP sustainability framework.
Waiting and benefit periods: Standard waiting periods (30, 60, 90 days). Benefit periods commonly include 2 years, 5 years, or to age 65, refer to the PDS for current availability by occupation.
Notable features: Indexation Benefit and Future Increase Benefit included
Suspending Premium and Cover available
Premium Waiver Option available at additional cost
Variable age-stepped premium only
APRA-compliant indemnity structure for all post-2020 issued cover
Specific Loss Benefit may interact with concurrent claims under Life and TPD covers

See more on Encompass →

Acenda Income Protection (formerly MLC)

Product: Acenda Insurance, Income Protection

Acenda is the rebrand of MLC Limited (rebrand completed in 2024). APRA continues to report the underlying legal entity as MLC. Acenda Insurance offers Income Protection with two tier settings, Assure and Assure+.

Benefit structure: Total and Partial Disability monthly benefits. Assure is the standard tier; Assure+ adds enhanced features and partial-payment structures.
Income replacement rules: Maximum sum insured: refer to the Acenda PDS schedule for current limits, broadly $30,000/month for higher occupation categories. Tiered income cap follows APRA post-2020 sustainability rules with 70% replacement on the first income tier.
Waiting and benefit periods: Standard waiting periods. Benefit periods commonly include 2 years, 5 years, or to age 65, refer to the PDS schedule for current availability.
Notable features: Two-tier structure (Assure / Assure+) lets you trade premium for benefit richness
Stand-alone or Extension/Connection claim structures available across the Acenda product range
Indexation, Future Increase, and Premium Freeze available
APRA-compliant indemnity structure for all post-2020 issued cover

See more on Acenda →

Futura Income Protection

Product: Futura Protection, Income Protection Cover

Futura Protection (underwritten by NobleOak) includes Income Protection Cover as one of five cover types. Eligibility: aged 18-60, gainfully employed for at least 20 hours per week.

Benefit structure: Total Disability and Partial Disability monthly benefits. Indemnity-based for all post-2020 issued cover, following APRA sustainability rules.
Income replacement rules: Maximum monthly benefit: refer to PDS for current limits. Income replaced up to 70% of pre-disability income (subject to insurer tier cap), per APRA framework.
Waiting and benefit periods: Standard waiting period options (30, 60, 90 days). Benefit periods commonly include 2 years, 5 years, or to age 65, refer to PDS for current availability.
Notable features: Eligibility requires gainful employment of at least 20 hours per week
Indexation Benefit, Suspending Cover Benefit, Future Increase Benefit included
Waiver of Premium While Involuntarily Unemployed Benefit included
Cancer, heart attack, and stroke claims under linked Critical Illness assessed against both PDS definition and Code minimum
Disability Premium Waiver Option available at additional cost
Replacement cover from previous insurer may waive qualifying period if continuity conditions met

See more on Futura →

Facts above are sourced from each insurer's current PDS as at the date of writing. Refer to the relevant Product Disclosure Statement for full terms, definitions, and exclusions before purchasing.

Income protection quotes, what to expect

Income protection premiums vary widely. Where the Premium Examples table earlier on this page shows indicative figures, they come from our reference-premium dataset for a male non-smoker professional in NSW. Your actual premium will depend on age, gender, smoking status, occupation class, monthly benefit insured, waiting period, benefit period, premium structure, and underwriting outcome. Where the dataset doesn't yet include income protection figures, request an indicative quote via our IP-specific quote tool.

A few common drivers of income protection premium pricing:

Waiting period, moving from 30 days to 90 days commonly saves 20-30% on premium with otherwise identical cover.
Benefit period, moving from to-age-65 to 5 years commonly saves 20-40% on premium. The trade-off is exposure to long-tail claims (mental health, cancer recovery, musculoskeletal).
Occupation class, manual and high-risk occupations attract significant loadings. Tradies and FIFO workers typically pay substantially more than office-based professionals.
Smoking status generally produces a substantial loading above non-smoker rates.
Premium structure, stepped premiums start lower and rise with age; level premiums hold to a fixed schedule but cost more upfront.
Tax deductibility, for personal IP cover held outside super, premiums are generally deductible (consult your tax adviser). The benefit when paid is taxable income. The net-of-tax cost is often substantially lower than the headline premium.

How to compare income protection

Headline price is a starting point but not the whole story. Two policies with the same monthly benefit can differ in their definitions, exclusions, and partial-benefit mechanics. Here are the common considerations.

