Income protection may pay a benefit when illness or injury prevents work under the policy’s disability definition. The benefit calculation, waiting period, benefit period and offsets need to be read together. It does not automatically replace an entire salary or cover unemployment.
The distinction that matters
A waiting period is the period before an eligible benefit starts, while a benefit period limits how long payments may continue. Cover through superannuation and a personally held policy can differ in eligibility, definitions and payment conditions.
What to check
- Check how pre-disability income is calculated.
- Compare waiting periods with accessible savings and leave.
- Review benefit duration, exclusions and offsets.
- Understand how occupation or work changes affect cover.
Example to discuss
A self-employed person with fluctuating revenue asks what income evidence is required and how business expenses are treated rather than assuming turnover is the insured personal income.
This is a hypothetical comparison, not a customer claim or a determination of cover.
Before replacing existing cover
Check the existing policy definitions and any benefits through superannuation. A new application can involve underwriting, different exclusions or changed terms. Do not assume a replacement is accepted because a quote has been issued. Ask the provider to explain the effect of other payments on any benefit and how a change in work or income should be reported.
Sources and further reading
General information only. The policy, schedule and applicable rules determine the actual position. For a personal decision, use an appropriately qualified adviser or the relevant provider.