Insurance — Protect What Matters Most
Clear guidance on the cover you need, why it’s important, and how to find the right protection at a competitive price.
The Building Blocks
Understanding Insurance Cover
At the core, there are four main insurance products. They apply to both personal and business cover, with the main differences being structure, ownership, and tax treatment.
Life Insurance
Pays a lump sum benefit to nominated beneficiaries in the event of death. This cover is commonly used to help manage debts, support future expenses such as education, and provide financial assistance to dependants.
Life insurance is often considered a key component of a protection strategy. In the event of death, it can provide a lump sum payment to beneficiaries, which may be used for a range of financial needs such as repaying a mortgage, assisting with education costs, replacing lost income, or covering funeral expenses.
The level of cover required will vary depending on factors such as outstanding debts, dependants, income, and the period your family may need financial support. Policies may be held either inside or outside superannuation, with different ownership structures and potential tax considerations.
The appropriate level of cover will depend on your personal circumstances.
Total & Permanent Disability (TPD)
Pays a lump sum if you become permanently disabled as a result of illness or injury and are unable to return to work. The benefit may assist with debts, medical costs, and other financial needs.
Own Occupation — You may be considered totally and permanently disabled if illness or injury prevents you from ever working in your specific occupation again. This definition generally provides broader coverage.
Any Occupation — You may be considered totally and permanently disabled only if you are unable to work in any occupation reasonably suited to your education, training, or experience. This definition is more restrictive and is typically the option available when held inside superannuation.
TPD cover is often arranged alongside life insurance. The level of cover required may be similar to life insurance needs, with additional consideration for rehabilitation, medical expenses, and potential long-term financial support.
The appropriate definition and level of cover will depend on your individual circumstances.
Income Protection
Income protection insurance provides a monthly payment if illness or injury prevents you from working. The benefit is generally calculated as a portion of your pre-tax income and may assist with everyday expenses.
Waiting period: The time between when you stop working due to illness or injury and when benefit payments begin (commonly 30, 60, or 90 days). Choosing a longer waiting period may reduce premiums, and some people rely on savings or available leave to cover expenses during this time.
Benefit period: The length of time payments may continue while you remain unable to work (commonly two years, five years, or to age 65). Longer benefit periods generally increase the cost of cover but extend the duration of potential support.
Income protection premiums are generally tax-deductible when the policy is held outside superannuation, subject to current tax rules. For many working Australians, protecting their ability to earn an income forms an important part of their overall financial protection strategy.
The appropriate waiting period, benefit period, and level of cover will depend on your individual circumstances.
Trauma / Critical Illness
Pays a lump sum if you’re diagnosed with certain serious illnesses covered under the policy, such as cancer, heart attack, or stroke. The payment may assist with treatment costs, recovery time, or other financial commitments.
Trauma cover differs from TPD insurance in that a claim may be made upon diagnosis of certain specified medical conditions, without the need to prove permanent disability. The lump sum payment can provide financial support while you focus on treatment and recovery.
Trauma insurance is generally held outside superannuation as a personally owned policy. Premiums are typically not tax-deductible, although benefits are usually received tax-free under current tax rules.
Policies commonly cover serious conditions such as cancer, heart attack, stroke, and coronary artery bypass surgery, among others. However, the exact definitions and conditions covered can vary between insurers, which makes the Product Disclosure Statement (PDS) important to review.
The right level of trauma cover depends on your individual circumstances and existing cover.
For You & Your Family
Personal Protection
Insurance is not just a financial product; it can play an important role in protecting the people who depend on you. Here are some reasons individuals choose to put cover in place.
Protect Your Family From Debt
Financial obligations like mortgages and personal loans continue even if something happens to you. Insurance may help your family manage these responsibilities.
Children's Education & Upbringing
Education expenses such as school fees, university costs, and extracurricular activities can add up over time. Insurance may help provide financial support for your children’s future if the unexpected occurs.
Replace Lost Income
For many families, the ability to earn an income is their most important financial resource. Income protection can provide support if illness or injury prevents you from working.
Legacy & Lifestyle Continuity
Insurance can help provide financial support so your family can continue meeting everyday living expenses if the unexpected occurs.
Self-Assessment
How Much Cover Do You Want?
- General Information Only
This calculator is designed to offer general guidance to help you estimate your insurance needs. It is not intended to provide personal financial advice. Your situation may differ based on your individual circumstances, so we recommend consulting with a qualified adviser before making any decisions.
How Much Cover Do You Want?
- Life Insurance Guide
$
Debts: +
Education: +
Income Replacement:
Income replacement = annual shortfall of
capitalised at 5% return
This is a starting point. Your actual needs depend on your individual circumstances, existing cover, and financial goals.
- TPD Guide
$
Life cover amount ()
+ Medical/rehab buffer ($100,000)
This is a starting point. Your actual needs depend on your individual circumstances, existing cover, and financial goals.
- Income Protection Guide
$
75% of annual income
Suggested wait period: days (based on 6 weeks of saved leave)
Benefit period: Consider “to age 65” for maximum protection
This is a starting point. Your actual needs depend on your individual circumstances, existing cover, and financial goals.
- Trauma Guide
–
General guide range based on your debt and expense levels. Trauma cover provides a lump sum on diagnosis to cover treatment costs, time off work, and lifestyle adjustments.
This is a starting point. Your actual needs depend on your individual circumstances, existing cover, and financial goals.
Remember: These are general guide amounts only. Your actual insurance needs may be higher or lower depending on your specific situation, existing cover through super or other policies, and your financial goals. We strongly recommend speaking with a qualified adviser before making any insurance decisions.