Total Disability definition. The wording determines whether you qualify for the full monthly benefit. Most panel insurers use a duties-based definition for the first 24 months, then a suited-occupation test from month 25.
Partial Disability mechanics. If you return to work in a reduced capacity, the partial benefit is calculated in different ways across the panel. Some pay the full benefit less 75% of earnings; others pay a proportion of the total benefit based on hours/income reduction.
Mental health and pregnancy exclusions. Most panel insurers cover mental health under standard cover (with some loading risk at underwriting); some cap mental-health benefit periods at 2 years. Pregnancy-related claims have a 9-12 month exclusion period on most policies.
Income replacement tier structure. Under the APRA Sustainable Income Protection framework (effective 1 October 2021), insurers cap income replacement at 70% on the first income tier with progressively lower caps on higher brackets. The exact tier structure varies, see the per-insurer profiles above for the specific caps on each panel insurer.
Super contribution option. Most insurers offer an Insured Super Contribution Benefit on top of the monthly benefit, capped at 15% of pre-disability earnings (TAL specifically).
Waiver of premium during claim. Standard feature on all panel insurers, you don't pay premiums while on claim.
Recurrent disablement. If you return to work then relapse from the same cause within 12 months, the second claim usually recommences without a fresh waiting period (AIA explicitly).
Inside super vs outside. IP held inside super is paid for from your super balance (cash-flow friendly) but the benefit on claim is taxed as a super income stream and the SIS Act temporary incapacity definition must be met.

For a side-by-side feature comparison, visit our income protection comparison page. If you're a tradie or work in a high-risk occupation, our tradie-focused IP guide walks through the occupation-class loadings.

Income protection, frequently asked questions

Common questions Australians ask about income protection waiting periods, benefit periods, agreed value vs indemnity, and tax treatment.

What is Income Protection Insurance and how does it work?+

**Income Protection (IP) pays a monthly benefit when illness or injury stops you working.** It replaces up to 70% of pre-disability income, after a chosen waiting period, for a set benefit period or until you recover. Every retail IP contract on IMFL's panel was issued after APRA's October 2021 reforms, so the 70% cap, indemnity-only structure, and 24-month income reset apply across the board. The panel is AIA, Zurich, TAL, OnePath, ClearView, NEOS, Encompass, Acenda, and Futura. ## How the mechanics fit together 1. You pick a waiting period (the gap between disablement and first payment). 2. You pick a benefit period (the maximum payment runway: 2 years, 5 years, or to age 65). 3. Illness or injury occurs. You stop work and start treatment. 4. After the waiting period ends and the insurer accepts the claim, monthly benefits begin. 5. Payments continue until you recover, the benefit period ends, or the policy's other limits engage (such as the mental-illness sub-limit if relevant). ## Where each panel insurer documents the 70% cap - **AIA Priority Protection PDS** (Version 32, 9 November 2025), Section 5.1.2 (Built-in Benefits): 70% of monthly Pre-disablement Income at the time of becoming Totally or Partially Disabled. - **TAL Accelerated Protection PDS** (12 December 2024), Section 2.6: 70% of the first $25,000 per month ($300,000 per annum) of your Earnings. - **Zurich Wealth Protection PDS** (1 November 2025), Income Protection section: You can insure up to 70%, tiered above $240,000. - **OnePath OneCare PDS** (October 2025), Income Secure Cover: 70% of the first $300,000 of annual income as at the Cover start date. - **ClearView ClearChoice PDS** (13 May 2024, update 5 June 2025), Income Protection Flex (IP70): 70% of your pre-disability earnings. - **NEOS Protection PDS** (6 December 2024), Income Support Cover: 70% of the first $25,000 per month of your regular income. - **Encompass Protection PDS** (26 September 2025), Income Protection Cover: 70% of your first $240,000 of annual pre-disability earnings, divided by 12. - **Acenda Insurance PDS** (27 September 2025), Income Protection: 70% of your Earnings Before Disability (then 20% on the next band for 6 months). - **Futura Protection PDS** (1 October 2025), Income Protection Cover: 70% of the first $25,000 per month of your regular income. ## What IP is not IP is not a lump-sum product. TPD and Trauma pay once. IP pays monthly, and only while you remain unable to work under the policy's definition. IP is also not redundancy cover: you must be unable to work due to illness or injury, not because you have lost your job. ## Regulator anchor The 70% cap, the 24-month income reset, and the indemnity-only structure all flow from APRA's Information Paper *Individual Disability Income Insurance*, October 2021. The Insurance Contracts Act 1984 governs the contract itself.

