Doctors, lawyers, engineers and accountants are stepping into structured careers with clear progression pathways and strong income growth ahead, often after significant personal and financial investment in their education. Many professionals, GPs for example, will more than double their income over the course of their early career.
On paper, they represent a low-risk cohort. But Australia’s familiar “she’ll be right” mindset tells a different story.
This cultural optimism, reinforced by confidence in public safety nets, is shaping how young professionals think about risk. Protection is rarely prioritised early. Instead, it is typically deferred until a trigger event such as buying property or starting a family
The result is not just underinsurance in the traditional sense, but a structural timing gap, where protection consistently lags the value of future income.
By the time many professionals take out meaningful cover, they have already spent years in the workforce exposed. Income is rising, career trajectories are accelerating, but protection remains anchored to an earlier stage.
For advisers, this underinsurance gap for young professionals is more than a behavioural quirk. It is a structural disconnect and a strategic opportunity.
Australia’s relationship with risk
Insurance rarely sits high on the priority list for young professionals. Early career focus centres on progression, lifestyle and opportunity. Health risks feel distant and financial vulnerability abstract. It is often seen as a “grudge” purchase, something necessary but easy to defer.
Phil Thompson, CEO at Skye Wealth, notes: “Of the four core insurance types, income protection is usually the one younger clients want first. They get why it matters. But wanting it and acting on it are two different things. What we see consistently is that engagement is triggered by life events rather than the start of earning.”
Financial literacy among younger Australians is improving, driven partly by social media finfluencers, adviser-led content and broader conversations around money.
“We regularly sit down with clients in their mid-to-late twenties who already know the two-year IP policy in their super isn’t enough before we’ve said a word,” Thompson says. “They’ve done the listening. They just need help acting on it.”
Advisory firms are also playing a more active role in education. “That’s a big part of why we invest so heavily in education content ourselves,” Thompson says.
Awareness doesn’t always translate into earlier or more proactive decision-making. As Thompson notes, “For most, it still takes a trigger event to make protection feel urgent. The challenge is getting younger Australians to connect ‘I have an income now’ with ‘I should protect it’ earlier in my career.”
For high-performing professionals, that same cultural confidence can mask real vulnerability. Public safety nets may provide access to medical treatment, but they do not replace a person’s income. For professionals whose primary asset is their earning capacity, that distinction is critical. When protection is delayed, exposure builds just as income begins to accelerate. Even a short disruption can impact not only current earnings, but the trajectory behind them.
Rapid income growth creates a hidden risk
For professionals in fields such as medicine, law and engineering, early-career income progression is steep and largely predictable. Clear pathways through specialisation and advancement provide strong visibility over future earnings.
The risk is not just current income, but the loss of future growth if that trajectory is interrupted. Yet most protection strategies remain anchored to present income, on short-term benefit or payout periods.
Thompson sees this consistently. “Benefit period is the biggest issue. Most younger clients rely on default income protection through super. Short benefit periods, limited definitions, nothing tailored. They assume it’s adequate, but when you map that against a long-term medical condition, it falls short quickly.”
The second issue is less visible.
“Cover is often set against a graduate salary with no indexation or future insurability. Five years down the track, particularly in fast-growing careers, it can look completely inadequate.”
For advisers, this is an opportunity to get ahead of the gap. Protection is not just about replacing income today, but ensuring cover keeps pace with where a client is heading. That means regular reviews and solutions that evolve alongside a client’s career.
A shifting underwriting landscape
There are options in the insurance market that better reflect these dynamics. Generally, underwriting has been based on current income, a point-in-time view based on what someone earns today.
What’s changed is the nature of professional careers. They are far more dynamic, and there is growing recognition that structured professions tend to follow relatively predictable income trajectories, particularly in the early years post-qualification.
As a result, parts of the market have models that better reflect where someone’s income is heading, not just where it sits today. For instance, a 27-year-old medical registrar earning $95,000 today may be underwritten on what they are likely to be earning over the coming years and then seamlessly increase their cover to levels that reflect these earnings without further medical underwriting when this materialises.
For advisers, this creates a more proactive way to structure protection. It allows protection to be built with future income in mind, rather than constantly having to reassess and reapply after the fact. Instead of playing catch-up as a client’s earnings increase, cover can be aligned earlier to the trajectory sitting in front of them. This allows protection to scale more naturally alongside a client’s career, rather than lagging behind it.
Even so, underwriting alone does not solve the problem.
“Where we see things fall down is when cover is set once and left untouched,” Thompson says. “Younger clients’ circumstances change quickly. If protection doesn’t keep pace, it becomes out of date faster than most people expect.”
A segment ready for greater focus
Young professionals represent one of the most underdeveloped opportunities in advice today.
They combine strong income growth, relatively low early-career claims risk and increasing financial complexity over time. Early engagement also lays the foundation for long-term advice relationships.
These professionals have invested a lot of time and money in building these careers and it is valuable to protect this potential
Delay the protection conversation, and the gap compounds. Income rises, responsibilities increase, but cover often remains anchored to an earlier stage.
Australia’s “she’ll be right” mindset may be deeply ingrained. But when it comes to safeguarding lifetime earning capacity, optimism is not a strategy
For advisers, the opportunity is clear: start earlier, align protection with future earning potential and build strategies that evolve alongside a client’s career.
Matthew Pilcher is director of proposition at PPS Mutual
To add to “Easier work at Bunning” – add having to write a book just to get paid very little (younger clients have lower premiums / low commissions). Many decades ago agents simply provided several quotes & wrote the up the client – and everyone was happy. No “War & Peace” to write just to get paid.
Reduce commissions. Reduce insurance provider competition. Reduce product features. Increase responsibility period. Increase underwriting hurdles. Increase premiums.
Surprised, anyone?