If anyone depends on your income — a partner, children, or ageing parents — life insurance provides a financial safety net. If you have a mortgage, it can ensure your family keeps the home if you pass away. Default super cover is often insufficient. A general rule of thumb is 10–12 times your annual income, adjusted for your specific debts and dependants.
What's the difference between life insurance inside and outside super?
Inside super: premiums deducted from your balance (no out-of-pocket cost), tax-effective, but usually 'any occupation' TPD only and payout restricted by SIS Act. Outside super: broader features, pay to any beneficiary, own-occupation TPD available, income protection premiums tax-deductible. Many advisers recommend combining both approaches.
When should I get private health insurance?
Two key incentives apply: (1) The Medicare Levy Surcharge — if your income exceeds $93,000 single/$186,000 family and you lack hospital cover, you pay 1–1.5% extra tax; (2) Lifetime Health Cover loading — 2% extra per year on premiums for every year over 30 without hospital cover, up to 70%. Getting cover before age 31 is financially sensible for most Australians.
What does home insurance actually cover? Is flood included?
Standard building insurance covers fire, storm, theft and listed events. Flood cover varies significantly — storm water runoff is often covered, inland flooding from rivers is sometimes excluded, and storm surge from the sea is often excluded in coastal areas. After the 2022 east coast floods awareness increased. Always read the PDS flood definition carefully if you live near a waterway.
What business insurance does a sole trader need?
Most sole traders should consider: (1) Public Liability — $5M–$10M minimum, required by most clients and venues; (2) Professional Indemnity — essential if you give advice or professional services, as claims can arise years after the work; (3) Income Protection — no employer sick pay exists; pays up to 70% of income if you can't work, and premiums are tax-deductible.
What is CTP insurance and is it compulsory?
Compulsory Third Party (CTP) — the Green Slip in NSW — is legally required to register a vehicle in Australia. It covers injury compensation for people hurt in accidents caused by your vehicle. It does NOT cover vehicle or property damage. Each state has its own scheme with different providers and pricing. CTP is separate from comprehensive car insurance.
How much life insurance do I actually need?
A common rule of thumb is 10–12 times your annual income, adjusted for: outstanding mortgage and debts, number of dependants and their financial reliance timeline, your partner's income, existing super balance and assets, and any existing cover in super. A licensed broker can calculate a precise figure based on your actual situation.
Can I claim income protection premiums as a tax deduction?
Yes — income protection premiums held outside superannuation are generally tax-deductible as a personal expense. This effectively subsidises the cost by your marginal tax rate. Life insurance, TPD and trauma insurance premiums outside super are generally NOT tax-deductible. Always confirm with your accountant.
What is Professional Indemnity (PI) insurance?
PI covers claims that your professional advice, services or work caused a client financial loss. Essential for lawyers, accountants, architects, IT consultants, designers, financial advisers and many others. Even excellent work can result in a claim — PI covers your legal defence costs and any compensation awarded. Many licensing bodies require minimum PI cover to practise.
What is the difference between agreed value and indemnity income protection?
Agreed value policies (largely phased out for new policies post-2021 APRA changes) locked in the sum insured at policy inception. Indemnity value policies pay based on your actual income at claim time — if your income has dropped, your benefit may be lower than you expected. Most new policies are indemnity-based. Keep your income documentation current.
Do I need travel insurance for domestic travel in Australia?
Medicare covers medical treatment in Australia, reducing the medical risk for domestic travel. For non-refundable bookings, prepaid tours or activities, domestic travel insurance protects against cancellation costs, lost luggage and emergency accommodation. Check your credit card's PDS — many premium cards include domestic travel cover.
How does the government private health rebate work?
The Australian Government provides an income-tested rebate on private health premiums. Base Tier (income up to $93k single) receives approximately 24.6% rebate. Higher income tiers receive progressively less, and the highest earners receive no rebate. You can claim as a premium reduction (fund applies it directly), tax offset when filing, or refund via the ATO. Rebate percentages are adjusted annually on 1 April.
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⚠️ General information only. The answers on this page are for general educational purposes. Insurance products, thresholds and rules change regularly. Always consult a licensed insurance broker for advice specific to your circumstances.