Real Income Protection Insurance Q&A
To help you understand more about income protection insurance, we’ve answered the most common questions we get asked.
What is income protection insurance?
If you are unable to work because of an injury or sickness, income protection insurance can provide you with a regular monthly payment so you can continue paying your living expenses and bills without added financial stress.
With Real Income Protection Insurance, you could cover up to 70% of your pre-tax income, up to $15,000 per month.
What does income protection insurance cover?
If you are unable to work due to an injury or sickness, Real Income Protection Insurance covers up to 70% of your pre-tax income up to $15,000 a month, so you can focus on getting back on your feet without added financial stress.
As well as helping you cover everyday living expenses and pay mortgage or credit card repayments on time, in addition you could be reimbursed for some of your rehabilitation program or return to work costs. You could modify your house to make it more accommodating for your new circumstances, or your loved ones could receive a final expenses benefit to help them cover your funeral expenses if the worst happens while your cover is active.
Learn more about what income protection insurance covers.
Are income protection insurance premiums tax deductible?
Yes, according to the Australian Tax Office (ATO) you may be able claim the cost of your income protection insurance premiums against any loss of income. When considering the tax implications of Real Income Protection Insurance, always seek professional advice. Learn more about is income protection insurance tax deductible?
Are there any exclusions that apply to income protection insurance?
Yes, there may be some exclusions. No income benefit will be payable if the injury or sickness is caused directly or indirectly as a result of:
- an intentional self-inflicted act;
- attempted suicide;
- normal pregnancy, giving birth, miscarrying, or having a pregnancy terminated;
- war (declared or not) or war-like activity, or taking part in a riot or civil commotion; or
- engaging in any criminal activities or illegal acts.
Other exclusions may apply. Please read the Real Income Protection Insurance PDS for further details.
Do I have to keep paying my premiums while I am unable to work?
While we’re paying your income protection insurance income benefit, the premiums on your policy will be waived in accordance with your monthly claim payments until either you are back at work, or the maximum benefit period has been reached and any premium paid during the waiting period will be reimbursed.
Do I have to provide proof of my income to get income protection insurance?
We don’t ask for financial evidence during the application stage for Real Income Protection Insurance. However, if you make a claim you’ll need to provide satisfactory financial evidence of your income before you became unable to work.
Do I need to take a medical test to get income protection insurance?
Great news – you don’t need to take any medical or blood test to apply for Real Income Protection Insurance. We’ll simply ask you a series of questions over the phone about your duties at work and your health and lifestyle.
How does the income protection insurance benefit work?
If you are unable to work due to an injury or sickness that occurs during your cover period, an income protection insurance benefit could cover up to 70% of your pre-tax income up to $15,000 per month. To claim for your injury or sickness, you must be:
- Unable to perform the usual duties of the regular occupation you earn your source of income from; and
- Receiving regular care from a medical practitioner in relation to the injury or sickness you are claiming for; and
- Unable to earn your income and suffering a loss of income; and
- Unable to work for longer than your chosen waiting period; and
- Not working in your regular occupation or earning money from any other source.
How are income protection insurance premiums payable?
Your premium will be debited on your day of choice, either fortnightly, monthly or annually. You can pay either by direct debit from your bank account or by credit card, with the date of your first premium payment being set as your policy commencement date.
How do I apply for income protection insurance?
You can apply for Real Income Protection Insurance by simply calling us on 1300 385 792 or
requesting a quote.
How do I know what income benefit I will receive?
When you apply for income protection insurance, you could be covered for between $1,000 and $15,000 a month (this is your monthly amount insured), up to 70% of your total pre-tax monthly income. When you make a claim and provide proof of income before the injury or sickness occurred, we pay you either the monthly amount insured, or up to 70% of your monthly pre-tax income at the time you stopped working, minus any other disability payments you receive.
It is important to let us know when your monthly income changes, so we can adjust your premiums and your monthly benefit amount accordingly.
How long can I keep my income protection insurance?
As long as your premiums are paid on time, we will continue to renew your cover until either you cancel your policy or the policy anniversary date following your 65th birthday, whichever comes first.
How much income protection insurance can I apply for?
You can apply to cover up to 70% of your monthly pre-tax income, up to $15,000 per month.
How do I calculate my pre-tax income?
For the purposes of applying for insurance, your pre-tax income is the sum of all income earned after the deduction of all expenses incurred in producing that income, but before the deduction of income tax. Pre-tax income does not include passive forms of income such as rent and investment income.
