By Tony Smilevski · Updated 11 October 2026
Key points
- Acenda's PDS describes a monthly benefit payable if the insured person is totally or partially disabled for longer than the waiting period while insured.[1]
- Benefits are limited to a share of income: AIA's PDS pays the lesser of the Sum Insured and 70% of pre-disablement income (worked out in bands) for the first 24 months, and 60% after that unless the Flat 70% Option or the 5 year Benefit Period Option is chosen,[2] and ClearView's Income Protection (IP60) pays the lesser of the insured monthly benefit and 60% of pre-disability earnings.[3]
- Waiting periods differ by insurer: AIA lists 30 days, 60 days, 90 days or 2 years (Income Protection CORE is not available to occupation category E),[4] while TAL lists 4 weeks, 8 weeks, 13 weeks or 26 weeks, and says occupational restrictions may apply.[5]
- TAL's PDS says it does not provide a benefit if the insured person is not working solely because of redundancy or an economic downturn.[6]
- AIA's PDS says an Income Protection CORE claim, in all occupation categories, must also fit the super law test called temporary incapacity (ill health that has caused you to stop being employed or self-employed); a claim that doesn't is assessed under its Complimentary Income Protection CORE Extras policy instead.[7]
Income protection insurance pays a monthly benefit when sickness or injury stops you working, fully or partly, for longer than a waiting period. It replaces part of your income, not all of it. This guide draws on insurer product disclosure statements (PDSs).
What is income protection insurance?
It is insurance that pays a regular benefit if you lose income because you are sick or injured. TAL's PDS puts it this way: it "provides a benefit if you suffer a loss of income due to a Sickness or Injury."[6] Acenda's PDS describes a monthly benefit payable if you are totally or partially disabled for longer than the waiting period while insured.[1]
How does income protection work?
You choose a monthly benefit amount, a waiting period and a benefit period. If illness or injury stops you working for longer than the waiting period, the insurer pays the monthly benefit, subject to the policy terms, until you recover, the benefit period ends or the cover ends.
- Total and partial disability. If you can work part-time or earn less, some policies pay part of the benefit. Acenda's PDS pays "a proportion of the Monthly Benefit", based on the gap between your earnings before and after disability.[8]
- The test can change during a claim. AIA's PDS tests your ability to do your own occupation for the first 24 months of benefit payments, then a suited occupation, except on its 5 year Benefit Period Option.[4] ClearView's "to age 65" cover moves from regular occupation to suited occupation 30 months from the date of disability.[9]
Benefits can also be reduced by other payments. TAL's PDS lists examples including sick leave, some workers' compensation payments, and other disability income insurance not disclosed when the cover was underwritten.[10] See our claims guide for the claim process.
How much of my income can income protection cover?
Only a share of it. The PDSs quoted here limit the monthly benefit to a percentage of your income before you became unwell, capped at the amount you insured. The percentage and how it applies differ by insurer and product:
- AIA's target market determination (TMD) refers to a monthly benefit up to a maximum of 70% of pre-disability monthly income.[11] AIA's PDS applies 70% for the first 24 months and 60% after that, unless the Flat 70% Option or the 5 year Benefit Period Option is chosen. The 70% is worked out in bands: 70% of the first $20,000 of monthly pre-disablement income, 50% of the next $20,000 and 20% of the next $30,000.[2]
- ClearView's Income Protection (IP60) pays the lesser of the insured monthly benefit and 60% of pre-disability earnings. Its Income Protection Flex (IP70) uses 70%. The IP70 reducing version uses 70% until 24 months from the end of the waiting period, then 85.72% of the amount payable in the first 24 months.[3]
- TAL's PDS sets the maximum proportion of income that can be covered in bands: 70% of the first $25,000 per month of earnings, 50% of the next $16,666 per month and 20% of the remaining earnings.[12]
Agreed value or indemnity: what is the difference?
