Frequently Asked Questions

General advice is financial guidance that does not take into account your individual objectives, financial situation, or needs. It provides factual information and general considerations about financial products, but does not involve an assessment of what is suitable or appropriate for you personally.

This is different from personal advice, where a qualified adviser assesses your individual circumstances and makes recommendations tailored specifically to you.

The information and tools on this website are general advice only. Before making any decisions about personal insurance, you should consider whether the information is appropriate to your circumstances and, where appropriate, seek personal advice from a qualified financial adviser.

There are four main types of personal insurance commonly available in Australia:

• Life Insurance — pays a lump sum to your beneficiaries if you pass away or are diagnosed with a terminal illness
• TPD Insurance — pays a lump sum if you become totally and permanently disabled and are unlikely to ever work again
• Income Protection — replaces a portion of your income (up to 70%) if you are unable to work due to illness or injury
• Trauma Insurance — pays a lump sum if you are diagnosed with a specified critical illness, regardless of whether you can still work

Each type serves a different purpose, and many people hold a combination of cover types. You can learn more about each on our Learn pages.

Personal insurance is designed to provide financial protection if something unexpected happens — such as a serious illness, injury, or death — that affects your ability to earn an income or support your family financially.

Without cover, these events could mean struggling to meet mortgage repayments, covering medical costs, maintaining your family's standard of living, or funding rehabilitation and ongoing care.

Whether personal insurance is relevant to your situation depends on factors like your financial commitments, dependants, existing savings, and any cover you already hold (including through your super fund). Our needs analysis tool can help you think through these factors.

Underwriting is the process an insurer uses to assess your application and determine the terms on which they will offer cover. It typically involves questions about your:

• Health and medical history
• Occupation and duties
• Lifestyle factors (e.g. smoking status, alcohol consumption)
• Hazardous pastimes (e.g. skydiving, scuba diving)
• Travel history and plans
• Family medical history

Based on this information, the insurer may offer cover on standard terms, apply a loading (an additional premium to reflect higher risk), apply specific exclusions (conditions or events that won't be covered), or in some cases decline the application.

The process typically involves completing an application form and may require medical tests (such as blood tests or a medical examination) depending on your age, the amount of cover, and your health history. The application process can take anywhere from a few days to several weeks depending on complexity.

These are the two main premium structures for personal insurance. You may also see them referred to by their previous names — "stepped" and "level" premiums — as the industry updated the terminology at the end of 2024.

Variable age-stepped premiums (previously "stepped") are recalculated each year based on your age at renewal. They start lower when you're younger but increase each year as you age, reflecting the higher statistical risk of a claim. Over time, variable age-stepped premiums can become quite expensive.

Variable premiums (previously "level") are calculated based on your age when the policy starts (your "entry age") and are designed to remain more stable over time. However, they are not guaranteed to stay the same — the insurer can still adjust them for factors like claims experience or regulatory changes. Variable premiums cost more initially but can work out more cost-effective over the long term if you intend to hold cover for many years.

Neither option is inherently better — the right choice depends on how long you expect to hold the cover and your budget preferences. Variable age-stepped premiums may suit shorter-term needs; variable premiums may suit people planning to hold cover for 15+ years.

It depends on the type of cover and how it is held:

• Income Protection premiums are generally tax-deductible for individuals when held outside super. This can significantly reduce the after-tax cost of cover.
• Life, TPD, and Trauma premiums are generally not tax-deductible for individuals.
• For cover held inside super, the super fund can claim a tax deduction for the premiums, which may result in a lower premium rate. However, premiums paid from super reduce your retirement savings.

Tax rules can be complex and may change. Consider seeking advice from a qualified tax professional or financial adviser about your specific situation.

Several factors influence the cost of personal insurance premiums, including:

• Age — premiums generally increase with age as the risk of illness or injury rises
• Gender — statistical differences in health outcomes mean premiums can differ between genders
• Smoking status — smokers typically pay significantly higher premiums (often 50–100% more)
• Occupation — higher-risk occupations attract higher premiums. A desk-based professional will generally pay less than a tradesperson or manual labourer
• Health and medical history — pre-existing conditions may result in premium loadings or exclusions
• Sum insured — higher cover amounts mean higher premiums
• Policy structure — choices like waiting period, benefit period, and variable age-stepped vs variable premiums all affect cost

Our premium estimator can give you a ballpark sense of what premiums might look like based on some of these factors.