In particular, if you are self-employed you should consider what expenses are necessarily incurred to generate your income as these must be deducted when determining your pre-tax income level.
How old do I have to be to apply for income protection insurance?
All Australian residents aged between 18 and 60 who work at least 15 hours per week are eligible to apply for Real Income Protection Insurance.
Does my job affect my income protection insurance premium?
Yes, your job could affect the premium you pay. With Real Income Protection Insurance, premiums are determined by several factors including the duties you perform as part of your work, as well as your age, smoking status, and more.
I am a smoker. Can I still be covered?
Yes, as a smoker you can still apply for income protection insurance.
If I am receiving medical benefits, will they affect my income protection insurance benefit?
Yes, if you receive any other disability payments during the claim period, this money will be taken into consideration when calculating the income benefit amount you could be paid.
Will I get anything back if I cancel my cover?
If you cancel your income protection insurance within the first 30 days of commencement and you haven’t made a claim during that time, we’ll give you a full refund of any premiums that have been paid.
If you cancel your policy after 30 days, and pay your premium fortnightly or monthly, you will not get anything back because this policy is not a savings plan. However, if you have chosen an annual payment option, we will refund you a pro rata of the unused portion.
I already have life insurance. Do I need income protection insurance as well?
Income protection insurance and life insurance are different, and can work together to provide financial security for you and your family.
Life insurance pays a benefit in the event of your death or diagnosis of a terminal illness and is designed to help you provide financial security for your family if the worst was to happen, while income protection insurance is designed to help replace a portion of your income if you are unable to work for an extended period of time due to an injury or sickness.
I have sick leave at work. How long should my waiting period be for Real Income Protection Insurance?
You can choose a waiting period of either 30 or 90 days on your income protection insurance policy.
Ideally, your income protection benefit should start as soon as your income is affected, however, everyone’s situation is different.
As a homemaker, I look after the family and am not on a salary. Can I take out cover?
To be eligible for Real Income Protection Insurance you must be earning an income and working at least 15 hours per week.
I play a competitive sport. Does this affect my application for income protection insurance?
Certain hazardous activities (including some sports) could affect your application for income protection insurance. When applying for cover, we will ask you a series of health and lifestyle questions which include your participation in any hazardous activities and we will let you know if your activities affect your application in any way.
Is Real Income Protection Insurance available to people who are self-employed?
Any Australian resident aged 18 to 60 working at least 15 hours a week can apply for Real Income Protection Insurance.
I work part time. Can I still get Real Income Protection Insurance?
Yes. As long as you are working at least 15 hours per week, you can apply for Real Income Protection Insurance.
What happens if I get sick or injured overseas?
Provided you are an Australian citizen or permanent resident living in Australia at the time of application, you’re covered anywhere in the world by Real Income Protection Insurance.
What happens if I return to work and then find I need more time to recover?
If your sickness or injury reoccurs within six months of your last income protection insurance benefit payment, we’ll resume paying your monthly benefit without the need for re-serving your waiting period, and we will pay until you have reached the balance of your benefit period.
If your sickness or injury is due to an unrelated cause, then a new waiting period and benefit period will apply.
When does my Real Income Protection Insurance policy begin?
Your cover starts immediately on our acceptance. Your first premium is due on the policy commencement date, which will be set out in your policy schedule.
When will the income benefit payments start and for how long will I receive them?
For Real Income Protection Insurance, the monthly income benefit payment is paid in arrears during the benefit period, with the first payment starting one month after the end of the waiting period you have chosen (either 30 or 90 days). Your income benefit payments will continue for every month that you are unable to work for the benefit period e.g. six months, one year, two years, or five years.
For example, if you choose a 30-day waiting period, your first payment would be 60 days after you were first eligible to claim (that is, the 30-day waiting period plus 30 days because claims are paid monthly in arrears).
Will my income protection insurance premiums go up?
Real Income Protection Insurance is a stepped premium policy which means that it will generally increase each year. To learn more about how premiums are structured, read the PDS.
Can I earn money while receiving my income protection benefit?
Your income benefit is only payable while you are not engaged in either your regular occupation or any other gainful occupation. However, passive income from investments or other sources generally won’t impact your income protection benefit payments.
What can you claim on income protection insurance?
Some of the things you can claim on your policy include cancer, heart disease and stroke, back injuries, mental illness, musculoskeletal injuries, neurological disorders, infectious disease, chronic illnesses, and more provided the injury or sickness occurs after the acceptance date of the policy and is disabling in your ability to work in your regular occupation, requires regular medical care and causes a loss of income.
