Life Insurance

Income Protection: what’s covered and what’s not

31 January 2025

Income Protection insurance pays a monthly benefit for a set amount of time if you are unable to work due to an injury or illness. It can help replace a percentage of your monthly income. With Suncorp Income Protection, you can get cover up to $10,000 a month or 75% of your monthly income* from the past 12 months.

You can use your monthly benefit payment to help cover your bills while you are off work, so you can focus on recovery and getting back on your feet. If you are considering taking out Income Protection insurance, here are some handy things to know about how it works, what’s covered, and what’s not.

What Income Protection Covers

Income Protection insurance is designed to support you in case of serious illness or injury that results in you being unable to work and earn an income.

With Suncorp, illnesses covered can include:

cancer
heart conditions
other physical illnesses, and
mental health conditions^#

Injuries covered can include:

broken bones
partial or total paralysis

To be eligible to receive an income protection benefit, you will need to provide supporting medical information that confirms:

you’ve lost the capacity to perform your usual occupation due to illness or injury
your illness or injury was incurred after your cover began, and
you will be out of action for longer than the waiting period you chose when you took out your cover.

What Income Protection Does Not Cover

While all income protection policies are different, there are some conditions most insurers may not cover. Here are some of the most common exclusions:

Any intentional act of self-harm
Participating in criminal or illegal acts
Illness or injury resulting from alcohol use, including driving with a blood alcohol level that’s over the legal limit
Improper drug use, including illegal drugs and any drug use other than that prescribed by a medical practitioner
Normal pregnancy and childbirth

Before taking out a policy you should always check the Product Disclosure Statement and the policy terms and conditions for a full list of exclusions.

Some insurers may also have exclusions or limitations on pre-existing conditions. A pre-existing condition is any medical condition with symptoms you were already experiencing before you took out your cover. While you may still be able to take out income protection insurance cover with a pre-existing condition, you may find that:

the premium you pay may be higher
you are excluded from claiming for your pre-existing condition, although you can still claim for others, or
if you serve a qualifying period, you may be able to claim for your condition.

It’s important to disclose all relevant medical information when you apply for income protection, even if it costs a little more or places some limitations on your cover. Failing to disclose a pre-existing condition could result in a subsequent claim being rejected or a lower amount being paid out.

Income Protection insurance generally does not cover you for unemployment, voluntary redundancy or resignation. While being unemployed does affect your ability to earn an income, most income protection insurance is designed to offer disability income if you are unable to work due to illness or injury. It generally does not cover loss of income from other causes.

Understanding Policy Terms and Conditions

Here are some of the key terms you need to know when you are considering Income Protection.

Waiting period

This is the amount of time you agree to wait between lodging a claim and starting to receive a benefit payment. You choose your preferred waiting period when you take out your policy – different insurers offer different options. Suncorp offers a choice of 14, 28, 60 or 90 day waiting periods.

Generally, choosing a longer waiting period can help lower your premiums. When you are choosing a waiting period, it may help to consider how much savings you have and how much sick leave you are entitled to which may help tide you over temporarily.

It's also worth noting that most insurers pay the monthly benefit in arrears, that is, at the end of each month. This means that after your waiting period ends, you will wait another 4 weeks before you receive your first benefit payment.

Benefit period

This is the maximum amount of time you wish to receive income payment benefits. While different insurers offer different options, generally you can choose either a set period of time, or up to a particular age. Suncorp offers benefit periods of 6, 12 or 24 months or 5 years.

The length of your benefit period will affect your premiums – generally, the longer the benefit period, the more expensive your premiums will be.

How coverage affects your premiums

Your premiums will be calculated based on a range of factors including your age, health and occupation. The level of cover and features you choose will also affect your premiums. Generally, choosing:

a lower monthly benefit amount
a longer waiting period, and
a shorter benefit period

will help to reduce your premiums.

