Income Protection Insurance FAQs

Income Protection Insurance gives you a regular stream of income to stay on top of bills if you’re unable to work due to illness or injury. Insuranceline Income Protection Insurance provides a payout of up to 75% of your monthly income, up to $10,000 per month, if illness or injury leaves you unable to work. It is a way to help protect yourself and your dependants from financial stress. You can choose how to use your payment—to help with rent or mortgage repayments, car repayments, household bills, credit card payments or even the basics like food and clothing. 

We understand that insurance terms can be hard to get your head around. Visit our insurance glossary for an easy guide to these terms.

The future is unpredictable, but you can be prepared and plan for the unexpected, such as a sudden halt to your income. So, it doesn’t matter if you’re young and healthy, starting a family, or an empty-nester, Income Protection can help keep regular money coming in if you can’t work for an extended period due to serious illness or injury. It can help you and your family to maintain the lifestyle you’re used to while you focus on recovering.

Debilitating illness and injury can strike suddenly and without warning. If you don’t have enough sick leave or cash savings, the bills can soon pile up, assets you worked hard for may have to be sold, and the standard of living you've enjoyed could be lost—maybe for just weeks or months, maybe permanently. Insuring yourself can help safeguard your financial position and bring peace of mind.

If your job is the main source of income, or if you’re the family’s main breadwinner, then taking out Income Protection could be one of the best financial decisions you can make.

• Unlike WorkCover, Income Protection Insurance covers you 24/7, not just while you’re working or travelling to and from work
• The premiums for Income Protection Insurance are usually tax-deductible
• We can pay you up to 75% of your income for up to 5 years (claims for Mental Health-Related Conditions are capped at 2 years in total)
• Get regular payments of up to $10,000 per month
• Pay premiums fortnightly or monthly, whichever suits your pay cycle
• You can also pay annually and receive a discount.

The Claim Waiting Period is the amount of time after a Sickness or Injury occurs that you must wait before your payments commence. You can choose a Claim Waiting Period of 14, 28, 60 or 90 days for Sickness and Injury claims. The longer the Claim Waiting Period you choose, the lower the cost of your cover. If you are off work and make a claim, you will not receive any payments for the duration of your Claim Waiting Period. Once you’ve been continuously off work for the duration of your Claim Waiting Period, you’ll start receiving payments a month later, as they’re paid a month in arrears. If you have a Claim Waiting Period of 14 or 28 days and you have the Accident Benefit Option as part of your policy, your claim may be back dated to the date your Accident or Injury occurred and the Claim Waiting Period will be waived. Terms and conditions apply, read the PDS for more information.

Cover is available for all Australian or New Zealand citizens or Australian permanent residents, currently residing in Australia, aged 18 to 60.

The Claim Payout Period or Benefit Period is the maximum amount of time you can receive payments for when you are unable to work due to illness or injury. You can choose a Claim Payout Period of 6 months, 1, 2 or 5 years. Benefit payments will continue until the Claim Payout Period you’ve chosen runs out, or you’re able to return to work. There is a maximum 2-year cap on the Benefit Period for claims on Mental Health-Related Conditions.

According to the ATO, you can usually claim income protection premiums that you pay, as a tax deduction, if you take out cover outside of your superannuation. If you have taken out the policy within your superannuation, then you may not be eligible to claim your premiums as a tax deduction.

As long as your premiums are paid when due, your Sickness and Injury Cover will continue right up until the renewal date after you turn 65. On that date, your policy will end.

You must give us the information we request when you apply for income protection and answer all our questions honestly and completely. That’s because if you do make a claim, we’ll need to check your medical, employment and financial records. If it turns out you didn’t tell us something important, we may have to refuse your claim or reduce your benefit.

Regardless of your life stage, Income Protection can be beneficial if you are working and earning and income, and would need some of your income to continue if you were to unexpectedly find yourself unable to work due to illness or injury.

• Families: It can help ease the financial pressure of providing for children, whether that’s feeding and clothing them, education expenses or paying for childcare.
• Singles and couples without kids: It can help keep the day-to-day expenses and bills at bay and help pay for your rent or mortgage.

Premiums generally increase with age each year at the anniversary of your insurance, and if you increase cover. Unless otherwise requested, premiums also increase each year for the automatic adjustment for inflation (your level of cover will also increase).

Premiums will also increase if we change our underlying premium rates. The underlying premium rates are not guaranteed, but once your Policy has started, you will never be singled out for a premium increase. Any increase will be applied to all policyholders to whom the same premium rate table applies, with 30 days’ written notice.

When you take out Income Protection, we give you a 30-day money back guarantee—so if you cancel your policy in the first 30 days, we’ll give you a complete refund.

After that, there are no refunds. Your policy simply gives you Income Protection Insurance cover—it is not a savings plan.

Accident Benefit Option backdates the accrual of benefits to the start of the 14- or 28-day Claim Waiting Period if you’re unable to work due to Accidental Injury. This benefit is not available on policies with a 60 or 90-day Claim Waiting Period.

If you think there will be a problem with paying your premiums because your budget has run over that month or you're unsure you'll have the money, please give us a call on 1300 880 750 at least 3 business days before your payment is due, so that we can try to help you with an alternative payment arrangement.

You will be given a dedicated Claims Manager. He or she will personally oversee your case and help you work through the details of your claim.

You can contact your dedicated Claims Manager while you’re settling your claim. They will explain anything that is not covered here or talk through any concerns you might have.

Your monthly payouts are based upon either your cover amount, or 75% of your pre-claim monthly income—we’ll pay you whatever amount is lower.

Generally, we calculate monthly income as a before-tax average personal income over the last 12 months before you became sick or injured. If you’re self-employed, we’ll deduct business expenses to calculate this amount.

We may reduce your payouts if you receive other payments while you’re not working—for example, a payout from another Income Protection policy, workers’ compensation or social security. If these extra payments plus your cover payments add up to more than 75% of your pre-claim monthly income, we’ll reduce your payouts.

Remember that your monthly payouts are generally assessable as income for tax.

You can insure up to 75% of your income, with a maximum payout of $10,000 per month and you can choose a Claim Payout Period of 6 months, 1, 2 or 5 years. The Claim Payout Period is limited to 2 years in total for Mental Health-Related Conditions.

Always consider how cover exclusions and restrictions may affect you if you need to claim. As with all insurance policies there are some things that are excluded.
For more details about what isn’t covered, see the Combined Product Disclosure Statement (PDS) & Financial Services Guide (FSG).

Your Policy ends when the earliest of the following events occurs:

• the Policy anniversary immediately following the Life Insured’s 65th birthday;
• the death of the Life Insured;
• your Policy is cancelled due to non payment of premiums or you making a fraudulent claim;
• the date we receive a request from the Policy Owner to cancel the Policy; or
• your Policy is avoided due to you making a misrepresentation at the time of application.

According to the ATO, your monthly payouts that you receive are assessable as income for tax.