August 24

Income Protection

Income Protection, Insurance


For many people, it definitely pays to take out income protection insurance and protect their salary, yet many do not.

Ask yourself this simple question:

How would I be able to pay my current bills and expenses if I was unable to work or if I couldn’t work for several months through injury or illness?

Most of us would be reliant on the generosity of others, our partner, or our savings if we did not have income protection insurance. But in the worst cases, people find they struggle to meet their mortgage costs, rent or everyday bills very quickly.

According to Horizon Research only about 15% of Kiwis have income protection and and there are nearly 1 million households with income above $20,000 per year that would be vulnerable if the main income earner stopped working due to illness.



ACC will provide 80% of your income in the event of an accident if you are unable to work. Many people mistakenly assume that ACC will take care of them if they are unable to work. It is important to remember ACC covers accidents and NOT illness.


Income protection provides you with a monthly income if you suffer a long term illness, disability or other loss of income. Essentially, income protection can provide peace of mind and offer security at times when money will be tight.

Payments are generally a set percentage of your income (60-75%) and begin after you have been off work for a certain period of time (waiting period). You can also choose the length of time that you will receive the benefit also know as the benefit period. This is usually either 2 years, 5 years, till you reach the age of 65 or to the age of 70.

Remember! Income protection insurance almost always DOES NOT provide cover for redundancy. You can get income protection plans which offer redundancy cover as an add-on.

There are many types of income protection and these vary in their design but essentially they all replace your income if something goes wrong. It is best to talk to your adviser to find out which cover is best for you. Some of the other forms of income include:

  • Mortgage Repayment Cover
  • Indemnity or agreed value income protection
  • Loss of Earning


There are many factors that go into the cost of income protection and this makes it incredibly hard to estimate the cost of income protection for an individual and their specific circumstances. Some of the factors involved include:

  • age
  • gender
  • occupation
  • current health
  • smoker status
  • waiting period
  • benefit period
  • premium structure

Generally speaking the more comprehensive the cover the more it will cost.

If you would like a quote for your specific circumstances please contact us below. 


When you are self-employed you do not have any sick pay or any other fall back if you are unable to work. Generally, if you are not working you are not getting an income. This can lead to significant financial stress if you are able to work for an extended period of time and could potentially mean the end of your business.

As a self-employed person you already pay for ACC levies every year and paying for additional income protection on top of this can seem like you are paying double. Fortunately, there are ways that you can make you cover more cost effective by using CoverPlus Extra. For some self-employed the cost of combining CoverPlus extra and other income protection can result in costs that are similar to just paying ACC levies.


Book a free chat with us now – let’s talk!

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