Have you considered how your household finances would be affected if you were unable to work due to injury or illness? For many Australians, an income is what helps cover everyday expenses, mortgage repayments and future goals.
Could you manage financially if you couldn’t work for a while?
ARTICLE
7 September 2026
3 min read
3 min read
What’s your most important asset?
Many of us insure valuable possessions such as our car, home and personal belongings. But one of our most important financial assets is often the ability to earn an income.
Many Australians spend more on insuring their cars than they do protecting their income. The cost of car insurance ranges from $1,800 to more than $2,900 per year on average, according to Canstar Research.1
By comparison, an example Income Protection policy premium is $433.25 per year.2
How does income protection work and why do you need it?
In simple terms, income protection insurance replaces up to 70% of your income for an agreed period, if you’re unable to work or need to reduce your hours, due to injury or illness.
What are you covered for?
Unlike some types of insurance that cover specific medical conditions, income protection insurance may provide cover for a broad range of illnesses and injuries, from back injuries to mental health conditions, subject to the policy terms and conditions.
How and when you’re paid an income
If you purchase a Priority Protection Income Protection policy online, the benefit payments can commence after an agreed waiting period: 30 or 90 days of not being able to work due to the illness or injury event. A longer waiting period generally means you pay lower premiums, while shorter waiting periods may attract higher premiums.
Benefit payments can continue for an agreed benefit period of either two or five years. Choosing different waiting periods and benefit periods allows you to tailor your cover to your needs and budget.
Your income payments will last for an agreed maximum period: two or five years. Shorter periods will generally attract lower premiums. This is one of the reasons why income protection policies are so useful, because they can be customised to your specific needs.
You can save on tax with income protection
In many circumstances, income protection premiums may be tax deductible. If you make a claim, any benefit payments received are generally treated as assessable income and taxed at your marginal tax rate.
Get affordable, flexible cover
With AIA Priority Protection Income Protection cover, you can apply in minutes with no medicals or complicated paperwork. It’s a simple way to help protect your income, plus you’ll receive a 5% discount when you apply online.
2 AIA Priority Protection Income Protection policy purchased online based on a male 40 year old accountant (qualified), residing in NSW, non-smoker with a 90 day waiting period and 2 year benefit period and cover amount of $7,000 per month as at 1 August 2026. Includes Policy fee, Large Sum Insured discount, Initial Selection discount and 5% AIA online discount. This is an example only and is not a personalised quote. Premiums may depend upon factors that include the type and level of cover selected, payment frequency, the insured’s gender, age, smoking status, health history, employment situation, occupation type, hours worked plus any indexation increases, and any discounts that may apply. A level of cover sufficient to meet the minimum premium may be required. Acceptance is subject to meeting eligibility criteria and underwriting requirements.
Disclaimer:
Copyright © 2026 AIA Australia Limited (ABN 79 004 837 861 AFSL 230043). This is general information only, without taking into account factors like the objectives, financial situation, needs or personal circumstances of any individual and is not intended to be financial, legal, tax, medical, nutritional, health, fitness or other advice. Before acting on the information in this publication, individuals should consider its appropriateness having regard to such factors. The source information of the articles is current as of the date of publication and may be subject to change. While the information contained herein is believed to be accurate, AIA Australia expressly disclaims any and all liability for representations or warranties, expressed or implied, contained in, or for omissions from, the information.
Copyright © 2026 AIA Australia Limited (ABN 79 004 837 861 AFSL 230043). This is general information only, without taking into account factors like the objectives, financial situation, needs or personal circumstances of any individual and is not intended to be financial, legal, tax, medical, nutritional, health, fitness or other advice. Before acting on the information in this publication, individuals should consider its appropriateness having regard to such factors. The source information of the articles is current as of the date of publication and may be subject to change. While the information contained herein is believed to be accurate, AIA Australia expressly disclaims any and all liability for representations or warranties, expressed or implied, contained in, or for omissions from, the information.
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