What income protection does not cover (a handy explainer)

A surprise “got a sec?” from your boss. A spreadsheet that mysteriously breaks itself. Yep - work can be a lot. But what if life throws something bigger your way, like an illness or injury that takes you out of action for a while?

That’s where income protection can help. It can keep a portion of your income coming in if you’re unable to work for a period of time due to illness or injury - so you can focus on recovery, not your next bill.

But, like most good things, income protection has its limits. So, let’s take a look at what income protection does not cover.

For information about ahm’s Income Protection product, you can take a look at the PDS(opens in a new tab).

What does income protection do? (a quick recap)

If you become unable to work because you’re ill or injured, income protection can help cover a portion of your income with ongoing payments for a set period of time.

Income protection is there to help you keep on top of the everyday stuff, like rent, groceries and bills while you’re unable to work due to illness or injury.

So, what’s not covered?

Let’s break down the “nope” list⁺.

Not working due to reasons other than illness or injury

Quit your job? Made redundant? Take a year off to “find yourself”? Income Protection generally doesn’t cover voluntary time off, unemployment or parental leave.

Pre-existing health conditions

It’s still possible to take out income protection if you have pre-existing health conditions. Insurers will ask you a series of health questions when you apply and depending on your answers, you may be required to pay higher premiums for any health conditions you have, or a specific condition may be excluded from your policy. That means you won’t be able to claim if you’re prevented from working due to that particular condition. Australian regulations require you to take reasonable care not to make a misrepresentation to the insurer which basically means you must answer the questions truthfully.

Self-inflicted injuries

If an injury is self-inflicted, it’s generally not covered under most policies.

High risk activities

If you love a dash of danger, say, deep-sea wrestling (okay, maybe not that one), and it leads to injury that leaves you unable to work, that could impact your claim. If you’re into adventurous activities, it’s worth checking your policy details to see what’s covered and what’s not.

Conditions you recover from quickly

Income protection isn’t for every bump or sniffle. It’s typically aimed at more serious injuries or illnesses that stop you from working for weeks or months, not just a couple of days. You can choose from a range of different waiting periods; these are the period of time you need to be not working due to injury or illness before a benefit is paid to you. 

What if you return to work part-time?

If you’re able to return to work part-time but are still partially disabled, you could be eligible for partial payments, a handy bridge while you get back on track.

Final thoughts

Income protection can help give you breathing space when life throws a curveball, but it's not designed for every scenario. A quick read of the exclusions, terms and conditions within the PDS(opens in a new tab) can help set the right expectations to understand what’s not covered.

Interested in ahm Income Protection?

With ahm Income Protection, you can get cover for up to 70% of your monthly pre-tax income (up to $10,000 per month)*, and you can choose a benefit period of either 2 or 5 years^.

Just follow the link below, answer a few questions, and you’ll get a quote in no time.

Get a quick quote online now(opens in a new tab)

You can also contact us on 1300 867 125 if you have any questions.