Retail Insurance

Retail insurance (also called individual insurance or standalone insurance) is personally owned insurance purchased directly from insurance companies or through financial advisers, as opposed to group insurance through super funds or employers. Retail policies are individually underwritten based on your specific circumstances including age, health, occupation, lifestyle, and coverage needs, resulting in tailored protection rather than one-size-fits-all group coverage. Key advantages of retail insurance include: more comprehensive policy definitions (particularly 'own occupation' TPD rather than 'any occupation'), higher coverage limits suitable for high earners or those with significant debts, greater flexibility to customize waiting periods, benefit periods, and optional benefits, portability (coverage continues regardless of employment or super fund changes), individual risk pricing (healthy non-smokers often pay less than group policy averages), and ownership certainty (you control the policy directly). Retail insurance is particularly valuable for business owners, self-employed professionals, high-income earners, specialists in specific occupations, and anyone wanting comprehensive protection beyond basic group coverage. Premiums are paid from after-tax income (though income protection premiums are tax-deductible), and policies remain in force as long as premiums are paid. The main disadvantages compared to group/super insurance include higher apparent premiums (though tax-deductibility and tailored coverage can offset this), medical underwriting required (health issues may result in exclusions or declined coverage), and active management required (you must maintain premium payments directly). Most Australians benefit from combining group insurance (through super) for baseline protection with retail insurance for comprehensive coverage. Financial advisers often recommend retail insurance for life, TPD, and trauma coverage, while potentially retaining income protection through super if definitions are adequate.