Why Income Protection Matters in Your 40s
For many Australians, their 40s bring heightened financial responsibility. You may be:
- Supporting children and education costs
- Paying down a mortgage or investment debt
- Running a business or being self-employed
- Planning for retirement and wealth preservation
At the same time, the likelihood of illness or injury increases compared to your younger days.
If your income stopped for six months or more, could you continue to support your family, service debts, and stay on track for retirement?
Income protection insurance can replace up to 70% of your income, helping you meet essential costs while you recover.
How Much Does Income Protection Cost in Your 40s?
Premiums in your 40s are typically increasing due to age and increased health risks.
Average Monthly Premiums (Indicative Only)
Sum Insured $4,000, 2 months waiting, 2 year benefit. Based on insurer data at Jan 2026. Actual premiums depend on occupation, health, benefit amount, waiting period, and policy structure.
| Age Band | 40-44 | 45-49 |
|---|---|---|
| Male Non-Smoker | $36 | $48 |
| Male Smoker | $51 | $68 |
| Female Non-Smoker | $51 | $69 |
| Female Smoker | $69 | $98 |
💡 Insight: If premiums are a consideration, consider balancing benefit period length and waiting period rather than reducing cover altogether. A shorter benefit period can lower premiums - but may expose you to long-term risk if you're unable to return to work.
What to Consider When Applying in Your 40s
Health and Underwriting
Earlier action in your 40s can still secure better terms than waiting until your 50s. A key benefit under Australian law if “guaranteed renewability” - this means once you have a life insurance policy, changes in your own health will not impact your premium.
- Pre-existing conditions are more common in this age group compared to younger age groups
- Full disclosure is essential - non-disclosure can jeopardise claims or even void your policy
- Policies may include exclusions or premium loadings depending on medical history
Waiting periods
The waiting period is the time between becoming unable to work and receiving benefit payments.
Common waiting periods in your 40s:
- 30 days
- 60 days
- 90 days
Consider:
- Available sick leave
- Emergency savings
Longer waiting periods reduce premiums but require greater short-term resilience.
Benefit periods
The benefit period determines how long payments continue once a claim is approved.
Common benefit periods include:
- 2 years
- 5 years
- To age 65
Consider:
- Many policies require you to participate in rehab and other return to work activities.
- Some longer running policies change to an any occupation assessment after 2 years which may impact your claim eligibility.
Longer benefit periods attract higher premiums.
Paying for Income Protection Through Superannuation
Using super to fund income protection premiums can help manage cash flow, but it comes with trade-offs.
Key considerations:
- Claims must meet the superannuation definition of temporary incapacity
- Premiums reduce retirement savings
- Policies inside super may have limited features There are strategies that allow premiums to be largely funded via super while avoiding certain claim restrictions.
Learn more about paying for cover through superannuation in our guide.
Combining Income Protection and TPD in Your 40s
Income Protection and Total & Permanent Disability (TPD) insurance can work together as part of a broader protection strategy.
- Income Protection: Supports income loss and recovery
- TPD: Provides a lump sum to replace your future income if you're permanently unable to work again
🧩 Common Strategy Options
📆 Standalone Income Protection to Age 65
- Ongoing income replacement
- Subject to regular claim reviews
- Many policies shift to an any occupation definition after two years
- Policy value may reduce over time
- Consider claim escalation and super contributions
🧾 Standalone TPD
- Lump sum benefit for permanent incapacity
- Higher hurdle to claim as requires the disability to be “permanent”
- Often takes longer for insurers to pay the claim
- Requires careful financial management once paid
🔄 Combined Strategy: Short-Term IP + TPD
- Faster access to support during illness or injury
- Supports family through early illness and rehab
- Long-term financial safety net if returning to work isn't possible
Note: Many 2-year Income Protection claimants don't return to work
Is Income Protection Insurance Worth It in Your 40s?
For many Australians, income protection remains one of the most practical forms of personal insurance - particularly if you still rely on your income to meet everyday expenses, support family, service debt, or save for retirement.
Cost vs Benefit Example (Illustrative)
| Scenario | Monthly Premium | Potential Monthly Benefit | Annual Benefit Value |
|---|---|---|---|
| 45-year-old Male Non-smoker earning $70,000 | ~$42 | ~$4,000 (70%) | ~$48,000 |
Notes:
- A policy like this could help preserve cash flow and retirement savings during extended time off work
- Premiums may be tax-deductible when held outside super (subject to personal circumstances)
Checklist: Is Income Protection Worth It for You?
Income protection may be worth considering if:
- ✅ You rely on your income to pay mortgage, rent, or living costs
- ✅ You're self-employed, a contractor, or have limited sick leave
- ✅ Your household would struggle financially without your income
- ✅ You want to avoid drawing down super or relying on Centrelink
- ✅ You still have financial dependants or debt
It may be less relevant if:
- 🚫 You're financially independent
- 🚫 You have substantial passive income or liquid assets
- 🚫 You're covered by a generous, guaranteed employer scheme
Want a personalised estimate? Try this quick calculator.
Frequently Asked Questions
Summary - What Makes Income Protection in Your 40s Different?
- Premiums are higher but often manageable with smart structuring
- Underwriting is more detailed and health-focused
- Strategy and policy design matter more than ever
Final thought:
Income protection in your 40s isn't just about replacing income - it's about protecting everything you've worked to build.