Compare Income Protection Insurance in Australia

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20 live offers compared from 15 providers, from A$4.70 /month. Updated daily.

What is income protection insurance in Australia?

Income protection insurance replaces part of your income if illness or injury stops you working. It typically pays a monthly benefit of up to around 70% of your regular earnings after a waiting period, continuing for a set benefit period that can run to a specified age such as 65. It protects your ability to earn, which for most working households is their single most valuable asset and the foundation of every other financial commitment.

How the Australian market works

Income protection is offered by specialist life insurers and can be held personally or, in some forms, through superannuation. Following changes by APRA to improve the long-term sustainability of the product, policies now more commonly offer indemnity terms based on your income at the time of claim rather than an agreed value set at application, and stricter rules apply to how benefits are structured. Premiums are generally tax-deductible when the policy is held outside super in your own name.

Benefits of income protection

Ongoing income — It provides a regular monthly benefit while you cannot work, helping cover the mortgage, bills and living costs during recovery.

Long benefit periods — Cover can continue for years or to a set age, protecting against a serious illness or injury that keeps you off work long term.

Tax-deductible premiums — Premiums for policies held outside super are generally tax-deductible, which reduces the effective after-tax cost of the cover.

How to choose a policy

Choose a waiting period you can bridge with your savings or sick leave — a longer wait lowers the premium — and a benefit period long enough to protect you through a serious illness. Compare indemnity versus any agreed-value terms, the precise definition of disability used, and whether the policy is guaranteed renewable so it cannot be cancelled. Consider stepped versus level premiums and whether to hold the cover inside or outside super.

Leading providers in Australia

The comparison features TAL Life, AIA Australia, MLC Life, Zurich Life Australia, BT Financial Group, OnePath, AMP Life and MetLife Australia. These specialist life insurers underwrite income protection directly and through super funds and financial advisers. Because policy definitions, waiting periods and claim terms vary significantly between insurers, the choice often hinges on the fine detail of the cover and claims reputation as much as on the premium alone.

What it costs

Premiums depend on your income, occupation, age, health, chosen waiting period and benefit period. The indicative figure in this comparison of around 4.7 reflects a representative pricing input rather than a fixed dollar cost; riskier manual occupations and longer benefit periods raise the premium. Stepped premiums increase with age, while extending the waiting period is one of the most effective ways to lower the ongoing cost of cover. Shortening the benefit period, for example to two or five years rather than to age 65, also reduces the premium, though it leaves you less protected against a permanently disabling condition.

Protections and regulation

Income protection is prudentially regulated by APRA and conduct-regulated by ASIC, with disputes handled by AFCA. The Life Insurance Code of Practice governs claims handling and communication. Full and accurate disclosure of your health, income and occupation at application is essential, as non-disclosure can lead to a reduced or denied claim. Benefits paid from a policy held outside super are generally treated as assessable income for tax.

Common questions

How much will it pay? — Typically up to around 70% of your regular income, paid as a monthly benefit after your chosen waiting period ends.

Inside or outside super? — Holding it in super preserves your cash flow since premiums come from your balance, but cover held outside super can be broader and its premiums are usually tax-deductible.

Income Protection Insurance in Australia — FAQ