While most people take out income protection insurance to help cover lost income, you may be able to claim some of your rehabilitation costs, including:
- an additional 50% of your income benefit to help cover the cost of your approved rehabilitation program, for up to 6 months, up to $3,000, or
- the cost of special equipment and workplace modifications designed to assist you to re-enter the workplace, up to 6 times the benefit amount.
Before taking out income protection insurance, always read your PDS so you know exactly what you can claim for.
Do you pay tax on income protection insurance?
Income protection insurance premiums can be tax deductible.
Because income protection insurance benefit payments are treated as ordinary income for tax purposes, you generally need to pay tax on them.
Refer to a professional to make sure you are receiving suitable advice for your specific situation.
Read more about if income protection insurance is tax deductible?
How long can you have income protection insurance payments for?
When taking out income protection insurance, you can apply for a benefit period of 6 months, 1 year, 2 years, or 5 years.
Can you get Centrelink payments while having an income protection insurance policy?
Yes, but any payments resulting from reduced work capacity may be taken into consideration when calculating your income benefit, and could reduce your monthly payments. If in doubt whether your Centrelink benefits will impact your income benefit, check with a financial advisor.
Does income protection insurance cover mental health?
If you are unable to work due to a mental health issue that occurs after you take out cover, you can claim loss of income due to a diagnosed mental health issue on your Real Income Protection Insurance policy. If you were diagnosed prior to applying for and taking out cover, mental health would be excluded as a reason for claiming due to it being a pre-existing condition.
When should you get income protection insurance?
Income protection insurance could be an important consideration as soon as you are earning an income and are responsible for your cost of living or bill payments, especially if you have dependents who rely on you, however every one’s situation is different.
You may wish to consider income protection insurance when:
- you start a new job;
- you buy a house;
- you start your own business, or
- you get married or have children.
If you are unsure whether you need income protection insurance, or how much cover you need, visit Do I need income protection? For more information or call our friendly team on 1300 385 792.
At what age does income protection insurance stop?
Your cover will end at the policy anniversary on, or following, your 65th birthday. This is because most of us at this age are more likely to rely on things like superannuation or other assets, and are less likely to be working and earning an income.
How much income protection insurance do I need?
The amount of income protection insurance you need will depend on your individual circumstances, and take into account such things as your income, everyday living expenses, and financial goals.
This amount should ideally be enough to cover essential expenses - your mortgage or rent, utility bills, food, etc – for the time you are unable to work, as well as help maintain a comfortable lifestyle.
Is income protection insurance worth it?
If you or your loved ones depend on your income to cover everyday expenses and maintain the lifestyle you’re all accustomed to, income protection insurance can give you much needed peace of mind.
If you are unable to work due to an injury or sickness, you could receive up to 70% of your pre-tax income, up to $15,000 per month, helping you focus on getting back on your feet without any added financial stress.
How much does income protection insurance cost?
The cost of your monthly income protection premiums will depend on several factors, including:
- your age;
- your sex at birth;
- the monthly insured amount you apply for;
- the benefit period you apply for;
- your chosen waiting period;
- health and lifestyle factors; and
- the duties you perform as part of your occupation.
Does income protection insurance cover losing your job?
Real Income Protection Insurance is designed to provide financial support if you are unable to work due to injury or sickness, and does not cover losing your job.
Do I need income protection insurance?
Everyone’s individual situation differs. Some of the things to consider when choosing whether to purchase cover can include:
If you are self-employed and don’t have access to sick-leave and paid time off, income protection insurance could provide financial security if you are unable to work due to injury or sickness. If you have dependents, income protection insurance could help make sure they are financially secure if you are unable to work.
If you have financial commitments, such as a mortgage, income protection insurance could help you continue to make repayments even if you are unable to work.
Income protection insurance could also be beneficial if you don’t have enough savings to cover your expenses while you are off work and not earning any income for several months or more.
If you are unsure whether you need income protection insurance, speak to your financial advisor.
Can I change my level of cover when I need to?
Absolutely! You can increase or decrease your level of cover at any time, subject to approval of course.
Can I cover my partner too?
It is not possible to cover your partner on your policy, however, as long as they are also working, they can apply for a separate income protection insurance policy or their own.
Who is the underwriter?
