Being your own boss has its perks. Flexibility, autonomy, and the chance to shape your own future. But it also means taking on more responsibility, especially when it comes to protecting your income. If illness or injury stops you from working, how would you manage regular bills, business costs or support your family?
That’s where income protection insurance comes in. For self-employed people, it can be an important financial safety net, offering support when you need it most.
What is income protection?
Income protection insurance is designed to replace part of your income if you can’t work due to illness or injury. With Medibank Income Protection, subject to eligibility, you can choose to insure up to 70% of your pre-tax monthly income, up to a maximum of $12,500 per month, depending on your age and income at the time of application.¹
This benefit can help cover living costs, loan repayments and essential expenses while you focus on recovery.
What if I am self-employed?
If you’re self-employed you can still apply for income protection, but there are some unique eligibility criteria and considerations to be aware of. Insurers will generally want to see that you’re 'gainfully employed'. That is, working for gain or reward in any business, trade, profession, vocation, occupation or employment. They’ll also look for evidence of business stability and proof of income.
When applying, you’ll likely need to provide:
- Recent tax returns.
- Business financial statements.
- Proof of ongoing work or contracts.
Because self-employed income can fluctuate, insurers may average your earnings over a period to determine your benefit amount. If your income is highly variable or your occupation is considered high risk, you might face additional questions or higher premiums. It's important to be honest. Providing accurate information about your health, lifestyle, and work helps ensure your policy is valid and claims are processed smoothly.
The value of income protection for self-employed people goes beyond just the financial. It’s about helping to maintain stability, safeguard your business, and support for your family during challenging times. For many, it’s a way to protect years of hard work and ensure that a temporary setback doesn’t become a long-term crisis.
How Medibank Income Protection works?
With Medibank Income Protection, the application process is similar whether you’re self-employed or employed. You’ll be asked to enter your annual pre-tax income. For self-employed people, that simply means your share of the income your business or practice earns, minus your share of the business expenses needed to generate that income.
At claim time, we’ll calculate your benefit based on your income in the 12 months just before your disability began. The maximum amount we’ll pay is the monthly benefit shown in your most recent policy schedule.in the 12 months just before your disability began. The maximum amount we’ll pay is the monthly benefit shown in your most recent policy schedule.
What you may also need to consider when choosing income protection?
Here are a few things to also keep in mind if you're self-employed and considering income protection.
- Waiting period: choose how long you’d need to wait before your income protection payments begin. With Medibank Income Protection, you can choose a waiting period of 30 or 90 days.² With Medibank Income Protection, you can choose a waiting period of 30 or 90 days.²
- Benefit period: how long do you want payments to last if you can’t work? With Medibank, you can choose a benefit period of two or five years.²
- Premium structure: insurers may offer two types of premiums: 1) variable stepped premiums, like those available under Medibank Income Protection, where your premium increases each year as you get older can be affected by inflation and changes to your cover, and 2) variable premiums, where your premium generally won’t increase as you get older, but can be affected by inflation and changes to your cover.
- Exclusions: are there any conditions or activities not covered? Yes, exclusions and not covered events will differ between income protection products. Please refer to the Medibank Income Protection PDS for a full list of exclusions.
Some policies, such as Medibank Income Protection also come with additional benefits, like a pause in premiums during hardship or interim accident cover while your application is being assessed.
Helping you prepare for the unexpected.
For those who are self-employed, income protection can be a practical way to help safeguard financial stability. If illness or injury stops you from working, it can help cover your bills, support your family, and take the pressure off you financially.
Everyone's situation is different, so it’s worth thinking about your budget, financial commitments, and how much risk you’re comfortable with. That way, you can choose the right level of cover to suit your lifestyle and give yourself one less thing to worry about.
How do I find out more?
Thinking about income protection? Take a look at the Medibank Income Protection PDS. You can also get a quick quote online or call the Medibank team on 1300 152 271 if you’d like to talk to us.
Things you should know
1 Eligibility criteria apply. Pre-tax income if defined in the PDS.
2 Choose a benefit period of 2 or 5 years and a waiting period of 30 or 90 days.
Medibank Life Insurance and Medibank Income Protection (collectively Medibank life insurance) are issued by the insurer, Zurich Australia Limited ABN 92 000 010 195 AFSL 232510 (Zurich). NEOS Direct, a registered business name of NDLI Pty Ltd ABN 70 665 747 277 AFSL 547119, distributes and services Medibank life insurance, which is promoted by NEOS Direct's authorised representative Medibank Private Limited ABN 47 080 890 259 (AR No. 286089) (Medibank).
Any advice provided is general only and doesn’t consider your objectives, financial situation or needs. You should consider these factors, the appropriateness of the advice, and carefully read the relevant Product Disclosure Statement (which sets out the product terms, conditions and exclusions), Target Market Determination and Financial Services Guide before making a decision to acquire, or continue to hold, the product.
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