What Does Income Protection Insurance Cost in 2018?

What does direct income protection cost, and how can your occupation, age, gender, and lifestyle choices affect your insurance premiums?

What affects the cost of income protection?

The cost of income protection is influenced by a number of factors, including age, gender, smoking status, and occupation. The cost associated with each factor is typically based on the type of occupation, with those in more manual occupations generally at greater risk of illness or injury.

The best thing about the premiums for income protection held outside of superannuation is that they are generally tax deductible. Of course, individual circumstances can be different, so seek professional taxation advice if in doubt about your situation. Find out more about the tax deductibility of income protection premiums here.

Looking for an income protection policy? Here’s a snapshot of income protection policies on Canstar’s database available for a non-smoking, male aged 30-39.

The table above shows a snapshot of income protection policies on Canstar’s database available for a non-smoking, male, doctor/GP aged 30-39. This table is sorted by Star Rating (highest to lowest) then by provider name (alphabetically).

The table above shows a snapshot of income protection policies on Canstar’s database available for a non-smoking, male, electrician aged 30-39. This table is sorted by Star Rating (highest to lowest) then by provider name (alphabetically).

The table above shows a snapshot of income protection policies on Canstar’s database available for a non-smoking, male, HR Manager aged 30-39. This table is sorted by Star Rating (highest to lowest) ten by provider name (alphabetically).

For a tailored comparison tailored to your occupation click here.

Why do women pay more for income protection?

Statistically, females are more likely to claim on income protection, with more claims relating to mental health and nervous system issues. Also, they have claims related to pregnancy and genito-urinary tract. On the other hand, males have higher accident rates. Female cancers also typically occur at younger ages than male cancers. Females have been on claims in the past longer than males – on average, a female will be on a claim for 158 days compared to 118 days for a male (2002 Report of the Disability Committee, Institute of Actuaries of Australia).

Looking for an income protection policy? Here’s a snapshot of income protection policies on Canstar’s database available for a non-smoking, female aged 30-39.

The table above shows a snapshot of income protection policies on Canstar’s database available for a non-smoking, female, doctor/GP aged 30-39. This table is sorted by Star Rating (highest to lowest) then by provider name (alphabetically).

The table above shows a snapshot of income protection policies on Canstar’s database available for a non-smoking, female, electrician aged 30-39. This table is sorted by Star Rating (highest to lowest) then by provider name (alphabetically).

The table above shows a snapshot of income protection policies on Canstar’s database available for a non-smoking, female, HR Manager aged 30-39. This table is sorted by Star Rating (highest to lowest) ten by provider name (alphabetically).

For a tailored comparison tailored to your occupation click here.

How much does income protection cost?

The Canstar Research team has calculated the average monthly premiums for non-smoking male and female workers. The first table is for a 27-year-old and the second table is for a 52-year-old.

For the purposes of comparison, our ratings consider $3,125 cover per month (based on 75% of an annual income of $50,000), and $6,250 cover per month (based on 75% of an annual income of $100,000).

27-year-old non-smoker’s average premium cost for direct income protection

As you can see from the table below, income protection insurance is typically more expensive the more physical work is involved in an occupation, with cleaners and waiters facing higher premiums on average.

Average Monthly Premiums for a 27-year-old Non-Smoker by Occupation
  Monthly Benefit of $3,125 Monthly Benefit of $6,250
Occupations Male Female Male Female
Accountant $41 $50 $80 $98
Clerk $44 $54 $85 $104
Retail Manager $48 $58 $92 $112
Receptionist $44 $54 $85 $104
Store Person $46 $56 $88 $107
Sales Representative $49 $59 $94 $113
Sales Assistant $55 $64 $105 $125
Secondary School Teacher $56 $67 $108 $130
Registered Nurse $64 $75 $122 $145
Chef $76 $91 $147 $177
Truck Driver $85 $102 $163 $196
Electrician $79 $94 $153 $183
Car Mechanic $82 $97 $158 $188
Checkout Operator $76 $92 $147 $177
Waiter $73 $86 $139 $166
Commercial Cleaner $92 $109 $176 $211
Source: Canstar 2018 Direct Income Protection Star Ratings. Based on policies rated by Canstar in 2018. Monthly benefit amount of $3,125 is based on 75% of monthly income for an annual income of $50,000. Monthly benefit of $6,250 is based on 75% of monthly income for an annual income of $100,000. Quotes are based on a 28 or 30 day waiting period and benefit period of 2 years.

