Income Protection Premiums

Indemnity or Agreed Cover?

With income protection you can take out an indemnity or an agreed value policy

Indemnity Policy

This is where financial evidence is not required at the application stage, but will be needed in the event of a claim. However if your income reduces in the future the policy will only pay 75% of your lower income level. Indemnity cover does have lower premiums than agreed value. For salary based wage earners indemnity cover is an attractive lower cost form of cover.

Agreed Value Policy

This is where you prove your income at the application stage, and the insurance company agreed to the monthly benefit. This means that in the future, regardless of if your income reduces, you will be paid the agreed monthly benefit. This also means that in the event of a claim financial evidence will not need to be produced.

Note

Agreed value policy will have premiums approximately 20% higher than indemnity cover. However for people with fluctuating incomes agreed value policy should be established.

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Income Protection Premiums (clerical occupation):

These premiums are for various ages, both for Males and Females. The following premiums are based on an indemnity policy for someone with an annual income of $50,000 in a clerical occupation ($3,125 monthly benefit) indemnity value. This is with a 30 day waiting period and a benefit to age 65:

Age Male Female
30 $40 $55
35 $50 $70
40 $70 $95
45 $95 $130
50 $125 $185
55 $180 $240

Income Protection Premiums (blue collar occupation):

These premiums are for various ages, both for Males and Females. The following premiums are based on an indemnity policy for someone with an annual income of $50,000 in a skilled blue collar occupation ($3,125 monthly benefit) agreed value. This is with a 30 day waiting period and a benefit of 5 years:

Age Male Female
30 $60 $80
35 $70 $100
40 $90 $130
45 $120 $170
50 $175 $260
55 $320 $420

Income Protection Premiums (high income earners):

These premiums are for various ages, both for Males and Females. The following premiums are based on an indemnity policy for someone with an annual income of $150,000 in a white collar occupation ($9,375 monthly benefit) indemnity value. This is with a 30 day waiting period and a benefit of 5 years:

Age Male Female
30 $95 $120
35 $120 $150
40 $150 $195
45 $210 $270
50 $310 $420
55 $450 $600


* remember that income protection premiums are 100% tax deductible and the above approximate premiums do not take any tax deduction into consideration.