Long-Term IP
Pays a monthly benefit until you return to work or reach your nominated retirement age. The most comprehensive form of income protection, providing the greatest security for long-term illness.
Income protection pays a regular monthly benefit if illness or injury stops you working, helping you maintain your lifestyle and meet your financial commitments until you can return to work or reach retirement.
Income protection is one of the most important but most misunderstood forms of cover. Understanding the key features helps you make an informed decision. Not sure what you need? Take our free 2-minute protection review.
The deferred period is the time between becoming unable to work and the policy beginning to pay benefits. Common deferred periods are 4, 8, 13, 26, and 52 weeks. A longer deferred period typically reduces the premium.
The benefit period is how long the policy will pay out for. Long-term policies pay until you return to work or reach a nominated age (typically retirement). Short-term policies pay for a limited period, often 1 or 2 years per claim.
Benefits are typically limited to a proportion of your pre-disability earnings, insurers set maximum limits to maintain an incentive to return to work. The exact proportion depends on the insurer and your situation.
Some policies offer the option to increase benefits in line with inflation, important for long-term claims where the real value of a fixed benefit would erode over time.
Important: Policies will not pay out if your inability to work does not meet the insurer's definition of incapacity. Benefits are typically limited to a proportion of your pre-disability earnings.
The definition of incapacity used in your policy is one of the most important factors to understand. It determines the circumstances under which you can claim.
Pays if you are unable to perform the specific duties of your own occupation, regardless of whether you could do a different job. The most comprehensive definition and typically most appropriate for professionals and skilled workers.
Pays if you are unable to perform work suited to your qualifications, training and experience. Less comprehensive than own occupation, the insurer may argue you could do a different role within your field.
Only pays if you are unable to perform any work at all. The most restrictive definition and the hardest to claim against. Generally not recommended for most working professionals.
Some policies, particularly those aimed at older applicants, assess incapacity based on the ability to perform basic daily activities rather than occupational duties.
We compare whole-of-market income protection policies to find the right structure for your circumstances.
Pays a monthly benefit until you return to work or reach your nominated retirement age. The most comprehensive form of income protection, providing the greatest security for long-term illness.
Pays a monthly benefit for a limited period, typically 1 or 2 years per claim. Lower premiums than long-term IP. Suitable as a safety net for those with other long-term financial resources.
Company-owned income protection for directors and key employees. Premiums paid by the employer. Learn more →
Self-employed individuals without employer sick pay have a particular need for income protection. We work with insurers who have specific products and underwriting for self-employed applicants.
A budget-focused short-term income protection product covering accident and sickness for a defined period. Less comprehensive than full IP but provides a meaningful level of cover at lower cost.
An add-on to your income protection policy that waives your premiums if you are unable to work. Ensures your cover remains in force even when you most need the financial relief.
Income protection benefits are typically limited to a proportion of your pre-disability earnings, commonly up to 60–70% of your gross income, though this varies by insurer. This ensures you retain an incentive to return to work. The benefit is usually paid as a monthly tax-free income (for personally owned policies).
The deferred period is the waiting time between becoming unable to work and your benefit starting to be paid. Common options are 4, 8, 13, 26, and 52 weeks. You should choose a deferred period that aligns with your employer's sick pay provision, your policy picks up when your employer's payments stop. The longer the deferred period, the lower the premium.
Own occupation pays if you cannot perform the specific duties of your own job, regardless of your ability to do other work. Any occupation only pays if you cannot do any work at all. Own occupation is significantly more favourable for claimants and is generally the recommended definition for working professionals.
Yes, income protection is arguably more important for the self-employed, who have no employer sick pay to fall back on. Some insurers have specific products designed for self-employed applicants. The way income is assessed (e.g. sole trader vs director drawing salary and dividends) can vary. We identify the most appropriate product for your working arrangement.
Income protection pays as a regular monthly income, not a lump sum. This distinguishes it from critical illness cover, which pays a single lump sum on diagnosis. The monthly income is designed to replace a proportion of your earnings and is typically paid directly to you, tax-free on a personally owned policy, for the duration of the claim or until you return to work.
Occasional updates on rates, products and guidance, straight to your inbox. Unsubscribe anytime.