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Income Protection Insurance

Policywise tells you which income
protection insurance best matches your
circumstances, 100% free.

Income portection insurance
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Here's what our customers say about us

These reviews are embedded here from Reviews.io, an independent third party website, so you can know that what you see is exactly what our customers have written, unfiltered by us.

Excellent

star star star star star

4.94 average

304reviews

David Michael​

verified

Verified Customer

Sav and the team at Policywise helped us to set up health insurance for my wife and I. She was an absolute pleasure to work with,...

2 months ago

David Michael​

verified

Verified Customer

Sav and the team at Policywise helped us to set up health insurance for my wife and I. She was an absolute pleasure to work with, offering friendly and knowledgeable service. I can definitely recommend Policywise if you're looking for someone to sort out your insurance needs.

2 months ago

sarah​

verified

Verified Customer

Sav was great, very responsive and good knowledge! Thanks for your help

2 months ago

sarah​

verified

Verified Customer

Sav was great, very responsive and good knowledge! Thanks for your help

2 months ago

Amy

verified

Verified Customer

Very helpful, good communciation, not pushy.

2 months ago

Amy

verified

Verified Customer

Very helpful, good communciation, not pushy.

2 months ago

Terryn

verified

Verified Customer

Easy to work with. Fast response times. Knowledgeable advisors.

2 months ago

Terryn

verified

Verified Customer

Easy to work with. Fast response times. Knowledgeable advisors.

2 months ago

Hannah​

verified

Verified Customer

The process of choosing the right cover for myself and my family was made simple. I just wouldn't have taken the time needed to...

2 months ago

Hannah​

verified

Verified Customer

The process of choosing the right cover for myself and my family was made simple. I just wouldn't have taken the time needed to get the right cover without the support from Policy Wise.

2 months ago

Charlie

verified

Verified Customer

I want to say a HUGE thank you to Sahan Fernando for providing one of the best customer experiences I have ever had! He was...

3 months ago

Charlie

verified

Verified Customer

I want to say a HUGE thank you to Sahan Fernando for providing one of the best customer experiences I have ever had! He was always super responsive to emails, did his best to maximise customer experience, and really made me feel valued. Thanks so much Sahan!!

3 months ago

Tapasya

verified

Verified Customer

I was dealing with Sav who helped me with my health insurance needs. She made the whole process so much easier with her continued...

3 months ago

Tapasya

verified

Verified Customer

I was dealing with Sav who helped me with my health insurance needs. She made the whole process so much easier with her continued support and expertise.

I would highly recommend her to anyone who is looking for a hand in finding the right provider based on their specific requirements which can be a daunting process.

3 months ago

Demishka​

verified

Verified Customer

Sahan was extremely helpful and made sure I understood everything and all the offers. I am young and this whole thing seemed kind...

3 months ago

Demishka​

verified

Verified Customer

Sahan was extremely helpful and made sure I understood everything and all the offers. I am young and this whole thing seemed kind of scary but working with Sahan made the whole thing very easy. Policy wise was able to show a range of different options that covered my needs and were able to answer all my questions. Some truly amazing customer service and a great company overall.

3 months ago

Bethany​

verified

Verified Customer

I have had the best experience with Policywise. When we first started to lookfor health insurance, we're extremely overwhelmed....

3 months ago

Bethany​

verified

Verified Customer

I have had the best experience with Policywise. When we first started to lookfor health insurance, we're extremely overwhelmed. There were so many companies with so many different things to consider. Not only were Policywise able to help me figure out what is the best health insurance for my family but they continue to support us make the best choices, update our cover and work out finances. The lovely Savanthee Raeburn ensured my husband and I were fully covered at a price that suits us and as our family grew she helped set them up too. We highly recommend the wonderful Sav and Policywise for finding health insurance that works for you.

3 months ago

Millaray

verified

Verified Customer

Savanthee Raeburn is very patient and kind. She explained everything in great detail and guided me to choose the best option for...

