# Income protection insurance?



## Jack Malarkey (Jan 11, 2016)

Is income protection insurance available to Uber and taxi drivers in Australia?

By income protection insurance, I mean insurance that pays a regular income (for example, 80% of regular earnings) where income is lost because of illness or injury or perhaps because you can't drive your car because it needs to be repaired following a collision.

I'd be grateful for any information about your experience with this kind of insurance, including whether it's part of your car insurance or whether you have taken out a separate policy.

I propose to do some later research in this area myself but would be grateful for preliminary comments that would help guide that research.


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## Jack Malarkey (Jan 11, 2016)

The High Court of Australia has held that the cost of income protection policies of the kind outlined in my original post is tax deductible and that the regular payments payable under the policy (if received) are assessable income.

The case was Federal Commissioner of Taxation v Smith [1981] HCA 10; (1981) 147 CLR 578: http://www.austlii.edu.au/au/cases/cth/HCA/1981/10.html.


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## UberDriverAU (Nov 4, 2015)

You can usually get Income Protection insurance through your super fund. It usually covers temporary and permanent disability, so you'd need separate coverage for loss of income from asset damage.


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## GPH (Dec 1, 2016)

Income protection insurance via your super fund will invariably be of a poorer quality than a properly advised product . That said you may in fact be able to use it as your cover, however before you just go your merry way way, you need need "proper" advice.
Do NOT believe the TV advertising, Direct (E.g. "Real Insurance") insurers do NOT in fact provide a better option in either price or quality. 
Now to your specific enquiry.
"If" you're already insured (as the vast majority of Australian workers are) via your Superannuation insurer, you should consult the policy wording to see if there are any restrictions or exclusions (other than the standard self inflicted etc)
Again, I would really suggest that if you don't already have a licensed (financial) adviser, you should t least consult one , even if only the once.
The fact is , there will mostly be no standard answer to your question as all circumstances are different, and a tailored solution will be what generally works best.
A licensed adviser has a duty of care referred to as "Best Interst" duty.
A (reputable) qualified adviser will do most of the following before making a recommendation.

Have a conversation where he / she will discuss your overall needs and ask the following questions.
Income , from all sources
Hours per week worked (in all occupations)
Occupation (if you do something other than driving as well)
Some proof of the hours worked, and the time frame of that work .
Employment status as opposed to employment type. I.e are you self employed? An employee etc.
Current debt levels, E.g. Mortgage etc.
State,wants of all and any superannuation policies you have. (This is really important, you may be paying for IP that may not actually pay out in a claim)
In addition to that, additional basic information like DOB, smoker status, any family history with pre existing health issues and / or previous claims.

Remember if you're working Uber full time, and have been driving for less tha 6-12 months, any formal application may be effected by what's described as "newly self employed " clauses. This can limit the cover type and benefit period initially.
IP is issued as a "Non Cancellable" policy, that means the insurer cannot opt out of the policy if they no longer like the risk.

This is different again from a GI ( General Insurance) product, usually NOT sold (advised) by a licensed adviser. These policies can be cheaper, but just like your car insurance are "Yearly Renewable". Due to the more lax nature of the underwriting process, they are also not that cheap. They are also much easier to decline at claim time. When you receive your renewal notice you are under an obligation (just like your car insurance) to advise the insurer of all and any "relevant" changes in your health, occupation etc.

I don't know if you're looking for a "Quick Fix" or not, but understand this , life insurance (Income Protection) is a product where most of the time, what you pay, reflects what you get. (Term life cover notwithstanding) .

If you do not have an adviser who you believe is capeable and / or you want a second opinion, you can PM me and I will talk to you off line.

A bit about me:
I have been providing specialist Life and superannuation advice for 33 years.
I am self employed and I'm based on the east side of brisbane (south of the river).
If anyone wants to contact me, I am happy to provide an initial assessment of their situation, with no fee or obligation to form a professional relationship. 
I hope this has been of some assistance to you, I'm sorry if I can't be more specific or definitive.

Disclaimer:
Please also note that the above information does not constitute formal advice and that any advice I provide would be based on your individual circumstances and that the information above is general in nature and cannot be relied upon when making a personal insurance or superannuation decision.


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## Jack Malarkey (Jan 11, 2016)

GPH, many thanks for this comprehensive and very helpful reply.


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## GPH (Dec 1, 2016)

UberDriverAU said:


> You can usually get Income Protection insurance through your super fund. It usually covers temporary and permanent disability, so you'd need separate coverage for loss of income from asset damage.


It usually covers total (and partial depending on the policy) and temporary disability. However the definition is more accurately: the inability (due to sickness or accident) to perform the duties of your own occupation.


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## UberDriverAU (Nov 4, 2015)

GPH said:


> It usually covers total (and partial depending on the policy) and temporary disability. However the definition is more accurately: the inability (due to sickness or accident) to perform the duties of your own occupation.


Cheers for the insights GPH. As with everything I guess, knowledge is king when it comes to this. Some people are ok having no insurance at all, some will find their super's insurance perfectly fine and better than nothing, and others will want insurance that offers more than a super based policy can offer. The obvious benefit I can think of comparing super based to retail insurance is you don't need to put your hand in your pocket to pay for it, so it's easier on the cash flow. As with all insurance though, make sure you thoroughly read any and all Product Disclosure Statements so you know what you're getting yourself in for.


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## Drivingthecattlehome (Sep 13, 2016)

Had a friend use the benefits of income protection insurance for a genuine claim
They promise everything and deliver very little. She had a lengthy apclaim process with lots of paper work required. She said it was not worth it I the end.


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## GPH (Dec 1, 2016)

Drivingthecattlehome said:


> Had a friend use the benefits of income protection insurance for a genuine claim
> They promise everything and deliver very little. She had a lengthy apclaim process with lots of paper work required. She said it was not worth it I the end.


After over 30 years experience with this, that would be an unusual outcome. 
However way too little information (in this instance) to make an assessment on the veracity of the example. 
In my experience there is way more to the story than is actually revealed by the person concerned. That said I am not making any negative assertions about your friend.


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