Income protection insurance

Generally, yes, where the policy is held outside superannuation, because the premiums are treated as an expense incurred in earning your assessable income. Premiums paid through super are generally not deductible to you personally. Any benefits you are paid are generally assessable income and taxed accordingly. This is general information, so check your own position with your accountant or the ATO income protection page.

Generally, yes. Because income protection replaces your income, the monthly benefit is usually treated as assessable income and taxed like the earnings it replaces. The exact treatment depends on the policy structure and your circumstances, so confirm with your accountant or the ATO.

Generally, no. Standard income protection pays only when you cannot work due to illness or injury. Being made redundant or losing your job for economic reasons is not a covered event. Redundancy or involuntary unemployment cover is a separate, narrower product, often attached to a loan or mortgage.

Enough to cover your essential commitments, such as your mortgage, bills, and everyday living costs, without over-insuring above the benefit cap. Because cover is generally limited to about 70% of your income, the practical question is how much of that you need to keep your household running while you recover. An adviser can help you size it to your situation.

It depends on your age, occupation, health, the benefit amount, the waiting and benefit periods you choose, and whether you opt for stepped or level premiums. A shorter waiting period, a longer benefit period, and a higher benefit all increase the premium. Because the variables differ for everyone, the reliable way to know your cost is to compare quotes across insurers, which we do for you.

That depends on your circumstances, and we cannot give personal advice here. As a general guide, it tends to matter most if you rely on your income to meet commitments and do not have years of savings to fall back on, which describes most working households. It is especially worth considering if you are self-employed or lack generous employer sick-leave entitlements.

On many policies, yes. Mental health conditions such as anxiety and depression are among the common reasons claims are paid, and mental ill health drives around one in five income protection claims, according to the Council of Australian Life Insurers (2024). Cover and any exclusions vary between policies, so it is worth checking the wording, which we can do with you.

Often not automatically. Conditions you had or were aware of before applying are commonly excluded or loaded, and every application is assessed through underwriting. The outcome depends on the condition, the insurer, and your history. An adviser can help present your application well and find the insurer most likely to offer reasonable terms.