The SMSF Master Insurance Plan offers three waiting periods — 30, 60, or 90 days. The waiting period is how long you have to be totally disabled before benefits start accruing. A longer waiting period means lower premiums but more time without income at the start of a claim.
What actually is waiting period
The waiting period is the number of continuous days you need to be Totally Disabled before income protection benefits start accruing. If you have a 30-day waiting period and you become unable to work on day one, the policy starts paying you (in arrears) from day 31. With a 60-day waiting period, you’d be waiting until day 61, and so on.
The waiting period acts as a deductible — you cover the gap yourself, and the insurance kicks in after that. Just like with car insurance, choosing a higher deductible means lower premiums; same principle applies here.
Under the SMSF Master Insurance Plan available through SMSF Insurance, you can choose from three waiting period options: 30 days, 60 days, or 90 days.
When the waiting period starts
This is worth getting clear on. Under the SMSF Master Insurance Plan, the waiting period starts from the later of:
- The date you’re first examined and certified by a medical practitioner as Totally Disabled in relation to the injury or sickness that gave rise to the claim
- The date you ceased work due to that injury or sickness
There’s also a helpful rule: if you consult a medical practitioner within seven days of ceasing work, the waiting period commences from the date you stopped working — not the date you saw the doctor. So the practical advice is, if you’re unable to work, see a doctor promptly to lock in the earlier start date.
The 30, 60, 90 day trade-off
Each waiting period option has its place:
30-day waiting period
Highest premiums of the three options, but the shortest gap before benefits start. Suited to members with limited savings, high regular expenses, or no ability to manage a longer income gap. The 30-day option is particularly useful if you don’t have a sick leave entitlement (self-employed, contractors, business owners).
60-day waiting period
Middle-tier premiums. Suited to members with some savings and possibly some sick leave entitlement. The 60-day option is a reasonable balance for many salaried employees.
90-day waiting period
Lowest premiums of the three. Suited to members with substantial savings, generous sick leave entitlements, or other income sources that could bridge a longer gap. Salaried professionals with 12+ weeks of accrued sick leave often choose this option.
How to think about choosing
Three factors matter:
- Your savings buffer — How long could you go without income before serious financial pressure hits? If three months of expenses is comfortable, the 90-day waiting period is workable. If two weeks would be tight, you need a shorter waiting period.
- Your sick leave entitlement — Employees with accrued sick leave have a built-in buffer. Self-employed members generally don’t.
- Premium differential — Going from 30 to 60 days produces a noticeable premium saving, and 60 to 90 produces another step down. The exact difference depends on your age, occupation, and cover level — worth running through a quote to see your specific numbers.
Return to work during the waiting period
The PDS has a useful provision for this. You’re permitted to attempt to return to work once during the waiting period, performing your usual duties for up to five consecutive days. If your attempt at returning to work is unsuccessful and you go back off work within the waiting period, here’s how it works:
- If you returned to work for five consecutive days or less, the waiting period is extended by the number of days you attempted to return
- If you returned to work for more than five consecutive days, the waiting period starts again
This provision exists so members can try to get back to work without losing their place in the waiting period if the attempt doesn’t stick. It’s a member-friendly rule that’s worth knowing about.
Recurrent disability rule
Another useful provision. If you return to work after receiving income protection benefits, and within 12 months you make another claim for the same or related cause, the new claim is treated as a continuation of the previous one. The waiting period is waived for that recurrent claim, though the benefit period is adjusted to account for what’s already been paid.
If the gap between claims for the same or related cause is more than 12 months, the new claim is treated as fresh — waiting period restarts, benefit period treated as new.
Choosing the right waiting period for your situation
As a rough rule of thumb:
- Self-employed without significant savings: 30 days
- Self-employed with strong savings: 60 days
- Salaried employee with some sick leave: 60 days
- Salaried employee with significant sick leave and savings: 90 days
Through SMSF Insurance, you can quote all three options and compare the actual premium differences for your situation before deciding
| Get cover with the right waiting period
Choosing between 30, 60 or 90-day waiting periods is part of structuring your income protection. Quote all three options through SMSF Insurance and pick what fits your situation. |
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