For Business Owners
Business Protection — Same Products, Smarter Strategy
The same insurance products can also be structured for business use. What changes isn’t the product itself, but the purpose, ownership, and tax treatment. With the right setup, the same policy may qualify for tax deductions or provide tax-free benefits.
- Key Person Insurance
Safeguards the business if a key individual dies or becomes disabled. The policy is owned by the business, and any benefit paid goes directly to the business.
Revenue Purpose
Helps cover lost income and revenue while the business stabilises or secures a replacement.
Capital Purpose
Provides funds to replace the key person who is considered a vital asset to the business.
Reference: ATO Ruling IT 155 — Income tax: key person insurance.
- Buy/Sell Insurance
Supports a buy–sell agreement between business partners. If a partner passes away or becomes disabled, the insurance payout provides the funds for the remaining partners to acquire the departing owner’s share, helping ensure a smooth and funded transition of ownership.
Ownership Structures Compared
| Structure | How It Works | Premiums | CGT on Proceeds | Best For |
|---|---|---|---|---|
| Self-Owned | Each partner holds a policy on their own life. If a claim occurs, the benefit is paid to the departing owner or their estate. | Not deductible (capital purpose) | No CGT if original owner | Simplicity, tax efficiency |
| Cross-Owned | Each partner holds a policy on the other partner’s life. If a claim occurs, the payout goes to the surviving partners. | Not deductible (capital purpose) | CGT applies on TPD & Trauma (unless spouse/relative) | Certainty of funds for survivors |
| Trust-Owned | A trust structure owns and manages the insurance policies on behalf of the partners. | Not deductible (capital purpose) | Depends on trust deed (capital vs income characterisation) | Flexibility, multiple partners |
- Warning: Without a properly structured buy–sell agreement, the departing owner or their estate may receive the insurance payout while still retaining their ownership stake in the business. The insurance only works as intended when a formal agreement is in place.
- Division 7A & FBT risks: If a company covers insurance premiums for partners without the correct structure in place, it may trigger Division 7A deemed dividend issues or Fringe Benefits Tax implications. It’s important to obtain specialist advice on how the policy is owned and how premiums are paid.
- Business Expenses Insurance
Helps cover essential business expenses — such as rent, wages, utilities, and lease payments — while the owner is recovering from illness or injury. This support helps keep the business operating so it remains viable when the owner returns.
Designed to complement income protection — income protection supports your personal income, while business expenses cover helps keep the business operating.
- Revenue Protection
Protects the business against lost income when a key revenue-generating individual is unable to work. It provides financial support to help maintain operations, retain staff, and service clients while the person recovers or a replacement is arranged.
Generally treated the same as business expenses insurance for tax purposes — premiums are typically deductible as a business expense, and any benefits received are treated as assessable income.
Structure
Inside Super vs Outside Super
Where your insurance is held can make a significant difference — affecting tax treatment, how claims are paid, and the impact on your retirement savings.
| Factor | Inside Super | Outside Super |
|---|---|---|
| Cost | ✅ Premiums paid from super balance (not your pocket) | ❌ Paid from after-tax income |
| Impact on Retirement | ❌ Reduces your super balance over time | ✅ No impact on super savings |
| Tax on Premiums | ✅ Effectively paid with 15% tax money | Varies — IP premiums are tax-deductible outside super |
| Tax on Payouts | ❌ May be taxed depending on age and components | ✅ Generally tax-free (life & TPD to dependants) |
| TPD Definition | ❌ Limited to "Any Occupation" definition | ✅ "Own Occupation" available |
| Trauma Cover | ❌ Cannot be held inside super | ✅ Available outside super only |
| Claims Process | ❌ Must go through super trustee — can be slower | ✅ Direct claim with insurer |
- The bottom line: Many Australians have insurance inside their super by default — and that may not be enough, or may not be the right structure. The right mix of inside and outside super depends on your income, tax position, age, and goals.
The right structure depends on your circumstances — talk to an adviser.
Choosing Wisely
How to Choose an Insurer
Insurance policies can vary significantly. Understanding those differences can save you thousands — or make all the difference when you need to claim.
What Affects Your Premium?
- Age — Premiums increase as you get older
- Gender — Statistically different risk profiles
- Smoker status — Smokers pay significantly more
- Occupation — Higher-risk jobs mean higher premiums
- Health history — Pre-existing conditions may affect cover or cost
- Cover amount & type — More cover = higher premiums
Beyond the Price Tag
- PDS definitions matter — The cheapest policy may have the strictest definitions, making it harder to claim
- Claims support — How does the insurer handle claims? Do they have a good reputation?
- Policy features — Built-in benefits, indexation, guaranteed renewability
- Financial strength — Is the insurer well-capitalised and likely to be around when you need them?
Stepped vs Level Premiums
Stepped Premiums
Level Premiums
Note: Level premiums are not truly “level” — they can still increase due to CPI and insurer rate changes. But they don’t increase purely because of your age.
Expert Guidance
Why Work With an Adviser?
Access to Multiple Insurers
We review policies from across the market — not just a single bank or provider. This means you get real options, not just a sales pitch.
Tailored Needs Analysis
A thorough needs analysis considers your debts, income, dependants, existing cover, and financial goals — then recommends a level of cover tailored to your circumstances.
Claims Advocacy
When it’s time to claim, your adviser advocates on your behalf. We handle the paperwork, follow up with the insurer, and help ensure you receive the benefits you’re entitled to.
Ongoing Reviews
Life doesn’t stay the same — whether it’s a growing family, a new mortgage, or a change in career. We review your cover regularly to make sure it continues to match your needs.
- We research and compare policies across the market on your behalf.