Income protection insurance doesn’t work the same way at 55 as it did at 35. Premiums rise sharply, cover can stop at 60, 65 or 70 depending on the policy, and the underwriting gets stricter. If you’re relying on income protection in your 50s and 60s, here’s what actually changes — and what to check on your existing policy before you assume it will still be there when you need it.
Why income protection Insurance in your 50s and 60s behaves differently
As Moneysmart explains, most income protection policies use stepped premiums, which increase every year in line with your age. That increase is gradual in your 30s and 40s but becomes steep in your 50s and 60s, because the statistical likelihood of a claim rises with age. A policy that cost a modest amount at 40 can cost several times as much by 58, for the same level of cover.
When does income protection cover actually stop?
Most policies pay benefits only up to a set expiry age — commonly 65, sometimes 70 depending on the insurer and when the policy was taken out. If your benefit period is set “to age 65” and you’re claiming at 63, your payments stop at 65 regardless of whether you’re still unable to work. It’s worth checking the exact expiry age on your policy, not assuming it matches a colleague’s or a general rule of thumb.
| Benefit period type | What it means for you |
|---|---|
| 2 years | Pays for up to 2 years per claim, regardless of age, then stops |
| 5 years | Pays for up to 5 years per claim, regardless of age, then stops |
| To age 65 | Payments stop at 65 even mid-claim |
| To age 70 | Payments stop at 70; less common and typically more expensive |
New policies also become harder to get from around 60 onward — many insurers stop offering new income protection applications altogether once you’re past that age, and the ones that do apply stricter medical underwriting and more exclusions for pre-existing conditions.
What to check on an existing policy
- Expiry age — confirm whether your benefit period ends at 65, 70, or after a fixed 2 or 5-year term, and how that lines up with your actual retirement plans.
- Waiting period — a longer waiting period (60 or 90 days instead of 30) lowers your premium, but only makes sense if you have enough savings to bridge the gap.
- Stepped vs level premiums — stepped premiums are cheaper now but rise every year; level premiums cost more today but stay flatter, which can suit someone planning to hold the policy for another 10–15 years.
- Cover held inside super — income protection through your super fund is often cheaper but usually carries its own age limits and benefit periods, separate from any policy you hold personally.
- Whether you still need it — if your mortgage is paid off, your super balance is solid, and no one depends on your income, the cover may be doing less work than the premium justifies.
Are income protection premiums tax deductible?
Premiums for income protection held outside super are generally tax deductible, because the benefit itself is treated as assessable income if you claim. Premiums paid through your super fund are not directly deductible to you personally, though the fund itself may claim a deduction, which can indirectly reduce the cost. Confirm the treatment with your accountant based on how your specific policy is structured.
Business owners and self-employed retirees approaching retirement
If you’re self-employed or run a business into your 60s, income protection interacts directly with succession planning. A policy that stops paying at 65 may leave a gap if you’d planned to keep working, or if a health event forces an earlier handover than you’d arranged. This is worth reviewing alongside your business succession plan, not in isolation.
FAQ’s of Income Protection Insurance in Your 50s and 60s
Does income protection insurance stop at a certain age?
Most policies stop paying benefits at either 65 or 70, depending on the benefit period you selected when you took out the policy. Some policies pay for a fixed 2 or 5-year period per claim regardless of your age.
Can I get new income protection cover in my 60s?
It’s possible but limited. Most insurers stop accepting new income protection applications from around age 60, and the few that do apply stricter underwriting, higher premiums, and more exclusions than they would for a younger applicant.
Is income protection worth keeping if I’m close to retirement?
It depends on whether you still rely on your income, and for how much longer. If you have dependants, debt, or a retirement plan that assumes several more years of earnings, keeping cover can still make sense — but it’s worth reviewing the cost against what’s actually left to protect.
Not sure whether your current cover still fits your situation, or whether the premium is still worth it? Speak with our Adelaide team about reviewing your income protection alongside your broader retirement plan.
