How Does Income Protection Insurance Work?

Income protection insurance works by providing financial support if you're unable to work due to illness or injury. After purchasing a policy and paying regular premiums, there's typically a waiting period before benefits kick in. (As opposed to trauma insurance , where the benefit is paid on diagnosis). Once the waiting period is over, the insurance company pays a portion of your pre-disability income to help cover living expenses. The duration of benefits, return-to-work incentives, and tax can vary depending on the policy terms. We'll help you choose a policy that aligns with your needs and do annual reviews for any necessary adjustments.

The Income Protection Insurance Tax Deduction Explained

Generally, the premiums you pay for your income protection insurance policy are tax deductible. But here's a few reasons you may not be able to claim a deduction:

1. The policy is taken out through your super fund
2. The insurer pays you a sum following a successful claim
3. You cannot claim deductions for other life insurance premiums such as TPD , trauma and life cover .