What percentage of my income can I insure with Income Protection?+

**Income Protection replaces up to 70% of your gross pre-disability income.** APRA's October 2021 Individual Disability Income Insurance (IDII) reforms set this cap for every new retail policy issued by panel insurers. ## Why the cap exists APRA introduced the 70% cap to keep a financial incentive to return to work. The rule prevents insurers from putting you in a better post-tax position when disabled than when working. The full framework sits in the APRA Information Paper *Individual Disability Income Insurance* (October 2021), published at apra.gov.au. The 70% applies to gross income before tax. Benefits paid outside super are taxable as ordinary income, and premiums paid from personal cash are generally deductible under ITAA 1997 s8-1 (see ATO TR 95/35). ## How each panel insurer applies the cap The headline rate is 70% across all 9 panel insurers, but most apply a tiered (sliding-scale) structure to high earners. Income above a threshold is replaced at a lower rate, again to preserve the return-to-work incentive. | Insurer | Replacement structure | PDS reference | |---------|----------------------|---------------| | **AIA** | 70% of first $20,000 monthly pre-disablement income, then tiered above | Income Protection CORE, Section 5.1.2 (PDS 9 Nov 2025) | | **TAL** | 70% of first $25,000 per month ($300,000 p.a.) | Section 2.6 (PDS 12 Dec 2024) | | **Zurich** | 70% of first $240,000 p.a., 50% of next $60,000 | Section: Income protection (PDS 1 Nov 2025) | | **OnePath** | 70% of first $300,000 of annual income at Cover start | Income Secure Cover (PDS Oct 2025) | | **ClearView** | 70% pre-disability earnings (Income Protection Flex IP70); IP60 variant available | Income Protection, Section (PDS 13 May 2024, Update 5 Jun 2025) | | **NEOS** | 70% of first $25,000 per month of regular income | Income Support Cover (PDS 6 Dec 2024) | | **Encompass** | 70% of first $240,000 p.a. pre-disability earnings, divided by 12 | Income Protection cover (PDS 26 Sep 2025) | | **Acenda** | 70% of first $240,000 Earnings Before Disability; 20% next band for 6 months only | Income Replacement Ratio Amount (PDS 27 Sep 2025) | | **Futura** | 70% of first $25,000 per month of regular income | Income Protection Cover (PDS 1 Oct 2025) | ## What counts as insurable income For PAYG employees, base salary plus regular bonuses, commissions and overtime averaged over 12 months is the usual basis. Investment income, rental income, and one-off windfalls are generally excluded. For self-employed earners, insurable income is net business income after deductible business expenses but before personal income tax. The exact definition varies by insurer, so check the PDS for the version that applies to your income mix. ## What this means in practice If you earn $120,000 gross, the maximum monthly benefit is $7,000 (70% of $10,000). Super-fund IP (salary continuance) sits inside the same APRA framework and is also capped at 70%. Pre-October 2021 policies sometimes carried higher replacement ratios (up to 75% or more) under the old framework. Those legacy contracts may continue under their original terms, but new policies cannot match them. This is general information, not personal advice.

What is a waiting period and which one should I choose?+

**The waiting period is the gap between disablement and your first monthly payment.** It is the deductible portion of an IP claim, and the longer you choose, the lower the premium. Panel insurers offer waiting periods from 14 days at the short end to 2 years at the long end. Most retail policies sold sit at 30, 60, or 90 days. You serve the waiting period using sick leave, savings, employer disability schemes, or any other resource that bridges the gap. ## Waiting period options across the panel | Insurer | Available waiting periods | |---|---| | AIA | 14, 30, 60, 90 days, up to 2 years for some structures | | Zurich | 4, 8, 13, 26 weeks, or 2 years | | TAL | 4 weeks, 13 weeks, plus 30, 60, 90 days and 2 years | | OnePath | 30, 60, 90 days, 1 year, 2 years (5 years for some structures) | | ClearView | 30, 60, 90 days, plus 2 years for restructured cover | | NEOS | Standard 30, 60, 90 days, plus 2 years | | Encompass | Standard short waits, plus 2-year option with Two Year Waiting Period Reduction Benefit | | Acenda | 14, 30 days standard, plus 2 years | | Futura | 30, 60, 90 days, or 2 years | See **AIA Priority Protection PDS** (Version 32, 9 November 2025), waiting period section; **Zurich Wealth Protection PDS** (1 November 2025), Income protection section; **TAL Accelerated Protection PDS** (12 December 2024), Section 2.6.1; **Acenda Insurance PDS** (27 September 2025); **Futura Protection PDS** (1 October 2025). ## How the choice affects premium and claim A shorter waiting period (14 or 30 days) is paid for in higher premiums but pays out earlier. A 90-day or longer waiting period is the standard cost-saver because most short-term claims (under three months) fall away. The two-year option is the cheapest, and it is the option most often paired with retail IP that sits behind employer salary continuance or substantial sick-leave buffers. ## Common considerations when choosing - **Sick-leave entitlement**: If you accrue 10 to 20 paid sick days per year and have a partner's income, a 30-day waiting period might fit. - **Liquid savings**: With 3 to 6 months of expenses saved, a 60- or 90-day wait reduces premium materially. - **Self-employed**: No sick leave means a shorter wait (14 to 30 days) often makes sense, even at higher premium. - **Group cover behind retail**: If you have employer-provided salary continuance for the first 90 days, pairing it with a 90-day or 2-year retail wait avoids paying twice for the same window. ## Consecutive versus aggregate A consecutive waiting period requires unbroken disability. Return to work for one day during a 30-day consecutive wait and the clock restarts. An aggregate waiting period totals up qualifying days within a defined window (often 60 or 90 days) and is more forgiving for conditions with flare-ups. Most modern panel PDSs default to or offer aggregate. See **TAL Accelerated Protection PDS** Section 2.6 and the consecutive-versus-aggregate FAQ for the structural distinction.

