Liability Insurance Australia :: Articles

DIY Review Checklist for your Income Protection Insurance

How can I review my income protection insurance plan effectively?

DIY Review Checklist for your Income Protection Insurance

⚠️The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

If you have an income protection insurance plan already - or are thinking about buying one, then you need to be aware that these policies require regular maintenance and careful scrutiny to ensure that they adequately meet your needs. Unfortunately, many people purchase income protection insurance policies only to find out about their shortcomings at claim time.
Whilst a regular review both of the level of income protection cover that you own and the price you are paying for it are both important, there are some other more critical issues that need to be addressed to ensure that the piece of mind that your income protection insurance policy brings you is not merely a false sense of security.
This does not suggest that your insurance agent or broker isn't looking out for your interests but, if you are unfortunate enough to have a claim on your income insurance policy, it is you that has to live with the consequences of the decisions you make. Possibly for the rest of your life!
Here's a quick list of things that you should be checking.
Insuring your most valuable asset
Image for Insuring your most valuable assetWhile many people would consider their home or their car to be their most valuable asset, it's your ability to earn an income that is most important in shaping your financial future. Statistically, two thirds of working Australians will suffer an injury or illness that will sideline them for 90 days or more. The majority of these people would not be able to pay their mortgage or meet car finance and other loan commitments without adequate income insurance.

a.) What do I have to do to qualify for a claim?

Seems like a simple enough question ... you have to be disabled ... but there is a substantial difference from one policy to the next as to what constitutes being disabled. Consequently, there are many, many circumstances where some policies will deem you disabled and others will not. Some have "income- based" definitions, others use "duties- based" definitions. Some have "own- occupation" disability definitions, others define disability as an incapacity to perform "own or any other" occupation.
It is therefore of utmost importance that you understand exactly how your policy defines the term "disabled" and whether it's the most appropriate in your financial and occupational circumstances.

b.) Does the policy provide adequately for longer term disabilities?

Some policies pay lifetime benefits and others cut out after one or two years.
Some policies index benefits to inflation in the event of a claim whilst others do not, resulting in the erosion of the buying- power of those benefits over time.

c.) How is the monthly benefit calculated?

It may be that the amount you insure is an "agreed value" but, in many cases, the amount you may receive when you claim may be limited by your earnings leading up to your claim.

d.) How long will I have to wait before I receive my first claim payment.

You may have a policy excess of 7, 14 or 30 days. Your policy should also specify the frequency of payments, e.g. weekly in arrears, monthly in arrears, etc.
For example, if a policy has a 30 day excess and pays monthly in arrears, you will need to wait at least 2 months for your first claim payment.

e.) How will the policy deal with partial disability?

Some policies require you to satisfy their definition of total disablement before being eligible for partial disability benefits - meaning that benefits during a recovery period may be forthcoming whilst no benefits would be payable for degenerative disorders such as disc disease and many illnesses.

f.) What if my circumstances change?

Where available, the policy of choice is one that is guaranteed renewable and non-cancelable by the insurer ... irrespective of any changes to your health, occupation, future claims or other factors.

g. Can the insurer cancel my policy?

If you are ever unfortunate enough to have an income insurance claim, it can become extremely difficult to find another policy, even many years after a full recovery. So you should demand a policy with continuity for the rest of your working life.
In closing, it should by now be apparent that ensuring you have the best income protection insurance for your money is not a hit-and-miss affair. The cost of getting it wrong can be devastating financially.
This check list is in no way comprehensive and, before entering into an insurance contract of any kind you should seek professional financial advice.

