Monthly benefit
How the insured amount is set at application and proven at claim time. Agreed-value, indemnity and loss-of-earnings approaches can differ.
Income protection
Income protection insurance in New Zealand
Understand what can replace income after illness or injury, how waiting and benefit periods work, and where ACC or mortgage cover may overlap.
Start with the problem
Protecting income is different from paying a death benefit
Income protection generally pays a monthly benefit when illness or injury prevents work and the policy definition is met. Life cover generally pays a lump sum on death or qualifying terminal illness. The right questions depend on which financial gap you are trying to cover.
Income protection
Monthly support linked to earnings and disability definitions; waiting periods, benefit periods and offsets matter.
Mortgage-repayment disability cover
A disability benefit designed around mortgage, rent or living costs. It is not the same as life cover intended to repay a mortgage on death.
Life cover for a mortgage
A lump sum that could repay some or all of a mortgage following death or qualifying terminal illness.
ACC
Public accident cover. It may provide weekly compensation for eligible injuries, but it does not provide the same illness cover as an income-protection policy.
Redundancy / job-loss cover
A separate and currently limited product category. Never assume it is included with income protection.
Four policy levers
What changes how the cover works
Waiting period
How long disability must continue before benefits begin. Emergency savings, sick leave and ACC may affect the period a household can carry.
Benefit period
Payments may be limited to a number of years or continue to a selected age, subject to occupation and policy terms.
Disability definition and offsets
Own-occupation tests, partial disability, other income, ACC and recurring claims can materially change an outcome.
ACC and private cover
ACC is important—but only for eligible injuries
ACC says weekly compensation may pay up to 80% of income when an eligible injury prevents work. Eligibility, the first week, earnings calculations and self-employed arrangements have specific rules. See ACC’s current weekly-compensation guidance.
An income-protection policy may offset ACC or top up income differently depending on the product. Do not assume every private benefit sits on top of ACC in full.
Tax needs the exact policy
Do not apply one tax rule to every benefit
Inland Revenue says the cost of income-protection insurance may be deductible where the payout would be taxable and recommends checking with the provider. It also says loss-of-income payouts are generally taxable, while policy design matters. See IRD on deductible expenses and insurance payouts.
Self-employed or earning variable income?
Ask how the insurer defines pre-disability income, which accounts or tax records are needed, how recent trading changes are treated, and whether fixed business expenses need separate cover. Also check ACC CoverPlus or CoverPlus Extra settings rather than assuming PAYE-style compensation.
Combined-cover questions
- What pays if I die?
- What pays if illness stops me working?
- What pays after an accident, and what can ACC offset?
- Could a trauma lump sum and monthly income benefit both apply?
Referral status
Income-protection enquiries are not active
A partner must confirm this product is within its licensed scope, panel and acceptance criteria before the website can invite live enquiries.
Review current product facts