Compare Direct Income Protection with Canstar

52-year-old non-smoker’s average premium cost for direct income protection

As this table shows, income protection insurance typically becomes more expensive as you age.

Average Monthly Premiums for a 52-year-old Non-Smoker by Occupation
  Monthly Benefit of $3,125 Monthly Benefit of $6,250
Occupations Male Female Male Female
Accountant $104 $149 $201 $289
Clerk $112 $161 $217 $312
Retail Manager $122 $173 $234 $336
Receptionist $112 $161 $217 $312
Store Person $119 $169 $228 $326
Sales Representative $125 $175 $240 $340
Sales Assistant $141 $195 $271 $377
Secondary School Teacher $149 $204 $288 $394
Registered Nurse $166 $227 $319 $439
Chef $192 $270 $373 $527
Truck Driver $228 $314 $434 $603
Electrician $203 $281 $393 $547
Car Mechanic $212 $292 $407 $567
Checkout Operator $201 $280 $385 $539
Waiter $193 $265 $368 $508
Commercial Cleaner $242 $335 $464 $646
Source: Canstar 2018 Direct Income Protection Star Ratings. Based on policies rated by Canstar in 2018. Monthly benefit amount of $3,125 is based on 75% of monthly income for an annual income of $50,000. Monthly benefit of $6,250 is based on 75% of monthly income for an annual income of $100,000. Quotes are based on a 28 or 30 day waiting period and benefit period of 2 years.

Compare the rest of your options when it comes to term life insurance using our website:

Compare Term Life Insurance

Why income protection can be worth considering

When you’re off work, if you’ve used up all of your sick leave or other available leave, and you’re not eligible for workers’ compensation, you can find yourself under financial strain. There are many expenses that keep coming regardless of whether you’re earning money or not that need to be considered.

We’ve provided some examples of the monthly expenses you could expect to face while you’re off work. The tables below make the following assumptions about your spending habits while you’re off work:

  • Not paying interest on a credit card balance
  • Includes car loan; no other debts
  • No savings goals at present
  • Non-smoking
  • Non-drinking
  • No children

They also do not include expenses for discretionary purchases, such as buying takeaway meals, expensive hobbies, buying new clothes, paying for a haircut or new make-up or going to the gym.

Expenses you could expect to pay while you’re off work

Expense Typical cost Cost per month
Rent / Mortgage $400/week $1,733
Broadband Internet $70/month $70
Mobile Phone $60/month $60
Car Insurance $800/year $67
Home and Contents Insurance

(excluding North Queensland)

$950/year $79
Health Insurance $3,489/year $291
Car Loan at 8.99% $311/month $311
Groceries $150/week $650
Pharmaceutical Medicines $50/month $50
Pet Expenses and Vet Bills $200/month $200
Petrol / Public Transport $40/week $173
Estimated usual
monthly expenses
$3,684/month
Source: Canstar Budget Planner Calculator.

Compare Direct Income Protection with Canstar

Get the right income protection policy

It seems clear that income protection insurance is worth considering, so how do you choose the right policy for you? We’ve made it easy for you to find insurance that provides outstanding value. In 2018, Canstar compared 16 direct income protection insurance policies from 14 providers.

Compare Direct Income Protection with Canstar

Find out more about direct income protection with our latest star ratings report:

Direct Income Protection Star Ratings - Canstar

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