Published: Thursday, 12th Aug 2021
Author: 258


Business Insurance Articles

Decoding Public Liability Insurance: Is It a Must-Have for Your Australian Startup?
Decoding Public Liability Insurance: Is It a Must-Have for Your Australian Startup?
Public liability insurance is an integral safety net designed to protect businesses from the financial risks associated with lawsuits or claims. It provides coverage when a business is found legally responsible for personal injury to a third party or damage to their property. This form of insurance can significantly reduce the burden of legal fees, compensation claims, and other associated costs that may arise from unforeseen incidents. - read more
Public Liability Insurance for Events: What Organizers Need to Consider
Public Liability Insurance for Events: What Organizers Need to Consider
Public liability insurance is a type of coverage designed to protect businesses and individuals from the financial fallout associated with claims for injury or damage caused to third parties. It is particularly crucial for event organizers, who are responsible for ensuring the safety and security of attendees, vendors, and participants. - read more
The Smart Business Approach: How to Effectively Compare Public Liability Insurance Rates
The Smart Business Approach: How to Effectively Compare Public Liability Insurance Rates
Running a business comes with inherent financial risks. Whether you own a small café or a large construction company, unforeseen incidents can lead to significant financial losses. - read more
Insurance Essentials: Protecting Your Small Business with Public Liability Coverage
Insurance Essentials: Protecting Your Small Business with Public Liability Coverage
Running a small business in Australia comes with its own set of challenges and risks. One crucial aspect that should never be overlooked is insurance, particularly public liability insurance. The reason is simple: it offers essential protection against claims of property damage or personal injury caused by your business operations. - read more
Understanding the Key Factors Influencing Your Liability Insurance Premiums
Understanding the Key Factors Influencing Your Liability Insurance Premiums
Liability insurance is a form of coverage that protects businesses against claims resulting from injuries and damage to people or property. It provides crucial peace of mind, ensuring that your business is shielded from potentially devastating financial losses due to lawsuits or claims against it. - read more

Insurance News

CHU Enhances Strata Insurance Capacity for Larger Developments
CHU Enhances Strata Insurance Capacity for Larger Developments
21 Dec 2025: Paige Estritori
CHU, Australia's leading strata insurance underwriting agency, has significantly increased its capacity to underwrite individual strata risks, now offering coverage up to $690 million. This substantial rise from the previous limit of $300 million is a strategic response to the evolving landscape of strata developments, which are becoming larger and more complex. - read more
ICA Advocates for Strata Law Reforms to Mitigate Rising Insurance Costs in Victoria
ICA Advocates for Strata Law Reforms to Mitigate Rising Insurance Costs in Victoria
21 Dec 2025: Paige Estritori
The Insurance Council of Australia (ICA) has called for significant reforms to Victoria's strata legislation, citing a direct link between inadequate governance and escalating insurance premiums for residents. With approximately one in five Victorians living in strata-titled properties, the need for effective management and oversight has become increasingly critical. - read more
Significant Reductions in Australian Construction Insurance Premiums
Significant Reductions in Australian Construction Insurance Premiums
20 Dec 2025: Paige Estritori
The Australian construction insurance market has experienced a notable shift in 2025, with premiums decreasing across various lines due to intensified competition among insurers. According to Marsh's Construction Insurance Market Update 2025, the first half of the year saw average premium reductions ranging from 5% to 15%, marking a significant departure from the upward trend observed in 2024. - read more
Elevated Construction Costs Prompt Reassessment of Insurance Strategies
Elevated Construction Costs Prompt Reassessment of Insurance Strategies
20 Dec 2025: Paige Estritori
Australia's construction sector continues to grapple with elevated cost pressures, prompting builders to reassess their insurance and risk management strategies. Gallagher reports that overall construction costs have increased by over 30%, influenced by supply chain disruptions, inflation, and labour shortages. - read more
South Australia Strengthens Homeowner Insurance Amid Rising Builder Insolvencies
South Australia Strengthens Homeowner Insurance Amid Rising Builder Insolvencies
20 Dec 2025: Paige Estritori
The South Australian Government has taken decisive action to bolster homeowner protection in response to a surge in builder insolvencies. Effective from 1 October 2025, the maximum insurance payout for homeowners will increase from $150,000 to $250,000. This measure aims to provide greater financial security to homeowners left with incomplete or defective properties due to builder failures. - read more

Start Here !
Your free liability insurance quote comparison starts here!
Cover Amount:
Postcode:

All quotes are provided free and without obligation by a Specialist from our National Broker referral panel. See our Privacy Statement for more details.


Knowledgebase
Insurance Deductible:
That part of an insurance claim that must be paid by an insured person before the the balance is paid by the insurer.