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.

Are Income Protection insurance premiums tax deductible?+

**Yes. Personally paid Income Protection premiums are generally deductible under ITAA 1997 s8-1. Benefits are assessable as income.** The deductibility test rests on the premium being incurred to produce assessable income (the IP benefit itself). The rule is general advice. Your specific tax position depends on how the cover is owned, how you pay premiums, and any structuring through a business or super. Always confirm with your accountant or refer to the ATO directly. ## The ATO position The Australian Taxation Office sets out the deductibility position in: - **ATO Taxation Ruling TR 95/35** (Income tax: deductibility of income protection insurance premiums) - **ATO Taxation Ruling TR 85/36** (Income tax: receipts of insurance proceeds) - **ITAA 1997 s8-1** (General deductions) - ATO website page *Insurance premiums - income protection* The core principle: premiums for an insurance policy that produces assessable income (a taxable monthly benefit) are deductible because they are an expense incurred to produce that assessable income. Benefits, being assessable income, are taxed at the claimant's marginal rate in the year received. ## Owning IP personally (outside super) - Premiums paid from after-tax income are generally deductible to the individual. - Benefits paid to the individual are assessable income and taxed at marginal rates. - This is the standard structure for retail IP on the panel. - The deduction reduces the effective after-tax premium cost. Worked example: a $2,500 annual premium for a person in the 37% marginal bracket has an effective after-tax cost of about $1,575. - Lodge the deduction in your tax return under the 'Income protection insurance' label. ## Owning IP inside super - Premiums are funded from the super balance, often using pre-tax employer or salary-sacrifice contributions. - Personal premium deduction is not available (you have not paid out of pocket). - The super-fund trustee may claim the deduction inside the fund. - Benefits paid to your super account may be taxable when accessed, depending on age and component (taxable versus tax-free). - This structure suits clients constrained on cash flow but adds tax complexity at claim time. ## What is excluded from the deduction - The portion of a combined premium attributable to Life or TPD cover (lump-sum risk is not deductible to the individual). - The portion attributable to Trauma cover (also non-deductible). - Riders that provide non-income benefits (some specified-injury or critical-event lump sums). Most panel insurers issue annual premium-paid statements separating the IP component from any combined cover. Use that statement at tax-return time. The statement is the substantiation document if the ATO asks. ## Where the panel PDSs sit on tax No panel PDS makes tax representations. Each refers you to the ATO. **TAL Accelerated Protection PDS** (12 December 2024) says please visit www.ato.gov.au for more information. **AIA Priority Protection PDS** (Version 32, 9 November 2025), **Zurich Wealth Protection PDS** (1 November 2025), and others follow the same disclaimer pattern: the tax position is your responsibility to confirm with a registered tax agent. ## What changes the answer - **Self-employed or business-owned IP**: deductibility flows through the business entity. Different rules apply to companies, trusts, sole traders, and partnerships. - **Combined-cover policies**: only the IP portion deducts. The insurer's premium statement separates the components. - **Salary continuance through group super**: trustee claims the deduction, not you. - **Benefits later assessed as compensation**: rare, but if a benefit is paid as a lump-sum compromise on commutation, the tax treatment may differ from monthly benefit treatment. ## Practical takeaways 1. Get the insurer's annual premium statement separating IP from any other cover. 2. Lodge the IP-only premium amount as a tax deduction. 3. If you start a claim, expect monthly benefit payments to be PAYG-withheld at source or to require quarterly tax payments via your tax agent. 4. Speak to your accountant or check the ATO website if your cover is structured through a business, super, or trust.

