Income protection cover is a type of insurance that can help while you’re not earning an income. It can cover you if you’re unable to work because of an illness or injury. This means you can focus on your recovery and return to work if you’re able to.
Key points:
- Income protection cover can pay you a monthly benefit if you’re unable to work because of an illness or injury.
- Income protection cover can only be fixed cover.
- When you apply for income protection cover you will choose:
- an amount you want to get paid, within limits
- a waiting period
- a benefit period.
- One way to apply for income protection, if you don’t already have it, is through IP Express. If you apply online and the insurer accepts your application, we’ll tell you immediately.
How it works
Income protection cover makes monthly payments to you. It can replace part of your pre-disability income. You may be eligible if you’re disabled due to illness or injury.
Income protection cover is for a fixed dollar amount. You apply to be insured for an amount between 15% and 87% of your normal monthly income. If you make a successful claim, the insurer will work out your benefit by looking at:
- your amount insured
- your pre-disability income
- other disability payments because of your illness or injury, and
- the policy maximums.
Please refer to the relevant Insurance Handbook for examples of claim calculations.
Why you might need income protection cover?
If your income is suddenly impacted because of illness or injury, you might need help paying your living expenses.
You might need income protection cover if you:
- have a mortgage or other debts
- are self-employed or own a small business and don’t get paid sick leave
- have a family to support
- don’t have enough savings to cover your expenses.
Why you might need to review your cover?
If you already have Income Protection cover, we recommend that you regularly review your cover to make sure it keeps up with any salary increases you receive. You can apply for higher cover if you need to.
Who can have income protection cover?
You can apply for income protection cover if you have money in your account and are:
- an Australian resident
- at least 15 but less than 65
- employed for at least 15 hours per week
- at work on the date you apply.
You can refer to the relevant Insurance Handbook for more detail about applying for cover
Applying for income protection cover
When you apply for income protection you will choose:
- an amount you want to be paid. This must be between 15% and 87% of your normal monthly income and a limit of $40,000 per month applies.
- a waiting period. This is how long you’ll need to wait before you start getting paid after you become disabled. It’s important to know you won’t receive any payments for the waiting period.
- a benefit period. This is the maximum amount of time payments to you can continue while you’re disabled.
What benefit periods can I choose?
When you apply for income protection cover, you can choose a benefit period of either, 2 years, 5 years, or to age 65. While you are disabled, this is the maximum period of time you will get an income protection benefit paid to you. Depending on your circumstance, it may be less.
Your waiting period options below, depend on the benefit period you choose.
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Income Protection application options
You can apply for income protection cover at any time. It can be obtained in a few different ways:
- as part of an application for Basic Plus Cover
- through IP Express
- tailored income protection with full underwriting. You can learn more about underwriting here
You can refer to the relevant Insurance Handbook for more detail about these options.
Income protection cover as part of Basic Plus Cover
If you don’t have income protection cover you may be able to apply for it as part of Basic Plus Cover. This is a quick way to get income protection cover by answering only a few questions about your employment, health and lifestyle.
Income protection cover as part of Basic Plus Cover is subject to limited waiting and benefit periods. Learn more about Basic Plus Cover in the Insurance Handbook.
Get more options with IP Express
If you don’t already have income protection cover, another way you can apply for it is through IP Express. You can do this in your Member Online account. This is a simple way to get income protection cover.
If you apply online, we’ll let you know immediately if your application has been accepted.
You can learn more about IP Express in the relevant Insurance Handbook.
Tailored income protection cover with full underwriting
You can apply for income protection cover with full underwriting. This allows you to tailor your cover to your needs.
With full underwriting, you’ll be asked several questions, including some about your:
- employment
- health and lifestyle
- medical history
- pastimes and current and past insurance.
The insurer will decide:
- if they can offer any cover
- the cost of cover
- if any special conditions will be applied.
Work out how much cover you need, and how much it will cost with our insurance calculator.
We’ll take your insurance fees out of your super balance. The cost of your cover is known as an insurance premium. The premium is based on several factors:
- your age
- your cover type and amount
- your insurance category
- any premium loadings the insurer applies.
For Income Protection cover, we’ll also take the following into account:
- your waiting period
- your benefit period.
In addition to your insurance premiums, we deduct an insurance administration fee. This fee is $1.85 per month and helps cover the cost of managing your insurance.
If you become unwell or injured and can’t work, you can make a claim in a few simple steps. We’ll assign a case manager to you to help you through the process from start to finish.
You might receive other disability income because of your illness or injury. This could include:
- government disability support programs
- motor accident insurance
- workers' compensation.
Your income protection benefit may be reduced as a result of those payments.
You can apply to change your existing income protection cover at any time. This includes:
- reducing or increasing your cover amount. This must be between 15% and 87% of your normal monthly income. A maximum cover limit of $40,000 per month applies
- increasing the waiting period
- reducing the benefit period.
Your insurance category is important. If you’re in a higher risk category than your work requires, you might be paying more for your cover than you should.
If your insurance category is changed, it applies across all your types of cover. We’ll adjust the cost of your cover from the date the insurer approves the change.
If you apply for a change of insurance category there are three possible outcomes. The insurer may decide that:
- your existing insurance category is correct and shouldn’t change
- you should have a lower risk insurance category. This would decrease the cost of your cover
- you should have a higher risk insurance category. This would increase the cost of your cover.
- Income protection benefit payments are taxed as income. Tax may be deducted from your benefit before it is paid to you.
- If you are receiving other disability payments because of your illness or injury, your income protection benefit may be reduced. These may include:
- workers' compensation payments
- disability income benefits from the government.
Underwriting is the process an insurer takes to assess an insurance application. This is how they decide if they can offer any cover, the cost of cover, and if any special conditions will be applied.
Insurance is underwritten by our insurer.
The insurer's decision is based on things such as the applicant’s:
- type and level of cover applied for
- personal medical history
- lifestyle information
- occupation.
Underwriting may result in the insurer:
- applying standard premiums rates
- applying a premium loading, which means the insurance would cost more
- excluding some conditions from cover
- deferring an application
- denying the cover due to unacceptable high risk.
Scroll table horizontally on mobile
| Type of insurance | What it’s for | How it’s paid by the insurer |
|---|---|---|
| Death cover | If you become terminally ill or die. | A lump sum into your super. |
| Total and permanent disablement cover | If you become disabled due to an illness or injury and are unlikely to ever work again. | A lump sum into your super. |
| Income protection cover | If you become disabled due to an illness or injury and cannot work for a long period of time. |
Paid to you as regular monthly payments for a maximum period of time (example, after a 60 day waiting period for up to a 5 year benefit period) whilst you are disabled and unable to work. |
If you suffer an injury or illness:
- income protection cover pays you a regular monthly income, for a fixed period of time whilst you are disabled.
- total and permanent disablement cover can provide a lump sum payment if you are unlikely ever to be able to work again.
You can find out what insurance you have by:
- logging into your Member Online account
- logging into your Aware Super app
- clicking on the insurance tab.
Related information
- Calculate your insurance
- Types of insurance
- How much insurance you need
- Making an insurance claim
- Total and permanent disablement cover
- Death cover
Related documents
Where to next?
Calculate your insurance needs
Our insurance calculator can provide an estimate for how much you need and what it will cost. Simply answer a few questions such as your age, salary, number of dependants and expenses.
Check your insurance
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Transfer insurance to Aware Super
If you have insurance somewhere else, you can apply to transfer it to us. This means you could save money and maintain your existing cover.