Why Your Older Income Protection Policy Could Be Worth Keeping
If you've held an Income Protection policy for several years, you've probably noticed premiums have increased. It's completely understandable to question whether the policy is still worth keeping.
However, before making any changes, it's worth asking a different question:
Could You Buy the Same Cover Today?
For many Australians, particularly professionals, business owners and those with variable incomes, the answer may be no.
Income Protection policies issued before the major industry reforms in October 2021 often included features that are no longer available or are more limited in today's market.
What Makes Older Policies So Valuable?
Depending on the policy, older Income Protection contracts may include:
More generous income replacement benefits
Better treatment of fluctuating income
Stronger disability definitions
Enhanced partial disability benefits
More generous rehabilitation and ancillary benefits
Greater certainty around long-term claims
These features can make a significant difference when a claim is made and, in many cases, cannot be replicated under current policy designs.
Don't Let Premiums Tell the Whole Story
Many policyholders consider replacing their cover after receiving a premium increase. While affordability is always important, a lower premium doesn't necessarily mean better value.
A newer policy may cost less because it offers reduced benefits, tighter policy definitions or less certainty at claim time.
When comparing policies, it's important to look beyond the premium and understand what protection may be lost by replacing existing cover.
Not All Income Protection Policies Are the Same
Although all insurers now operate within the same regulatory framework, significant differences remain between providers.
Areas that can vary include:
Income definitions
Treatment of self-employed and business income
Disability assessments
Benefit structures
Claims provisions
Additional policy features and flexibility
As a result, two policies with similar premiums can deliver very different outcomes when they're needed most.
Before You Make a Change, Know What You Have
An older Income Protection policy may be one of the most valuable financial assets you own. While rising premiums can be frustrating, many existing policies continue to provide protections that are no longer available in today's market.
Before cancelling, reducing or replacing your cover, it's important to understand exactly what you have and what you may be giving up
We're Here to Help
If you're wondering whether your policy is still right for your needs, or you'd simply like a second opinion on the value of your existing cover, our friendly Risk Team is always here to help. We can review your current arrangements, explain the differences between older and newer policies, and help you make an informed decision with confidence.
Ready to review your cover?
Contact today to better understand your existing Income Protection cover and the options available to you before making any decisions.