Waiting Period

Waiting periods are a fundamental feature of Australian income protection and trauma insurance, representing the gap between when you become unable to work (or are diagnosed with a condition) and when the insurance company begins paying benefits. For income protection insurance, waiting periods commonly range from 14 days to 2 years, though 30, 60, and 90 days are most popular. During this period, you must rely on sick leave, savings, or other income sources. The waiting period you select significantly impacts your premium - a 90-day waiting period can cost 30-40% less than a 14-day waiting period, as the insurer assumes less risk. Australian financial advisers typically recommend aligning your waiting period with your available sick leave and emergency savings. For example, if you have 60 days of sick leave, a 60-day waiting period may be appropriate. For trauma insurance, the waiting period (often called a 'survival period') is usually 14 days, meaning you must survive for 14 days after diagnosis to receive the payment. This protects insurers from paying claims for immediately terminal diagnoses. Some conditions within trauma policies have specific waiting periods - for example, early-stage cancers might have a 90-day waiting period from policy commencement. Pre-existing conditions often have extended waiting periods of 12-24 months. Importantly, the waiting period restarts with each new claim period unless you have continuous coverage. Understanding waiting periods is crucial for Australian insurance buyers to ensure appropriate financial coverage during the gap period.