What's the difference between Agreed Value and Indemnity Income Protection policies?+

**New Agreed Value policies are no longer sold in Australia. Since 31 March 2020, all newly issued retail Income Protection contracts are indemnity-based, later confirmed by APRA's October 2021 IDII reforms.** Existing pre-2020 Agreed Value contracts may continue under their original terms. ## The two structures ### Agreed Value (historical, no new policies) Under an Agreed Value policy, you and the insurer fixed your monthly benefit at application time based on your income then. At claim time, the insurer paid the agreed amount regardless of your current earnings. This gave certainty to commission-based, self-employed, or variable-income workers whose earnings might drop between application and claim. ### Indemnity (the only structure available for new business) Under an indemnity policy, your monthly benefit is calculated at claim time from your actual recent earnings. The lookback is typically the highest consecutive 12 months in the 2-3 years before disability, depending on insurer. The sum insured on your schedule is a maximum, not a guaranteed payment. ## What APRA changed and why APRA issued a Letter to All Life Insurers in December 2019 and again in May 2020, citing $5+ billion in industry IP losses over five years. The May 2020 letter banned new Agreed Value contracts from 31 March 2020. The October 2021 IDII Information Paper consolidated the framework: indemnity-only, 70% replacement cap, mandatory 24-month income reset for long-running claims (apra.gov.au). ## How each panel PDS reflects this | Insurer | Structure | PDS evidence | |---------|-----------|---------------| | **AIA** | Indemnity Only and Extended Indemnity columns; Agreed Value only available when replacing existing Priority Protection Agreed Value cover | Section 5, PDS 9 Nov 2025 | | **TAL** | Indemnity is the default for Accelerated Protection | Section 2.6 (PDS 12 Dec 2024) | | **Zurich** | "This policy provides indemnity cover" stated explicitly | Section: Income protection (PDS 1 Nov 2025) | | **OnePath** | Indemnity benefit payment is the contract default | Income Secure Cover (PDS Oct 2025) | | **ClearView** | Indemnity is the default; business expenses also indemnity | Income Protection (PDS 13 May 2024, Update 5 Jun 2025) | | **NEOS** | Indemnity only; no Agreed Value option in PDS | Income Support Cover (PDS 6 Dec 2024) | | **Encompass** | Indemnity only by absence of Agreed Value clause | Income Protection cover (PDS 26 Sep 2025) | | **Acenda** | Indemnity cover defined; "Income Replacement Ratio Amount" basis | Glossary (PDS 27 Sep 2025) | | **Futura** | Indemnity only by absence of Agreed Value clause | Income Protection Cover (PDS 1 Oct 2025) | ## What this means if your income varies The loss of Agreed Value mostly affects commission earners, sole traders, contractors, and people whose income trajectory may dip. Under indemnity, the recent earnings test means a bad 12 months before a disability claim could reduce your payable benefit even if your sum insured is higher. Three practical responses are available under current contracts. - **Best 12 of 24 (or 36) months test**: some insurers use the highest consecutive 12 months in the lookback window, smoothing out a one-off bad year. Check the PDS for the exact lookback. - **Income link / income protection lock options**: a few insurers let you re-disclose your higher historical income at points during the policy, locking in a higher benefit basis. Availability and rules vary. - **Maintain income records**: keep tax returns, BAS, profit-and-loss statements, and contracts so you can substantiate higher pre-disability income at claim time. ## If you hold a pre-2020 Agreed Value policy Do not let it lapse without understanding what you lose. New replacement cover under post-2021 rules cannot match the Agreed Value structure. Discuss any change with a licensed adviser before cancelling legacy cover. This is general information, not personal advice.