With indemnity cover, the benefit depends on the income you were earning before you became disabled. With agreed value cover, the benefit is not reduced by a change in earnings. Acenda's Protectionfirst PDS says agreed value cover "will cost more than indemnity cover for this reason".[13]
Availability varies by product:
- AIA's TMD says the only income protection it offers is Income Protection CORE (Indemnity).[11]
- Acenda's Protectionfirst PDS says agreed value cover is no longer available if you don't already hold it.[13] Its separate Acenda Insurance PDS says that product's income protection is indemnity cover.[14]
AIA's PDS explains that an indemnity policy works out the benefit from your actual income in the 12 months before disablement, capped at the sum insured. A fall in income can mean a lower benefit. A rise doesn't lift it above the sum insured unless the sum insured is updated.[15]
What are the waiting period and benefit period choices?
The waiting period is how long you must be unable to work before payments start. The benefit period is the longest the insurer will pay for one claim. Acenda's PDS says premiums are generally higher for shorter waiting periods and for longer benefit periods.[1]
The choices differ by insurer and by occupation. Examples from PDSs:
- AIA: waiting periods of 30 days, 60 days, 90 days or 2 years. Benefit periods of 2 years, 5 years (ending earlier at the anniversary before your 65th birthday) or to age 65.[4]
- ClearView: waiting periods of 30, 60 or 90 days (plus two years only if you already have group income protection with a two-year benefit period). Benefit periods of two years, five years or age 65. Not all options are available for all occupation categories.[16]
- Acenda: waiting periods of 14 days, 30 days, 90 days, 1 year or 2 years. Benefit periods of 2 years, 5 years or up to age 65, plus up to age 70 on Income Assure+ outside super (special terms apply after 65). For people in certain hazardous occupations, only 30-day and 90-day waiting periods and 2-year and 5-year benefit periods are listed.[1]
- TAL: waiting periods of 4 weeks, 8 weeks, 13 weeks or 26 weeks. Benefit periods depend on the option: Income Protection Focus lists 1 year, 2 years or 5 years (no benefit is payable beyond the plan end date), and Income Protection Enhance and Income Protection Extend list to age 65. Occupational restrictions may apply.[5]
How the insurers compare
- Insurer and topic: AIA: waiting and benefit periods — What its PDS says: Waiting 30, 60, 90 days or 2 years; benefit 2 years, 5 years (ending earlier at the anniversary before your 65th birthday) or to age 65; CORE not available to category E, to age 65 not to D or E.[4]
- Insurer and topic: ClearView: waiting and benefit periods — What its PDS says: Waiting 30, 60 or 90 days (two years only if you already have group income protection with a two-year benefit period); benefit 2 years, 5 years or age 65; varies by occupation.[16]
- Insurer and topic: Acenda: waiting and benefit periods — What its PDS says: Waiting 14, 30, 90 days, 1 or 2 years; benefit 2 years, 5 years or to age 65 (to 70 on Income Assure+, outside super; special terms after 65); hazardous occupations have fewer options.[1]
- Insurer and topic: TAL: waiting and benefit periods — What its PDS says: Waiting 4, 8, 13 or 26 weeks; benefit depends on the option (Focus 1, 2 or 5 years; Enhance and Extend to age 65); no benefit beyond the plan end date; occupational restrictions may apply.[5]
- Insurer and topic: AIA: share of income — What its PDS says: Lesser of Sum Insured and 70% for 24 months, then 60% unless Flat 70% or 5 year Benefit Period Option chosen; 70% applies in income bands (see How much of my income can income protection cover?).[2]
- Insurer and topic: ClearView: share of income — What its PDS says: IP60 pays the lesser of insured monthly benefit and 60% of earnings; IP70 uses 70%; the IP70 reducing version pays 85.72% of the first-24-month amount after 24 months.[3]
- Insurer and topic: TAL: share of income — What its PDS says: Maximum cover in bands: 70% of the first $25,000 a month of earnings, 50% of the next $16,666, 20% of the rest; on some options the benefit drops to 2/3 after 24 months on claim (see the PDS).[12]
Why does my occupation matter?
