Whilst it may not necessarily be suitable for everyone, direct income protection insurance can go a long way towards providing financial peace of mind, particularly for people who work in labour-intensive occupations or who have dependents.
However, not all income protection insurance policies are created equal. An expensive policy without the coverage or other features to justify its price tag is a recipe for poor value, but sometimes it can be hard to decipher a product blurb or Product Disclosure Statement (PDS).
That’s why Canstar has crunched the numbers on 16 different products from 14 providers to reveal direct income protection policies that offer outstanding value to consumers in 2019.
Canstar’s Direct Income Protection Award uses a sophisticated and unique ratings methodology that compares direct income protection policies on both cost and features.
And this year, NobleOak and Virgin Money (listed below in alphabetical order) remained above the rest to win the Outstanding Value award for Direct Income Protection – marking the third year in a row both providers have won the award.
It is also NobleOak’s fourth consecutive win.
On average, both providers’ monthly premiums were 25% ($62.31) cheaper than the market average.
Canstar’s research showed that the winners also outperformed the market in terms of policy features, including claims processes and customer support.
This year NobleOak got the nod from Canstar Research for its competitive premiums and its market-leading features offerings.
This is NobleOak’s third year in a row to receive a 5-Star Rating across all 80 consumer profiles.
According to Canstar Research, NobleOak’s premiums were consistently well below the market average, and it was a price leader across almost all profiles.
When it came to features, Canstar Research was particularly impressed by the fact that the insurer’s policies allow you to return to work within the waiting period (for a maximum of five days per week), offer a partial disability benefit, and cover consumers up to the age of 65.
NobleOak’s maximum monthly benefit of $25,000 was also recognised, as it was more than double the market average. Its list of exclusions was also relatively short compared to other providers.
The following table displays a snapshot of NobleOak’s direct income protection insurance products, based on a 30-39 year old male working in a trades and services occupation, who is not a smoker. Before committing to any particular policy, check upfront with your provider and read the PDS to confirm whether it meets your needs.
Virgin Money’s Income Protection Tailored product once again retained its award, on the back of its strong pricing proposition and features offerings. According to Canstar Research, Virgin Money both offered outstanding value on premiums and outperformed the market on features.
Virgin Money also impressed Canstar Research with its comprehensive application and claim processes, which included a four-day claim process and 12 hours of phone support, five days a week.
This insurer stood out from most of the pack when it came to policy features such as redundancy cover for up to three months and cover for a list of specified illnesses and injuries such as fractures, burns, loss of hand, foot or sight, cancer, stroke and heart attack.
Please note: Virgin Money Australia stopped offering new income protection quotes on 26 March 2021. New policies were no longer offered from 1 April 2021.
How is the Canstar Direct Income Protection Award calculated?
Direct income protection policies included in the Canstar Direct Income Protection Star Ratings and Awards are assessed across 80 consumer profiles considering age, occupational category, gender and smoking status. A Star Rating is assigned to each profile.
To be eligible for evaluation in Canstar’s Direct Income Protection Star Ratings and Award, a policy must meet the following criteria:
- Cover must be for sickness and accident (i.e. not accident-only cover)
- The provider must have existed in the market for 12 months or longer
- It must not be restricted solely to members of a specific organisation
- It must be available directly to the consumer without an intermediary (e.g. a financial planner)
- For comparison purposes it must offer a 28 or 30 day waiting period and a 2 year benefit period
- Quotes must be available:
- Directly from the provider, online, or from rates in the Product Disclosure Statement
- At all coverage amounts, and for all occupations Canstar considers