How much does Income Protection insurance typically cost?+

**IP premium varies by age, gender, occupation class, smoking status, waiting period, benefit period, monthly benefit, and optional features.** A 35-year-old white-collar non-smoker insuring $5,000 per month with a 90-day wait to age 65 will pay materially less than a 50-year-old manual worker with a 30-day wait. Quotes are the only way to size the actual cost. IMFL's quote engine pulls live rates from each panel insurer using your specific occupation, age, and structure. Below is the framework of what drives the number. ## The seven main premium drivers ### 1. Age The single largest factor. Premiums rise steeply through your 40s and 50s as disability claim probability rises. A 30-year-old quote and a 50-year-old quote for the same cover can differ by 200% or more. ### 2. Gender Women typically pay more for IP than men at younger ages, reflecting historical claims experience. The differential narrows with age. ### 3. Occupation class Each panel insurer publishes an occupation guide. Class codes range from professional (P1, P2) at the lowest premium to heavy-manual (M, X) at the highest. The class drives both premium and which benefit periods are available. ClearView explicitly restricts CC2 and CC5 classes to 2- or 5-year benefit periods. See **ClearView ClearChoice PDS** (13 May 2024, update 5 June 2025), occupation guide. ### 4. Smoking status Non-smokers pay materially less than smokers across all panel insurers. The differential is significant: often 30-50% on a like-for-like quote. ### 5. Waiting period Shorter waiting periods cost more. A 30-day wait costs materially more than a 90-day wait. A 2-year wait is the cheapest option on the panel. See **AIA Priority Protection PDS** (Version 32, 9 November 2025) and **Zurich Wealth Protection PDS** (1 November 2025) on waiting-period options. ### 6. Benefit period Longer benefit periods cost more. A 2-year benefit period is materially cheaper than a to-age-65 benefit period for the same monthly amount. The cost difference reflects the insurer's expected lifetime claim exposure. ### 7. Optional features Increasing Claim Option (in-claim CPI escalation), Super Contribution Option (employer SG paid while on claim), Day 1 Accident Benefit, Specified Injury Benefit. Each option adds a percentage to the base premium. See **AIA Priority Protection PDS** Section 7 (Built-in and Optional Benefits); **TAL Accelerated Protection PDS** (12 December 2024) Section 2.6.3. ## Premium structures ### Stepped premiums The default on most panel contracts. Premium recalculates at each policy anniversary based on your current age. Starts cheap. Rises steeply in later years. ### Level premiums Flat for a defined period or until a stated age (often 65). Starts higher than stepped. Cheaper in aggregate if you hold the policy for many years. ### Variable Age-Stepped (Zurich, AIA terminology) A stepped structure that also tracks insurer-driven rate changes. See **Zurich Wealth Protection PDS** (variable age-stepped premium structure). The choice between stepped and level is a separate decision worth modelling against your expected holding period. A long-term policyholder may save with level premiums even though the up-front cost is higher. ## Where premium statements are documented Each panel PDS sets out premium calculation rules: - **AIA Priority Protection PDS** (Version 32, 9 November 2025), Section 7 (Premium structure) - **Zurich Wealth Protection PDS** (1 November 2025), variable age-stepped section - **TAL Accelerated Protection PDS** (12 December 2024), premium section - **OnePath OneCare PDS** (October 2025), How premiums are calculated - **ClearView ClearChoice PDS** (13 May 2024, update 5 June 2025) - **NEOS Protection PDS** (6 December 2024) - **Encompass Protection PDS** (26 September 2025) - **Acenda Insurance PDS** (27 September 2025) - **Futura Protection PDS** (1 October 2025) ## How the panel compares on premium For an identical cover structure, panel premiums can vary by 30-50% between the cheapest and most expensive insurer. The cheapest is not always the right pick because definitions, mental-illness handling, and occupation-class treatment differ (see the FAQ on comparing IP policies). Comparing 3-5 insurers across IMFL's panel for your specific structure is the practical approach. ## What is illustrative, not personal advice Any premium range cited here is illustrative. Your actual quote depends on your specific age, gender, occupation class, smoking status, health history, structure choices, and the insurer underwriting your cover. Use a licensed adviser to walk through the panel quotes side-by-side under general advice.

Can I receive partial benefits if I return to work part-time or in a reduced capacity?+