3 months ago

Millaray

verified

Verified Customer

Savanthee Raeburn is very patient and kind. She explained everything in great detail and guided me to choose the best option for me. I am really very happy with her support.

3 months ago

If an injury or illness forces you to stop working for an extended period of time, how long can you support yourself and your family without a regular income? 

A Horizon Research survey revealed that each year, around 54,800 Kiwi families experience having their main income earner stop working for three months or longer due to an illness. 

Unfortunately, many New Zealanders have little to no savings they can use during these events. Finder’s survey revealed that 39% of Kiwis have no emergency fund and a further 20% could survive on their savings for one week at the most if they lost their job. 

ACC (Accident Compensation Corporation) won’t always have your back either. ACC only covers you if you’re hurt in an accident. It won’t cover you if sickness prevents you from going back to work. 

Income protection insurance provides you with a monthly benefit you can rely on if you have to stop working due to an injury or illness.

Without protection from life’s uncertainties, a health crisis or injury can easily wipe out your hard-earned savings and assets. You insure your home or car in case of accidents or major damages, don’t you? It’s even more important to protect your most valuable asset: your health and ability to earn an income.

Keep reading to learn more about income protection insurance, its benefits, and how it works. Or talk to a Policywise adviser for a free consultation and a personalised quote comparison.

What is Income Protection insurance?

Income protection provides a monthly payment if you are unable to work in your occupation due to an injury or illness. Income insurance can support you long after your sick leave entitlement runs out.

You can use this monthly cash benefit for anything you or your family needs to support your recovery and keep up with financial commitments. You can use it for:

  • Rehabilitation or therapy 
  • Medications, non-PHARMAC funded drugs, mobility devices, diagnostic tests and consultations at private healthcare facilities
  • Modifications to make living with a disability in your home easier
  • Groceries & utility bills
  • Mortgage or rent payments
  • Payments for car loans, credit card bills, and other financial obligations

How does income protection insurance work?

Income protection insurance provides you with a financial cushion by insuring up to 75% of your income.

The monthly benefit you will receive will be reduced by other benefits you may be getting or entitled to for the same illness or injury. This may include:

  • ACC compensation
  • Sick leave payments
  • Benefits from other insurance policies you may have such as mortgage protection

You will start receiving benefits after the waiting period you chose when you applied for income insurance. For example, if you choose a waiting period of three months, your benefits will start if you are still unable to work three months after you filed a claim.

You will receive monthly payments for the duration of the benefit period you selected when you got the policy. This can be for 2 years, 5 years, until you can go back to work, or until retirement.

Why do I need income protection insurance if New Zealand has ACC?

New Zealand’s accident compensation scheme (ACC) can cover you if you are injured due to an accident. However, ACC won’t support you if:

  • you get sick (and your illness isn’t due to your work)
  • you suffer a long-term illness such as stroke
  • your disability is due to a pre-existing condition

If you are self-employed or a contractor, ACC may also be confusing and costly to access, which could see you missing out or not getting the level of cover you need.

Do you need income insurance? Just ask yourself:

  • Do you have enough sick leave to cover your mortgage, debts, living expenses, and other financial obligations if you can’t work for several months or years due to an injury or illness?
  • How long will your savings, sickness benefit, and other income support you and your family?

If you don’t have sufficient resources to fall back on, getting income protection is a smart financial decision.

Income protection reduces your stress. Instead of worrying about unpaid bills or getting deeper into debt, you can focus on your recovery and spending quality time with your loved ones.

How much monthly benefit will I receive if I need to claim?

You can get up to 75% of your gross annual pre-disability income, less any benefits you’re receiving or are entitled to for the same illness or injury. For example, if your annual salary is $60,000 (or $5,000 per month), and you’re not receiving benefits from other sources, you can get up to $3,750 per month.

The monthly benefit you’ll receive is based on your salary when you took out income protection insurance. If your salary increases or decreases afterwards, you will still be entitled to the same monthly benefit. So, you may want to consider adjusting your cover regularly to match your increasing income especially if your financial obligations have also increased.

