Who can apply for income protection insurance?

For the policies that can be arranged directly through Choosi, any working Australian resident aged 18 to 59 can apply for income protection insurance. Some exclusions do apply, so you will need to review the Product Disclosure Statement of the policy you are interested in for further information.

How much income cover do I need?

You will need to assess the level of cover that you need, however you should consider what bills that you have coming in monthly (mortgage, loans, general living expenses etc...).   The policies available will only insure a proportion of your salary, with the maximum being 75% of your pre-tax salary.

Exactly what is covered under income protection?

Income protection insurance is designed to cover you financially if you are unable to work for an extended period of time due to an accident or serious illness. For full details of what is included with the cover you are interested in applying for you should read the Product Disclosure Statement.

Are my income protection payments tax deductible?

Generally for policies that can be arranged directly through Choosi, premiums are tax deductible, however as individual circumstances may differ, you should consult a professional tax adviser for advice regarding your particular situation.

How do you calculate income protection insurance premiums?

Insurance premiums are calculated based on the type and level of cover that you are applying for as well as your risk, insurers determine your risk based on the likelihood of you getting seriously ill or suffering an injury, and the higher your risk the higher your insurance premium is likely to be. The main factors taken into account when assessing risk for income protection insurance include age, health, smoking status and occupation.

How much income protection insurance cover is enough?

The amount of cover you need and apply for will be dependent on your needs and your personal circumstances. When calculating how much cover you need, you will need to consider how much money you will need to meet your day to day living expenses, service any debts and cover any recuperation costs. You will need to consider that the level of cover available to you will be dependent on your salary and as a general rule most policies will only provide cover up to 75% of your income, and there are likely to be maximum benefits payable, for example, $10,000 per month.

Can I take out cover on behalf of my partner?

No. If your partner is a homemaker, you can include your partner on your policy if a homemaker option is available, however they will need to verify their details in order for the application to be processed.

Can my partner take out cover for me?

No. If you work you will need to take out your own policy, however if you are a homemaker your partner may apply for cover and include you if a homemaker insurance option is available. However you will need to also verify your details in order for the application to be processed.

How does income benefit work?

Income benefit will pay you a monthly payment if you are unable to work for an extended period of time due to an accident or illness covered by your policy.  When you apply for income protection insurance you will need to nominate the amount you wish to be insured for and answer some health and lifestyle questions and you may then be provided with some quotes for insurance premiums.  Policies are also available to insure your partner as well.

Can I increase or decrease my level of cover?

Yes, if your circumstances change and you need to increase or decrease your level of cover you can apply to do this by simply contacting the insurer. For products directly available through Choosi, you can never increase your cover beyond 75% of your income, up to $10,000 a month.

What if I am employed on a part time or casual basis; can I get cover?

Yes, as long as you work at least 20 hours a week and you have held this position for at least 12 months, you will be able to apply for cover. Your income is generally determined on a pre-tax basis after all expenses associated with the generation of that income have been taken into account.

What if I am self-employed can I get cover?

Yes, as long as you have been self-employed for at least 12 months and work for a minimum of 20 hours per week, you will be able to apply for cover.

Are there any tax benefits for income cover?

Generally there are tax benefits for income cover as your premiums should be tax deductible.  However you should note that any income benefit you receive will be assessable for income tax purposes.  If in doubt you should consult your tax advisor.

When does the policy cover me from?

Your cover will generally start as soon as your application has been accepted by the insurer that you choose to take out your policy with.  Your first premium is deducted from the policy commencement date, which will be set out in the policy schedule.

When would my benefit payments start and how long would I receive them for?

When applying for your policy you will need to select a waiting period, this is typically either 30 days or 90 days and also a Benefit Period; 6 months, 1 year, 2 years or 5 years, depending on the insurer. If you become eligible for payments you will be paid in arrears, starting from the end of the waiting period, for either the period you are unable to work or for the period of your benefit payment.

Can I cover my partner who works on my policy?

You cannot include a working partner on your policy; they will need to take out their own individual policy.

Can I ask for additional benefits for rehabilitation and homemaker assistance?

Yes, you will need to read the policy summary details to find out what options are available, however as a guide, some insurance policies have the option of adding 'Rehabilitation Benefits' to help you recover, and 'Homemaker Insurance' to help take care of things at home while you rest and get better.

Do I need income protection insurance if I have life insurance?

Life insurance and income insurance cover you for two different purposes, so you will need to assess your needs but may wish to consider holding the two policies.   Life insurance covers you in the event of your death (or some may also cover terminal illness) and will make a payment to your family to help them cover bills and living expenses.  Income protection will cover you if you have an accident or fall ill and you are unable to work for an extended period, allowing you to recover.

What factors affect my premium?

Your premium is determined by a number of factors including:

  • Your occupation
  • Your age, gender and smoking status at the time of the application;
  • The Income Benefit (selected by you);
  • The Benefit Period (selected by you);
  • The Waiting Period (selected by you); and
  • Other factors such as your health, family history and participation in hazardous activities.

I consider my job high risk, can I still apply?

Yes, you can still apply, however it is up to the insurer to determine if your job is too high risk to insure. You should note that if you are accepted, you may have to pay higher premiums if your job is deemed risky by the insurer you are applying to.

Do I pay my premium if I am receiving the income benefit?

If you are receiving your income benefit payments in most cases you do not need to pay your premium until you return to work or until the maximum benefit period has been reached. 

At what age can I get cover?

Cover is generally available for people aged between 18 and 64.  Your age may determine which brands are available for you to apply for, for example if you are 61 years old you will not be eligible for Real Income Protection Insurance, however you will be eligible to apply for Guardian Income Protection Insurance.

What happens if I smoke

If you smoke you can still apply for cover; however this may affect the amount you pay for your insurance premium.

Can I cancel my policy?

Yes you may cancel your policy at any time.

What if I cancel my cover do I get any money back?

When you purchase your policy you have a cooling off period, and so long as you cancel within this time you will get a full refund of the premium that you paid.   For products directly available through Choosi, you cancel the policy after this period has expired, you will only be eligible for a refund if you have chosen the annual payment option, and this amount will be equivalent to the unused portion of your payment.

Important Note:

The answers above are to be used as a reference guide only and do not substitute or replace your insurance contract, the Product Disclosure Statement (PDS) or Certificate of Insurance.