**Yes. Every panel insurer pays a 'partial disability' or 'partial benefit' when you return to work at reduced capacity earning less than your pre-disability income.** The benefit is calculated proportionally to your income loss. Partial benefits keep you supported while you rehabilitate. The exact formula and the minimum income-loss threshold vary by insurer. ## The standard formula The industry-standard calculation across all 9 panel insurers is: > (Pre-disability income minus current actual income) / pre-disability income, multiplied by your full monthly benefit. ## Per-insurer partial benefit references | Insurer | PDS section | Source | |---------|-------------|--------| | AIA | Section 5.1 / 5.1.2, Partial Disablement definition | AIA Priority Protection PDS Version 32, 9 November 2025 | | TAL | Section 2.6.1, Partially Unable to Work Benefit (worked example) | TAL Accelerated Protection PDS, 12 December 2024 | | Zurich | Income Protection section, Partial disability defined | Zurich Wealth Protection PDS, 1 November 2025 | | OnePath | Income Secure Cover, total and partial disability benefit | OnePath OneCare PDS, October 2025 | | ClearView | Income Protection Flex, disabled-part-of-the-month rule | ClearView ClearChoice PDS, 13 May 2024 (Update 5 June 2025) | | NEOS | Income Support Cover, partial benefit calculation | NEOS Protection PDS, 6 December 2024 | | Encompass | Income Protection Cover, partial benefit | Encompass Protection PDS, 26 September 2025 | | Acenda | Income Replacement Ratio formula | Acenda Insurance PDS, 27 September 2025 | | Futura | Partial disability definition, 80% regular hours test | Futura Protection PDS, 1 October 2025 | ## A worked example Pre-disability income: $10,000 per month. Full monthly benefit: $7,000. After returning to work part-time, you earn $4,000 per month. - Income loss = ($10,000 - $4,000) / $10,000 = 60%. - Partial benefit = 60% x $7,000 = **$4,200 per month**. Combined income (employment + partial benefit) is $8,200 per month, against the original $10,000. ## Common policy variations - **Minimum work-capacity threshold.** NEOS requires the insured to be 'working but not to their full capability for at least three consecutive months' before partial benefits begin (NEOS PDS). Other insurers do not impose this consecutive-month rule. - **Minimum income-loss threshold.** Some policies require a 20% or 25% income drop before partial benefits engage. Check the PDS. - **Duration cap.** Most policies pay partial benefits up to the same benefit-period cap as full benefits. A few cap the partial benefit at a shorter duration. - **Hours test.** Futura's Income Protection Cover applies an 80% of regular work-hours test (PDS). ### Why partial benefits matter Graduated return-to-work programmes are widely supported by treating doctors. Without partial benefits the insured would face an all-or-nothing choice: full claim with full benefit, or full return with zero support. Partial benefits allow you to rebuild work capacity while still receiving income. Ask your treating doctor to document partial capacity and specific limitations in the medical certificate that supports your claim. *General advice only. Confirm the formula, minimum threshold, and duration cap against the current PDS for any insurer you are considering.*

Can I hold Income Protection insurance inside my superannuation fund?+

**Yes. Most panel insurers offer Income Protection inside super under a super-trust structure.** Premiums come from your super balance, not your take-home pay. Both retail and super-held IP are bound by the same APRA 70% replacement cap. Super-held IP carries trade-offs: tighter SIS-aligned definitions, benefits paid first to the fund (not direct to you), and potential tax complications at withdrawal. The cash-flow advantage of paying from super has to be weighed against these. ## Where each panel insurer documents super availability | Insurer | Super-held IP product | PDS reference | |---------|----------------------|---------------| | **AIA** | Superannuation Income Protection Plan via AIA Insurance Superannuation Scheme No 2 | About this PDS, Section 1 (PDS 9 Nov 2025) | | **TAL** | Accelerated Protection via TAL Super or eligible retail super | Section 1.2.2 (PDS 12 Dec 2024) | | **Zurich** | Income Safeguard Super | Income protection (PDS 1 Nov 2025) | | **OnePath** | OneCare Super | Customer Care section (PDS Oct 2025) | | **ClearView** | ClearChoice Super (Business Expense Cover not available inside super) | (PDS 13 May 2024, Update 5 Jun 2025) | | **NEOS** | Income Support Cover with super-trust option | Section: Income Support Cover (PDS 6 Dec 2024) | | **Encompass** | SUPER / NON SUPER availability | Cover overview (PDS 26 Sep 2025) | | **Acenda** | SUPER / NON SUPER columns alongside benefits | (PDS 27 Sep 2025) | | **Futura** | SUPER / NON SUPER columns; Superannuation Contribution Option available | (PDS 1 Oct 2025) | ## How the SIS rules shape super-held IP IP held inside super is constrained by the Superannuation Industry (Supervision) Act 1993 and APRA's Prudential Standard SPS 250. Funds can only insure for conditions that line up with a SIS condition of release. For IP, that is the SIS *temporary incapacity* definition, which is generally tighter than the retail own-occupation test. In practice this means three things. - **Definition risk**: even if your retail-style policy would pay, the super trustee must satisfy the SIS temporary incapacity test before releasing benefits. - **Two-step assessment**: the insurer pays the trustee, then the trustee assesses condition of release and pays you. - **No own-occupation upgrade for permanent definitions**: SIS does not permit own-occupation TPD/permanent definitions inside super (this affects bundled TPD, not IP-only). ## Tax treatment Benefits from a super-held IP claim flow to the fund first, then to you. The tax position depends on the payment type and your age (general ATO position; cite ATO website *Insurance premiums - income protection* and ITAA 1997 s8-1). - Premiums paid from super: deducted by the trustee, not by you personally - Benefits paid as a regular income stream: typically taxed as ordinary income at your marginal rate - Permanent disability lump sums released early: more complex tax components; specialist advice required Outside super, IP premiums are generally deductible to you personally under ITAA 1997 s8-1 (ATO TR 95/35), and benefits are taxable as ordinary income. ## Common trade-offs vs retail IP ### Why people choose super-held IP - No impact on take-home pay; premiums come from super balance - Often included by default in employer or industry funds, requiring no extra application - Useful as a baseline layer if budget is tight ### Why people choose retail IP (held outside super) - Wider definitions of disability, including longer own-occupation periods - Direct benefit payment to you, no trustee assessment delay - More feature flexibility (specified injury benefits, super contribution add-on, indexation options) - Portability if you change funds or jobs ## What happens when you change funds or jobs IP inside super is tied to the specific fund. Rolling out usually cancels the cover, and the new fund's default cover may not match. Retail IP outside super is portable and continues regardless of employer. Many people use a combination: a baseline super-held layer plus a retail top-up to extend benefit period, tighten definitions, or add features. This is general information, not personal advice. The right structure depends on your income, debts, fund features, and tax position.

