What is income protection insurance? Everything you need to know

If you or your loved one can’t work in your regular role because of an injury or illness, an income protection insurance claim may help. If you have an income protection insurance policy and aren’t sure if you are eligible to claim, our experienced superannuation and disability insurance lawyers can help ensure you receive your entitlements.

Read on to find out what income protection insurance is, how it works, what it can cover and when you can make a claim.

What is income protection insurance?

As its name suggests, income protection insurance protects your income if you can’t work.

Depending on the terms of your policy, income protection insurance pays for part of the income you lose if you can’t work because you’re disabled due to injury or illness, no matter the cause.

Each income protection insurance policy is different and comes with fine print. You may have income protection insurance through:

• Your superannuation policy

• A separate policy

• Your union or membership of another organisation

• The terms of your mortgage, car loan or other loan

To find out if you do have income protection insurance, start by checking your policy’s product disclosure statement, your insurer’s website or get in touch with our experienced team.

We can work through your policy, identify any loopholes and help if your income protection claim has been rejected.

Do I need income protection insurance?

Income protection insurance can give you significant peace of mind if you’re temporarily disabled through injury or illness and can’t work. How much you’ll receive depends on the terms of your policy. Generally speaking, if your income protection insurance claim is successful, you could receive:

• For the first six months you can’t work, up to 90% of your pre-tax income

• For a specified period of time beyond six months, up to 70% of your pre-tax income

The higher the amount you could receive under your policy, the higher your premiums will be.

So, if you’re asking yourself ‘do I need income protection insurance?,’ it’s a question of peace of mind if you’re injured or become ill, and whether your household budget allows for your premiums to be paid while you’re unable to work.

Do you really need income protection insurance?

Income protection insurance can be an important consideration if:

• You have dependents who rely on your income

• You have debts that still need to be paid if you can't work (such as a mortgage or car loan)

• You’re self-employed (such as a small business owner) because you may not have any sick leave or annual leave

How does income protection insurance work?

If you’re wondering ‘can I claim income protection insurance?’, the answer is, you can if:

• You have an income protection policy

• Your injury or illness mean you can’t work in your regular job

The terms of each income protection insurance policy will be different from provider to provider. If you’re temporarily disabled from working due to an injury or illness, we can help you to understand what you can claim with your income protection insurance.

Taking out an income protection insurance policy

In Australia, you need to meet particular policy requirements of the insurer before you take out income protection insurance, which could include that you’re:

• An Australian citizen

• Aged within a certain range (for example, between 19 and 59)

• Employed or self-employed

• Working the minimum required hours per week (for example, 20 to 30 hours)

Do I need TPD and income protection insurance?

Claims under income protection insurance are also known as or TTD (total temporary disability) claims. Our experienced superannuation and insurance lawyers can help with your income protection insurance claim.

Does life insurance cover income protection?

Income protection insurance is different from life insurance.

Under a life insurance policy, your family or dependents will receive a lump sum payment if you’re diagnosed with a terminal illness or die.

Income protection insurance is to protect your income if you can’t work due to illness or injury.

When an income protection claim is successful, you receive monthly payments while you can’t work, up to:

• The time specified in your policy (for example, between two and five years), or

• The age specified in your policy (for example, 65 years)

When can I claim income protection insurance?

You can claim under your income protection policy for any injury or illness that stops you from working in your usual job. Your injury or illness doesn’t have to be work-related. It could include, for example:

• Cancer

• Chronic illness

• Heart attack

• Stroke

• Infection disease

An injury sustained:

• While playing sport

• At home

• In a motor vehicle accident

Diagnosed psychological conditions such as:

• Post-traumatic stress disorder (PTSD)

• Anxiety

• Depression

Can I claim income protection insurance and work cover?

It’s possible to claim under your income protection insurance policy while you’re receiving work cover payments. However, if your income protection claim is for your work-related injury or illness, any payments will be considered alongside what you’re already receiving in workers’ compensation.

This is a complicated area of law, but our experienced workers’ compensation and superannuation and disability insurance teams can help you navigate your claims.

Does income protection insurance cover loss of job?

Income protection insurance doesn’t cover you if you’re made redundant or otherwise lose your job.

How Shine Lawyers can help with your income protection claim

Our superannuation and disability insurance team have over 45 years of experience in successfully helping clients achieve their desired income protection insurance outcomes.

Our lawyers are experienced in the relevant laws applying to income protection insurance and interpreting the terms of your policy. The law in this area can be complex. That’s why we are dedicated to guiding you through each step in the process and ensure you understand your eligibility to claim.

Contact our experienced team today for an obligation-free chat about your injury or illness and its impact on your work situation or use our online claim tool to get started.

How much do we charge for income protection insurance claims?

At Shine, we’re committed to ensuring everyone has access to legal support and advice. We’ll do the legal work so you can focus on what’s more important – your recovery.

We offer our superannuation and disability insurance services on a No Win, No Fee* basis. You’ll only pay our legal fees if we’re successful in your claim.