How to Navigate Income Protection Waiting Periods as a FIFO Worker

For FIFO workers, income protection insurance is a critical financial safety net. However, understanding and selecting the right waiting period can significantly impact both your premium costs and financial security during times of illness or injury.

What Is a Waiting Period?

A waiting period (sometimes called the excess period) is the time between when you become unable to work due to illness or injury and when your income protection benefits begin to pay out. As a FIFO worker with unique work patterns, choosing the right waiting period requires careful consideration.

Common Waiting Period Options

Most insurers offer several waiting period options, including:

• 14 days
• 30 days
• 60 days
• 90 days
• 180 days
• 1 year
• 2 years

The shorter your waiting period, the higher your premium will be. Conversely, longer waiting periods typically result in lower premiums.

Special Considerations for FIFO Workers

Roster Patterns Matter

Your FIFO roster directly impacts which waiting period makes the most sense. For example, if you work a 2-weeks-on, 1-week-off roster, a 30-day waiting period might align better with your work schedule than a 14-day period.

Sick Leave Entitlements

Many FIFO employers offer generous sick leave provisions. Before selecting a waiting period, review your employment contract to understand:

• How much sick leave you’re entitled to
• Whether sick leave accumulates
• If you can access sick leave during your time off

If you have substantial sick leave available, you might comfortably opt for a longer waiting period.

Emergency Funds

FIFO workers typically earn higher-than-average salaries, which can provide an opportunity to build a solid emergency fund. If you’ve established a financial buffer that could cover 3-6 months of expenses, a longer waiting period might be appropriate.

Finding the Right Balance

When selecting a waiting period, consider:

1. Cash flow requirements: How long could you manage without income?

2. Savings buffer: What emergency funds do you have available?

3. Roster pattern: How does your work schedule align with potential waiting periods?

4. Premium costs: How much can you afford to pay for coverage?

For many FIFO workers, a 30 or 60-day waiting period offers a good balance between affordable premiums and reasonable protection. However, your personal circumstances might warrant a different choice.

Other Income Protection Features to Consider

While waiting periods are important, also pay attention to:

• Benefit period: How long benefits will be paid (typically 2 years, 5 years, or to age 65)
• Agreed value vs indemnity: Whether benefits are based on income at application time or claim time
• Specific occupation definitions: Ensuring coverage aligns with your specific FIFO role
• Mental health coverage: Critical for FIFO workers who face unique mental health challenges

The complexity of FIFO work patterns means generic insurance advice often falls short. At Absolute Insurance, we understand the unique challenges and opportunities of FIFO employment and can help you select income protection coverage that aligns with your specific situation. Contact our team for a personalised consultation about income protection insurance tailored to your FIFO lifestyle.

Related posts:

• Crucial Insurance Tips for FIFO Workers in Australia
• What Life Insurance Products Are Needed by FIFO Workers?

Reviewed by Greg Maguire

Greg Maguire reviewed this article to make sure the information is accurate and reflects current insurance practice. It is general advice only and does not take your personal circumstances into account.

Greg Maguire is an Authorised Representative (No. 255354) of AD Advisory Services Pty Ltd, ABN 68 005 830 802, AFSL 237058.

Greg Maguire

Principal

Greg Maguire is the founder and principal of Absolute Insurance, a family-run Perth life insurance broker he runs with his wife Steph. Greg has spent more than 20 years helping Western Australian families and business owners protect what matters most, with life insurance, income protection, TPD and trauma cover from Australia's leading insurers.

Before insurance, Greg was a primary school teacher, and that same patient, one-to-one approach is how he still works today. He takes the time to understand your situation, explains your options in plain English, and stands beside you and your family if you ever need to claim.

Greg holds an Advanced Diploma of Financial Planning from Deakin University and a bachelor's degree from Edith Cowan University. He is an active member of the local community through the Chamber of Commerce and Industry WA and Baldivis Rotary.

Greg Maguire is an Authorised Representative (No. 255354) of AD Advisory Services Pty Ltd, ABN 68 005 830 802, AFSL 237058.