The usual places to buy income protection is either from a broker or from a bank. Buying income protection from a bank usually means buying other services too. Banks include income protection along with other pay services when they process loans such as mortgages.

If you were to walk in off the street and ask just to buy income protection from a bank, it is very likely that they would not be able to sell you income protection. Utilizing the services of an insurance broke eliminates the need to buy multiple products or services to obtain income protection insurance.  Most brokers if not all will simply sell you a policy.

Benefits of Using A Broker

It also makes sense from a consumer point of view to deal with an insurance broker because they are used to dealing most if not all of the aspects of the policies that they sell. That is not always true of banks. Buying insurance can be a complicated ordeal. Using the services of an insurance broker can help alleviate the frustrations of filling out long applications.

Insurance agents are professionals who make their living by helping people find the coverage that they need. It is that professionalism that makes insurance agents the better choice for people who are looking for insurance protection.

A powerful benefit that is gained when consumers use an insurance broker is that most insurance companies offer many different types of the same insurance policy. Independent brokers may represent many different underwriting firms. This means that using an insurance broker can add variety and value to the consumer. A bank usually sells their own brand or a partnering companies brand of insurance. That single type of policy is not always the best choice every consumer.

Income insurance can be complicated, and that is yet another reason why using a broker is beneficial to the consumer. There are benefits that consumers should think about adding to their income protection plan. One example is whether or not the consumer wants the policy to pay its own premium in the event that a claim is filed and paid.

Sitting down and talking over policy options with a broker can help consumers find all policy add-ons that they may need. For those of you who are not familiar with how income protection works, consider the following.

How is Annual Income Determined?

Income protection pays a monthly payment to the policy holder in of a disabling injury or illness that is not work related. The monthly payment is based on the policy holders annual income; however, how the annual income is determined can be complicated. Using a broker will help consumers to find the best policy. Some policies use a formula that basis current annual income as a combination of the last 36 months of income. They then pick the lowest 12 month segment to determine annual income. A broker can help to explain how annual income is formulated and whether or not one policy formulate annual income higher or lower than another policy.

There are other considerations and policy choices that consumers many need a broker to explain. For example, sometimes an income protection policy covers only a specific job. If you are promoted to a new job, your income protection may not cover that job or changes in income. Being able to decide if your policy should cover a specific job title or all job titles is important.

Policy length is also a critical aspect that should be discussed with a broker. Some income protection plans cover the holder until they retire at age 65. Other income protection policies may only cover the holder for two, five, or ten year periods.

Different types of policies pay different amounts. Indemnity policies pay 75% of your current annual income to the holder; whereas, an agreed value policy pays a predetermined amount that the policy hold is aware when they take out the policy. With an indemnity policy, you may be paid less than expected if you have had a drop in income. The key word is current annual income. Finding the tricky language that is contained within a policy is also something that a broker can help consumers understand.


There are many reasons to use a broker when shopping for income insurance. The variety of types of policies offered is one of the major reasons to use a broker. Consumers who want income protection can find that a broker can help them to navigate the confusing and complex process of buying insurance.