Real Income Protection Insurance is issued by:
Hannover Life Re of Australasia Ltd (Hannover)
ABN 37 062 395 484
Tower 1, Level 33
100 Barangaroo Avenue
Sydney NSW 2000
Hannover is a wholly owned subsidiary of Hannover Re and is part of the Hannover Re Group worldwide. Hannover Re is currently the third largest global life reinsurer and has a Standard and Poor's Insurer Financial Strength of AA- (Very Strong) and has maintained this rating for a number of years.
The life insurance business of Hannover has been operating in Australia since 1958, so you know you're backed by a company you can trust.
What if I have another question?
Simply email us at email@example.com or call our friendly team on 1300 385 792.
How do I make a claim?
You or your legal personal representative (if you are medically unable to) simply have to call us on 1300 307 297.
Email firstname.lastname@example.org to let us know that you will be lodging a claim.
A dedicated claims agent will be assigned to your claim, and will contact you to take you through the claims process.
Complete all forms provided by your claims agent or simply download the form.
Send the completed form along with all required documentation to:
PO Box 6728
Baulkham Hills NSW 2153
Once completed documents are received, we’ll assess the claim and pay, subject to approval, without unnecessary delay.
If you are unable to work beyond the period paid because of the same injury or sickness, your claim will undergo ongoing assessment until you are no longer injured or sick or it is the end of your benefit period.
When can I make a claim?
Claims should be made as soon as possible after the incident giving rise to the claim.
Visit our claims page for more information.
What documents do I need to provide?
Your dedicated claims specialist will provide you with a claim form as well as details of any other documents that may be required which will include:
- Proof of Identity
- Proof of income
Visit our claims page for more information
What is a certified copy?
A certified copy is a signed photocopy of an original document. You send the certified copy with your claim, which means you keep the original document. The certified copy can be signed by a Justice of the Peace, Accountant, Solicitor, Doctor, Bank Manager or Police Officer, and the person signing it must see both the original and the photocopy. The certified copy must include a statement “I certify that this is a true copy of the original document”, and the certifier must also include their full name, signature, date, registration number (if any) and qualification or occupation on each page of the photocopied documents. Failure to do so may result in a delay in the claim being processed.
How long will it take for my claim to be processed?
Once we receive all the documentation we have asked for, your claim will be submitted to Hannover (insurer) to be assessed. We will call you as soon as there is an update or within 10 business days of receiving your forms, and every 10 business days thereafter to keep you informed of how your claim is going.
If your claim is approved, payment will be made promptly. Sometimes assessment leads to a need for additional information. This may require you to provide the extra information, or we may seek it directly from your medical practitioner. In either case, we will consider any new information promptly and inform you of the outcome.
What is the ongoing assessment?
You’ll be asked to provide information updates each month so the Insurer can assess whether you still qualify for the income benefit. We will send you the progress claim form to be completed by you and your treating doctor.
How do the payments work?
You will receive a monthly payment. You can start to accrue payments once you have been unable to work for longer than 30 or 90 days, depending on the waiting period you have chosen. Payments are made at the end of the month and then will continue each month you are out of action up to 6 months, 1 year, 2 years, or 5 years depending on the benefit period you have in your policy cover.
How are the payments made?
The payments will be made directly to the bank account that you nominate on your claim form.
Do I have to provide proof of my income to get income protection insurance?
We don’t ask for any financial evidence during the application stage for Real Income Protection Insurance. However, if you make a claim you will need to provide satisfactory financial evidence of your pre-disability income.
Why do I need to provide my income tax returns?
When you make a claim, we may need certain documents like your income tax returns or payslips to calculate your pre-disability income. Your pre-disability income is your average monthly income for the 12 consecutive months immediately before the date of your sickness or injury. If your monthly income reduces by 15% or more in the 12 consecutive months immediately before the date of your injury or sickness compared to the previous 12 consecutive months, then your pre-disability income is the average monthly income in the 24 consecutive months immediately before your injury or sickness. The income benefit payable will be calculated as the lesser of either the monthly amount insured or up to 70% of your pre-disability income.
What happens if my claim is accepted?
Once your claim is accepted, your waiting period will start. When either the 30 or 90 days are over, your benefit period will start, and the first monthly income benefit payment will be made at the end of the first month. Income benefit payments will then be made every month in arrears until your benefit period ends or you are able to return to work, whichever is first.
How can I use the money I receive if I have to make a claim?
You can use the money you receive in any way you wish – to cover daily living expenses, pay your rent or mortgage, credit card and car repayments, or for any medical and rehabilitation expenses.