Always read the fine print

Before you take out any Income Protection insurance policy, it’s important to read the finer details. Check the Product Disclosure Statement and read the policy terms and conditions to understand what your policy will cover, how it works, and what exclusions are in place. If you are not sure about anything, ask the insurer.

How to Choose the Right Income Protection Policy

There are plenty of insurance providers out there offering income protection insurance, so how do you know which one to choose? Here are some factors to consider.

Occupation

What you do for a job affects how much you will pay for your cover – and in some cases, whether you can get cover at all. People who do physically risky jobs - such as miners, police officers, professional divers or roofers - may find it more difficult to get cover, or may pay more in premiums, than white collar workers who often sit at a desk all day.

Health

Many insurers reward customers who take care of their health with lower premiums or discounts. You can do this by:

being a non-smoker
staying physically active, and
getting regular health checks.

Lifestyle

While having an active lifestyle can boost your health, not all hobbies are treated in the same way by insurers. Activities including

rock climbing or abseiling
surfing or diving
horse riding, or
motor racing

may attract higher premiums due to the greater risk of serious injury.

Comparing different policies and providers

It’s important to remember that every insurer is different, and offers their own benefits, optional extras, inclusions and exclusions. That’s why it’s always a good idea to shop around before making a decision. Comparing different policies will help you:

understand your needs, and
tailor your cover to suit your needs and your budget.

Key points to remember about Income Protection insurance.

Pays a monthly benefit which can help replace a percentage of your monthly income if you are unable to work due to illness or injury.
What’s usually covered: a range of serious illnesses, including cancer, heart and mental health conditions; serious injuries impacting your capacity to perform your usual occupation.
What’s usually not covered: Any intentional act of self-harm, illegal acts, injury from alcohol or improper drug use, normal pregnancy and childbirth.
Income protection may not cover you for redundancy
You can generally reduce premiums by choosing a lower benefit amount, longer waiting period and shorter benefit period
Always check the PDS and the policy terms and conditions to make sure you understand what’s covered and what’s not.

^*Up to 75% of the gross (before tax is deducted) average earnings of the last 12 consecutive months’ prior to the start of the claim waiting period. Amount of cover is subject to underwriting at time of application.

^#Mental health related conditions subject to meeting health assessment criteria. 6 month qualifying period applies and no benefit is paid for mental health related conditions occurring in the qualifying period. Maximum claim benefit period of 2 years in total.

Suncorp Income Protection is here to help.

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SUNCORP LIFE INSURANCE

Suncorp Life Insurance products, other than in some circumstances the Redundancy Benefit, are issued by TAL Life Limited ABN 70 050 109 450 AFSL 237848 (TAL Life) which is part of the TAL Dai-ichi Life Australia Pty Limited ABN 97 150 070 483 group of companies (TAL). TAL companies are not part of the Suncorp Group. TAL Life uses the Suncorp brand under licence from the Suncorp Group. Redundancy Benefit provided on or before 31st March 2020 was issued by AAI Limited ABN 48 005 297 807 AFSL 230859 (AAI) which is part of the Suncorp Group. New Redundancy Benefit policies and renewals offered from 1st April 2020 are issued by TAL Life. The different entities of TAL and the Suncorp Group of companies are not responsible for, or liable in respect of, products and services provided by the other.

Any advice on this page in connection with the Life products is general in nature and is provided by Platform Ventures Pty Ltd ABN 35 626 745 177 AFS Representative Number 001266101 (PV). PV is part of the Suncorp Group and an authorised representative of TAL Direct Pty Limited ABN 39 084 666 017 AFSL 243260 (TAL Direct). General advice does not take into account your individual needs, objectives or financial situation. Before you decide to buy or to continue to hold a Life Product you must read the relevant Product Disclosure Statement. The Target Market Determination (TMD) for the product is also available.

TAL Life is proud to have adopted the Life Insurance Code of Practice (Code). The Code has been developed voluntarily by the Life Insurance industry to promote high standards of service to consumers, provide a benchmark of consistency within the industry, and establish a framework for professional behaviour and responsibilities.

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