Act Now: Changes to Income Protection Insurance

By Cutcher & Neale Accounting and Financial Services - May 27, 2021

All new income protection insurance policies will change forever from 1 October 2021 as a result of recent intervention by APRA to create a more sustainable life insurance industry.

If you’ve been considering income protection you should act well in advance of the deadline - this is not a 5-minute process!

So - what’s changing?

Claims Criteria

Future - Claims criteria will be based on the “immediate 12 months earnings prior to disability”.
Current - The “best rolling 12 months over the preceding three years” rule provides greater financial flexibility.


Future - Claims proceeds to be capped and will reduce over time.
Current – Generally policies make a payment for up to 75% of your income plus superannuation while you remain on claim.

Disability definitions

Future - Disability definitions used will be more difficult to satisfy and vary depending on the length of time on claim.
Current – Definitions are market leading and what you signed up to initially, for the life of the contract.


Future (By October 2022) – 5-year policy renewals when current occupation and financials will be required – any new policy conditions at this time will apply.
Current - Contract conditions are “guaranteed renewable” – that is, set and forget.

In practical terms, these changes will result in significantly watered-down policies compared to what is currently available in the market. This is why you need to take action now if income protection has been on your list of 'things to do'.

Cutcher & Neale recommends all eligible clients consider income protection. It just makes good financial sense for you to insure what is arguably your most valuable asset – the ability to provide an income.

If you would like help to navigate your way through or simply a review of your current personal insurance, please get in touch with our in-house team of specialists as soon as possible so we can assist before time runs out.

To request an income protection insurance review visit:

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