Insurers group occupations by risk, which can affect the cover available, the options and the premium. Acenda's PDS says occupations are classed by the risk of injury or illness and that, generally, the higher the risk, the higher the premium.[17]
Examples:
- AIA's PDS uses occupation categories A1, A2, M, A3, A4, B1, B2, C1, C2, D and E. Income Protection CORE is not available to category E, and to age 65 is not available to categories D and E.[4]
- TAL's PDS sets claim qualification by occupation class. For classes BBB, BB, B and SRA it refers to being totally unable to work for at least 14 consecutive days during the waiting period. For classes AAA, AA+, AA and A it refers to at least 7 consecutive days.[18]
Some products are built for professions. PPS Mutual's income protection TMD describes a target market of people eligible to practise, or with a minimum tertiary qualification, in a professional field it recognises.[19]
How does income protection work for the self-employed?
Insurers define and assess a self-employed person's income in their own way. AIA and TAL both work from business income after business expenses, and both leave out investment income such as rental income.[20][21]
- AIA's PDS defines income for a self-employed person as income from your business or practice related to your personal exertion or activities, less your share of necessarily incurred business expenses. Dividends, interest, rental income and asset sale proceeds are excluded.[20]
- TAL's PDS defines earnings for a self-employed person as their share of net profits and net losses from the business, after excluding business expenses that were not necessarily incurred.[21]
- TAL's PDS bases claim payments for self-employed people on average earnings over the last two full financial years. It also says it does not pay if your business is not making a profit for reasons other than you being unable to work through sickness or injury.[6]
Some insurers offer separate business expenses cover. See our business protection insurance guide.
Does income protection cover redundancy?
No, not the income protection benefit itself. It responds to illness or injury, not job loss. TAL's PDS says it does not provide a benefit if you are not working solely because of redundancy or an economic downturn,[6] and that it "does not cover losses due to economic circumstances."[22] AIA's TMD lists people seeking protection against unemployment or redundancy as outside the customers the product was designed for.[11]
Separately, ClearView waives the premium for up to three months while you are involuntarily unemployed, other than as a direct result of sickness or injury.[23] It defines involuntarily unemployed as becoming unemployed due to retrenchment, redundancy or an employer in administration or liquidation, and excludes voluntary redundancy, resignation, the end of a fixed term contract and stopping self-employed work.[24] ClearView also says its cover continues while you are unemployed, but after more than 12 months unemployed the test becomes any suited occupation.[25]
Can I hold income protection in super, and is it tax deductible?
Some insurers offer income protection inside super, where a claim must also meet a super law test called temporary incapacity. AIA's PDS describes it as ill health that has caused you to stop being employed or self-employed. It applies the test to Income Protection CORE claims in all occupation categories, and a claim that doesn't meet it is assessed under AIA's Complimentary Income Protection CORE Extras policy.[7] Acenda and TAL apply the test to cover held in super.[8][18]
ClearView's example: if cover is held inside super and you don't meet temporary incapacity, such as being unemployed at the time of disability, no benefit is payable under the policy inside super. ClearView then assesses the claim under cover it provides outside super at no extra cost.[25] Our life insurance in super guide has more.
On tax, the ATO says: "Only the premiums you pay to protect your income (salary and wages) are deductible." It says you can't claim a deduction if the policy "is through your superannuation fund and the premiums are deducted from your contributions". It also says a payment that replaces your salary and wages under an income protection policy must be included in your tax return.[26] How this applies depends on your circumstances. A registered tax agent or accountant can say how it applies to you. See also our tax deductibility guide.
How is income protection different from TPD, trauma and life insurance?
They cover different events. TAL's PDS describes the others this way:
- TPD insurance pays its benefit amount if you become totally and permanently disabled, under the policy's definition.[27] See our TPD insurance guide.
- Trauma (critical illness) insurance pays a benefit if you suffer a specified serious event listed in the policy.[28] See our trauma insurance guide.
- Life insurance pays its benefit amount on death or terminal illness.[29] See our life insurance guide.
Do I need income protection?
We can't tell you whether you need it. That depends on your own circumstances, and this page doesn't take them into account.
