Adviser News

Agreed value and indemnity insurance explained

Think you know all there is to know about Income Protection? While you’ll be familiar with sum insured, stepped versus level premiums and understand waiting and benefit periods—you may not know the ins and outs of how benefits are calculated.

It’s because Income Protection benefits differ depending on the type of cover. At Asteron Life, we offer agreed value, endorsed agreed value or indemnity cover on Asteron Life Complete policies. Here’s a look at how these policy types differ.

What is an agreed value insurance policy?

With an agreed value policy, the monthly benefit is based on income declared when the policy holder first applied for cover.

At claim time, we’ll pay a benefit based on the declared monthly income (financial evidence may be required to support the income declared) regardless of whether the policy holder’s income has risen or fallen over time.

It’s worth noting that agreed value income protection cover may be suitable for self-employed clients who want some certainty around benefit payments if their income tends to fluctuate.

Endorsed agreed value

At Asteron Life, if the client is able to provide sufficient financial evidence at time of application, we will fully endorse the policy schedule which means we don’t require proof of income should the policy holder make a total disablement claim.

Claims for partial disability benefits will still require proof of income pre-and-post disability.

What is an indemnity insurance policy?

Unlike agreed value and endorsed agreed value policies, the monthly benefit is calculated at claim time using actual pre-disability income.

This means that if your client’s income has decreased since first applying for cover, the benefit will be calculated on the reduced income.

Usually, an indemnity policy is more cost effective than agreed value policies.

To find out more contact your Asteron Life BDM or call us on 1800 031 050.

Asteron Life™ is committed to providing customers with long term financial security. We provide life insurance products including Income Protection Covers, Trauma Cover, Total & Permanent Disablement (TPD) Cover, Life Cover and Business Expenses Cover. To obtain a copy of our privacy statement, please contact us on 1800 221 727 or visit the following website to view or download the policy.

Asteron supports and adheres to the Life Insurance Code of Practice (Code). The Code has been developed voluntarily by the Life Insurance industry through the Financial Services Council to promote high standards of service to consumers, provide a benchmark of consistency within the industry, and establish a framework for professional behaviour and responsibilities. Download the Code here. For more information contact the Financial Services Council on (02) 9299 3022 (local call cost), email or visit

© Asteron Life & Superannuation Ltd ABN 87 073 979 530 (Asteron). Registered Office, Level 16, 363 George Street, Sydney NSW 2000

Asteron Life & Superannuation Limited ABN 87 073 979 530, AFSL 229880 (Asteron) is part of the TAL Dai-ichi Life Australia Pty Limited ABN 97 150 070 483 group of companies (TAL). Suncorp Portfolio Services Limited ABN 61 063 427 958, AFSL 237905, RSE Licence No L0002059 (SPSL or Trustee) is part of the Suncorp group of companies (Suncorp). SPSL is a related body corporate of Suncorp Group Limited ABN 66 145 290 124 and Suncorp-Metway Limited ABN 66 010 831 722 (Suncorp Bank) (Suncorp). This product is not a bank deposit or other bank liability of the Suncorp Bank. The obligations of the different entities of TAL and Suncorp are not guaranteed by other entities