Personal insurance can be held inside your superannuation fund or outside it (i.e. owned by you directly). The key differences are:

Inside super:

• Premiums are paid from your super balance, reducing the direct cost to your take-home pay
• However, premiums paid from super reduce your retirement savings over time
• Cover types available inside super are Life, TPD, and Income Protection (Trauma cannot be held inside super)
• TPD held inside super is generally limited to an "any occupation" definition
• Beneficiary nominations must be made through the super fund and may be subject to trustee discretion unless a valid binding nomination is in place
• Tax treatment of benefits can vary depending on the components and the beneficiary's relationship to the deceased/disabled person

Outside super:

• Premiums are paid from personal cash flow
• Income protection premiums are generally tax-deductible to the individual
• All four cover types are available (Life, TPD, Income Protection, and Trauma)
• TPD can be held on an "own occupation" definition
• You have full control over beneficiary nominations and policy ownership
• Benefits are generally tax-free for life and TPD (when paid to the insured or a dependant)

Many people use a combination of both to balance cash flow impact with breadth of cover.

Most super funds provide some level of default insurance cover — often life and TPD insurance — which is set up automatically when you join the fund. To find out what cover you have:

• Log in to your super fund's online portal or app — insurance details are usually listed under a "Insurance" or "Cover" section
• Check your most recent annual super statement, which should list any insurance cover and the premiums being charged
• Call your super fund directly and ask them to confirm your current cover types, amounts, and premium costs

It's worth checking this before taking out additional cover, as you may already have some level of protection in place. However, default cover amounts are often quite low and may not be sufficient for your needs.

Yes, you can hold insurance policies with multiple insurers. There is no legal restriction on having multiple policies. If you make a claim, you can generally claim on all eligible policies — for example, if you hold life insurance with two different insurers, both policies would pay their respective benefits.

However, income protection is an exception: most income protection policies contain an "other insurance" offset clause. This means that if you hold multiple IP policies, the total benefit paid across all policies is typically capped at a combined maximum (usually 70% of your pre-disability income). You cannot claim the full benefit from multiple IP policies to receive more than your pre-disability income.

Having multiple policies also means paying multiple sets of premiums, so it's worth considering whether consolidating cover with one insurer might be more cost-effective.

The claims process generally involves:

• Notification: Contact the insurer (or your financial adviser, who can assist) to notify them of a potential claim. Early notification is generally recommended.
• Claim forms: Complete the insurer's claim forms, which typically require details about your condition, treatment, and inability to work.
• Medical evidence: Provide supporting medical evidence, including reports from your treating doctor and specialists. The insurer may also request independent medical examinations.
• Assessment: The insurer reviews the evidence against the policy terms and definitions. This may involve follow-up questions or additional information requests.
• Decision: The insurer will either accept the claim, request further information, or decline the claim (with reasons provided).

The timeframe for claim assessment varies depending on the type of cover and complexity of the claim. Income protection claims may be assessed within a few weeks of the waiting period ending. TPD and trauma claims can take several months due to the need for comprehensive medical evidence.

If a claim is declined, you have the right to request a review through the insurer's internal dispute resolution process, and if not resolved, through the Australian Financial Complaints Authority (AFCA).

These terms apply primarily to income protection insurance:

A waiting period is the amount of time you must be continuously unable to work before benefit payments begin. Common options are 30, 60, or 90 days. A longer waiting period means lower premiums but a longer gap before you receive any payments. The waiting period should generally be matched to how long you could sustain yourself without income (using sick leave, savings, or other resources).

A benefit period is the maximum length of time the insurer will pay the monthly benefit for a single claim. Common options are 2 years, 5 years, or to age 65. A longer benefit period means higher premiums but greater protection against long-term disability.

A pre-existing condition is any illness, injury, or medical condition that existed before you applied for insurance. During the underwriting process, the insurer assesses your medical history and may:

• Accept on standard terms — if the condition is minor, well-managed, or poses minimal risk
• Apply a loading — charge an additional premium to reflect the higher risk
• Apply an exclusion — cover you for everything except claims related to the specific pre-existing condition
• Decline cover — in cases where the risk is considered too high

It is critical to answer all health questions honestly and completely during the application process. Failing to disclose a pre-existing condition — even unintentionally — can result in a claim being denied or a policy being voided. This is known as the duty of disclosure.

There are several reasons younger, healthy people commonly consider personal insurance:

• Lower premiums: Insurance is generally cheaper when you're younger and healthier. Locking in cover early means lower costs.
• Insurability: If you develop a health condition later, it may result in exclusions, loadings, or difficulty obtaining cover at all. Applying while healthy typically means broader cover with fewer restrictions.
• Financial commitments: Even young people often have mortgages, car loans, or dependants that would be financially impacted by illness, injury, or death.
• Statistics: Serious illness and injury can happen at any age. Conditions like cancer, mental health issues, and musculoskeletal injuries affect a significant number of working-age Australians each year.
• No guaranteed future access: Unlike some other financial products, you can't simply decide to get insurance later — your health at the time of application determines what you can get and what it will cost.