Question 1

What is the difference between income protection and disability insurance?

Accepted Answer

In practice, they're similar — both replace income if you can't work. 'Income protection' is more common in the UK/Australia terminology and often covers any inability to do your job. 'Disability insurance' is the US term and typically has stricter definitions of disability.

Question 2

How long does income protection pay out?

Accepted Answer

Policies can pay for 1 year, 2 years, 5 years, or to age 65 (full term). Longer payment periods cost more. For catastrophic scenarios (serious illness, permanent injury), a full-term policy to age 65 provides the most comprehensive protection.

Question 3

What waiting period should a freelancer choose?

Accepted Answer

Match your waiting period to your savings. If you have 3 months of expenses saved, a 13-week waiting period cuts your premium by 30–40% vs a 4-week waiting period. If your savings cover 6 months, a 26-week wait is the most cost-efficient.

Question 4

Is freelance income protection tax deductible?

Accepted Answer

In most countries, premiums paid personally are not deductible, but benefits are received tax-free. Through an employer structure, premium deductibility varies. Consult a tax advisor for your jurisdiction.

Question 5

What conditions does income protection cover?

Accepted Answer

Covered events typically include: serious illness (cancer, heart disease), accidental injury, mental health conditions (with appropriate waiting periods and documentation), and pregnancy complications. Pre-existing conditions are usually excluded or covered after an exclusion period.

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