Are mental health conditions covered by Income Protection insurance?+

**Mental health conditions are covered under all 9 panel Income Protection policies as a sickness, subject to the same waiting and benefit periods as physical conditions.** No panel PDS imposes a blanket mental-health exclusion at the policy level. Specific underwriting exclusions may apply at application time if you have a personal mental health history. Mental illness, including depression, anxiety, post-traumatic stress disorder, and burnout, is the largest single category of IP claims in Australia by frequency. Insurers therefore underwrite mental-health history carefully at application. ## How mental health is treated at the policy level All 9 panel insurers treat mental illness as a 'sickness' under the IP contract. The same definition of 'totally disabled' and the same waiting and benefit periods apply. - **AIA Priority Protection** (Version 32, 9 November 2025): mental illness is covered as a sickness under IP CORE. The TPD lump-sum tests reference 'Mental Illness (severe and permanent)' as a separate matter. - **TAL Accelerated Protection** (12 December 2024): mental illness claims pay as sickness under the IP definition; the Permanent Incapacity Reset Benefit references 'Mental illness category' separately for TPD. - **Zurich Wealth Protection** (1 November 2025): 'mental health or behavioural condition' is recognised across claim categories. Claim management may include a treating psychiatrist. - **OnePath OneCare** (October 2025): mental illness covered as sickness under Income Secure Cover. - **ClearView ClearChoice** (13 May 2024, Update 5 June 2025): mental illness covered as sickness under Income Protection Flex. - **NEOS Protection** (6 December 2024): mental illness covered as sickness under Income Support Cover; 'formal neuropsychological testing' may be required. - **Encompass Protection** (26 September 2025): mental illness covered as sickness under Income Protection Cover. - **Acenda Insurance** (27 September 2025): mental illness covered as sickness under Income Protection. - **Futura Protection** (1 October 2025): mental illness covered as sickness under Income Protection Cover. ## Personal exclusions from underwriting The critical caveat is **personal underwriting exclusions**. If you have a documented mental health history at application, the insurer may apply a personal exclusion on your policy schedule. The exclusion is recorded in your contract documentation, not the PDS. Personal exclusions are negotiable across insurers because each underwriter views mental health history differently. If you have ever been treated for depression, anxiety, PTSD, an eating disorder, or another mental health condition, compare offers across multiple panel insurers. Differences in personal exclusions can be material. ## Benefit-period caps on mental health claims Some retail IP policies cap the benefit period payable for mental health claims at a shorter duration than the policy's stated maximum (commonly 2 years, even where the base benefit period is 5 years or to age 65). Whether your contract applies this cap depends on the insurer and the policy tier you selected. This is one of the most material differences between policy tiers. When comparing options, check the PDS for mental health benefit-period treatment under each contract you are considering. ### What the IP claim process looks like for mental health - Treating GP or psychologist completes a medical attendant's statement. - Treating psychiatrist may be required for severe presentations (Zurich refers). - Neuropsychological testing may be required for some claims (NEOS). - Insurer-paid Independent Medical Examination by a psychiatrist may be requested. - Treatment compliance (medication, therapy attendance) is typically a condition of ongoing payment. ### Practical guidance - Disclose any mental health history honestly and completely at application. - Keep treatment records, prescriptions, and specialist letters. - Engage with rehabilitation and return-to-work programs the insurer offers; refusal can suspend benefits. - If a personal exclusion is offered, ask the broker to seek alternative terms from other panel insurers before accepting. *General advice only. Mental health treatment of IP claims is an evolving area; confirm the current PDS wording and your policy schedule against any historic understanding.*

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General Advice Only

This is general advice only and does not take into account your individual circumstances.
Please read the Product Disclosure Statement (PDS) before making a decision.
Consider seeking personal advice from a licensed financial adviser.

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