Income Protection Insurance — Gold Coast
Income protection is the most important personal insurance most people will ever hold — and the most commonly underestimated. If you cannot work due to illness or injury, your mortgage does not pause, your family’s living expenses do not stop, and your other financial commitments do not disappear. Income protection exists to make sure a health event does not also become a financial catastrophe.
Want to review your income protection?
Your initial consultation is free. We will assess your existing cover and tell you whether it is adequate — and what it would take to fix it if it is not.
How Income Protection Works
Income protection insurance — also called salary continuance — replaces a portion of your income if you are unable to work due to illness or injury. The benefit is paid monthly, typically up to 70% of your pre-disability income, and continues until you return to work, the benefit period expires, or you reach the policy’s maximum payment age.
Two key policy parameters determine when and for how long you receive benefits: the waiting period and the benefit period.
The waiting period is the time you must be continuously unable to work before benefits begin. Common options are 30, 60 or 90 days. A longer waiting period reduces the premium but means you need savings or other resources to fund the gap. Most people choose a waiting period that aligns with how long their employer would continue paying them and how long their savings would last.
The benefit period is how long benefits continue once the waiting period has expired. Options range from two years to age 65. For most people with ongoing financial commitments — a mortgage, family expenses, super contributions — a benefit period to age 65 is worth the additional premium cost. A two-year benefit period leaves you exposed to the financial consequences of a longer-term disability.
Agreed Value vs Indemnity Policies
Prior to 2021, income protection policies could be structured as either agreed value or indemnity. Agreed value policies paid the benefit amount agreed at the time the policy was issued, regardless of your actual income at the time of claim. This was valuable for people whose income fluctuated — business owners, contractors, commission-based workers — because it provided certainty.
Following APRA regulatory changes in 2021, agreed value policies are no longer available to new applicants. All new income protection policies are now indemnity-based — meaning the benefit is calculated based on your actual income in the period immediately before the claim, typically the 12 months prior.
If your income has dropped since you took out your policy — you have moved to part-time work, taken a lower-paying role, or your business income has declined — an indemnity policy may pay significantly less than you expect at claim time. If you hold an older agreed value policy, it is worth understanding exactly what you have before making any changes. Cancelling or altering an agreed value policy and replacing it with a new indemnity policy could result in substantially lower benefits if you ever need to claim.
Tax Treatment of Income Protection
Income protection premiums held outside superannuation are generally tax deductible for individuals. This makes income protection one of the more tax-efficient forms of personal insurance — the government is effectively subsidising part of the cost of protecting your income.
The tradeoff is that income protection benefits are assessable income when received. You pay tax on the monthly benefit as you would on your regular salary. This is factored into how GCFA structures your cover so you understand what you would actually receive net of tax at claim time, not just the gross benefit figure quoted in the policy.
Income Protection for the Self-Employed
Self-employed clients — sole traders, contractors, business owners — face a particularly acute income protection risk. There is no sick leave, no employer continuing to pay super during a period of disability, and often a business that depends on your personal involvement to keep operating. The financial consequences of being unable to work for six months or two years can be far more severe for a self-employed person than for an employee.
The challenge for self-employed clients is demonstrating pre-disability income, particularly where income fluctuates year to year or where business and personal income are intertwined through company or trust structures. GCFA has experience structuring income protection for business owners, sole traders and contractors in a way that accurately reflects your income and holds up at claim time.
Default Income Protection Inside Super
If you have income protection through your superannuation fund, it is worth understanding exactly what you have. Default super fund income protection typically has significant limitations compared to a properly structured retail policy. Benefit periods are commonly limited to two years rather than to age 65. Waiting periods may be longer than you would choose. The benefit amount may not reflect your actual income. And some super funds have restrictions on who can access the default income protection cover.
GCFA reviews your existing super fund income protection as part of any insurance review. We do not automatically recommend replacing it — in some cases the super fund cover is adequate or better than the retail alternative for the price. But we make that assessment with full information rather than assumptions.
Frequently Asked Questions
Is income protection tax deductible?
Yes — premiums for income protection held outside superannuation are generally tax deductible for individuals. This reduces the effective cost of the cover. Benefits received are assessable income and taxed accordingly. GCFA will explain the net cost and net benefit position for your specific situation.
How long does an income protection claim take to be assessed?
Initial assessment typically takes 4 to 12 weeks from lodgement, depending on the insurer and the complexity of your medical situation. The waiting period in your policy must also expire before payments begin. GCFA manages the claims process on your behalf. See our Claim Timeframes page for more detail.
Can I claim income protection while my TPD claim is being assessed?
Yes, in most cases. Income protection and TPD are separate benefits that can run concurrently. If you are unable to work, income protection payments can begin once the waiting period expires, regardless of whether a TPD claim is still being assessed. TPD assessments can take 3 to 18 months — do not wait for a TPD outcome before accessing income protection.
What if my income protection was declined on health grounds?
A declined application does not necessarily mean you cannot get cover. GCFA can review the decision and, where grounds exist, seek a review or approach alternative insurers who may be more willing to offer terms for your specific condition. Some insurers specialise in non-standard health risks.
What is the difference between the waiting period and the benefit period?
The waiting period is how long you must be unable to work before payments begin — typically 30, 60 or 90 days. The benefit period is how long payments continue once they start — from two years to age 65. A longer waiting period reduces your premium; a longer benefit period increases it but provides protection for extended or permanent disability.
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