AIA's TMD describes its target customers as people who are employed and have savings or other financial capacity to pay premiums.[11] Premiums are ongoing, the benefit is a share of income, and it doesn't pay during the waiting period. PPS Mutual's TMD says underwriting could result in a higher price, limits on the sum insured, special terms, or cover being declined.[30]
Questions to ask before you choose
- Which waiting periods and benefit periods can I choose for my occupation category?
- Is the cover indemnity or agreed value? What happens to the benefit if my income changes?
- How does the policy assess my income at claim time? What counts if I'm self-employed?
- Does the definition of disability change during a claim, and when?
- Is the cover held inside or outside super, and which extra conditions apply?
- What could reduce the benefit, such as sick leave, other insurance or workers' compensation?
- Are the premiums variable age-stepped or variable (once called stepped and level), and can they change?
- What are the exclusions, and how would my health history be underwritten? (See our pre-existing conditions guide.)
Read the insurer's PDS and TMD before deciding. You can find them in our PDS and TMD library. We deal with 11 Australian life insurers. For general information about anything in this guide, book a time with Tony or call 0433 22 77 11.
Sources
- [1] Acenda Insurance and Acenda Insurance (Super) PDS (Apr 2026), PDF page 42.
- [2] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 97.
- [3] ClearView ClearChoice Combined PDS (Aug 2026), PDF page 67.
- [4] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 90.
- [5] TAL Accelerated Protection Combined PDS and Policy Document (Dec 2025), PDF page 12.
- [6] TAL Accelerated Protection Combined PDS and Policy Document (Dec 2025), PDF page 11.
- [7] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 98.
- [8] Acenda Insurance and Acenda Insurance (Super) PDS (Apr 2026), PDF page 93.
- [9] ClearView ClearChoice Combined PDS (Aug 2026), PDF page 65.
- [10] TAL Accelerated Protection Combined PDS and Policy Document (Dec 2025), PDF page 35.
- [11] AIA TMD (Aug 2026), PDF page 24.
- [12] TAL Accelerated Protection Combined PDS and Policy Document (Dec 2025), PDF page 13.
- [13] Acenda Protectionfirst PDS Combo kit (Sep 2025), PDF page 28.
- [14] Acenda Insurance and Acenda Insurance (Super) PDS (Apr 2026), PDF page 85.
- [15] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 95.
- [16] ClearView ClearChoice Combined PDS (Aug 2026), PDF page 19.
- [17] Acenda Insurance and Acenda Insurance (Super) PDS (Apr 2026), PDF page 51.
- [18] TAL Accelerated Protection Combined PDS and Policy Document (Dec 2025), PDF page 30.
- [19] PPS TMD Income-Protection (Sep 2026), PDF page 2.
- [20] AIA Priority Protection and Priority Protection for Platform Investors PDS (Aug 2026), PDF page 187.
- [21] TAL Accelerated Protection Combined PDS and Policy Document (Dec 2025), PDF page 46.
- [22] TAL Accelerated Protection Combined PDS and Policy Document (Dec 2025), PDF page 31.
- [23] ClearView ClearChoice Combined PDS (Aug 2026), PDF page 84.
- [24] ClearView ClearChoice Combined PDS (Aug 2026), PDF page 122.
- [25] ClearView ClearChoice Combined PDS (Aug 2026), PDF page 66.
- [26] Australian Taxation Office, Income protection insurance (retrieved 30 September 2026).
- [27] TAL Accelerated Protection Combined PDS and Policy Document (Dec 2025), PDF page 8.
- [28] TAL Accelerated Protection Combined PDS and Policy Document (Dec 2025), PDF page 9.
- [29] TAL Accelerated Protection Combined PDS and Policy Document (Dec 2025), PDF page 7.
- [30] PPS TMD Income-Protection (Sep 2026), PDF page 3.
Just so you know, Tony Insurance operates under Sustainable Life Solutions (AFSL 536966) and can only give general advice about life insurance. That means we'll tell you what you need to know for you to make a good decision, but we can't give you specific advice or recommendations. It also means that everything on our website is only general information and isn't specific to you.
Toni Smilevski, Authorised Representative 343156 of Sustainable Life Solutions Pty Ltd (AFSL 536966)