What's covered? Built-in and optional benefits of income protection insurance

The advantages of income protection insurance go beyond simply replacing lost income. Income insurance offers additional benefits that can ease the significant physical and financial challenges that come with a major sickness or injury.

Below are some built-in and optional benefits many insurers offer. Please check your policy document for the full list of benefits.

Sample Benefits

(Note: Income protection insurance products have varying built-in and optional benefits. Refer to your insurer’s policy document to know which benefits they offer.)

Total Disability Income Benefit

  • You will be given a monthly benefit at the end of the waiting period until you are no longer totally disabled or until the end of your selected cover term.

Partial Disability Income Benefit

  • You will receive a monthly benefit if you are partially disabled and, as a result, have to work significantly fewer hours or earn less than your pre-disability income.

Rehabilitation and Support

  • Your insurer will find ways to assist you so you can go back to work.

Vocational Assistance

  • Your insurer will reimburse your vocational assistance programme expenses if you can no longer work in the same occupation prior to your disability.

Home Modification and Equipment Expense Benefit

  • This benefit helps cover the costs of specialised equipment and home modifications you need to make due to your disability.

Back to Work Payment

  • You will receive a lump sum benefit if you are able to go back to work within a specific period after making a claim.

Pregnancy Premium Waiver

  • Your insurer will waive your premium within a specific period during and after your pregnancy. You can still file a claim while your premium is waived

Return Home Benefit

  • If you suffer a critical condition for the first time and you are overseas, your insurer will help cover the cost of your and your support person’s travel back home.

Home Care Benefit

  • Your insurer helps pay for your professional carer or helps replace the income a family caregiver sacrifices to look after you

Childcare Support Benefit

  • Your insurer reimburses the cost of additional childcare you may require while you are disabled.

Bed Confinement Benefit

  • Your insurer provides a daily benefit if you are confined to bed at home and need full-time care or are admitted to a hospital for several days.

Death Benefit

  • Some insurers provide a lump sum if the insured passes away while their policy is in force.

Claim Indexation Benefit (optional)

  • Your sum assured will increase each year to keep up with inflation.

Redundancy Cover (optional)

  • You will receive monthly benefits for a specific period if you are made redundant.

Retirement Protection (optional)

  • Your insurer pays your KiwiSaver scheme contribution while you are receiving your monthly total disability income benefit.

The advantages of comparing income protection products before buying

Comparing income protection insurance products from multiple insurers allows you to choose the best product for your circumstances at the best price.

But comparing and reviewing income protection cover details can be overwhelming.

At Policywise, we make comparing income protection insurance quotes simple and easier for you, and it’s free! Here’s how we do it.

How Policywise works in 3 easy steps

1

Tell us about yourself

Click the button below to get started by entering some basic details. (Takes less than 30 seconds.)

2

Get your FREE, no-obligation quote comparison

We’ll provide a straightforward run-down of your best options. It will show you the top health insurance policies that match your needs, with research and rankings on each health insurance provider. You can see a quote summary of the lowest market prices available for these policies. We provide all this completely free, with NO ADDED COST on the premiums, because the insurer pays our fees.

3

We take care of everything for you

If you like our recommendations, our experienced health insurance heroes will set up everything. Eliminate the pain of organising your health insurance. We handle all the time-consuming back-and-forth with the insurer, on your behalf. This is FREE for you because the insurer pays our fees as a commission on the policy you buy.

Why choose Policywise as your income protection insurance adviser

Policywise offers you:

  • Comprehensive, impartial, and fast income protection quote comparisons: We include quotes from multiple insurance companies so you can choose the best product at the lowest price.
  • Personalised recommendations that fit your needs and budget: Policywise advisers help you weigh up the pros and cons of each product as they relate to your situation. They explain technical terms and help you understand what’s covered and what’s not so you can make an informed decision before buying a policy.
  • Free insurance advice: Policywise advisers can help you work out how much insurance you truly need. They’ll also review your existing cover and help you enhance your financial plan with the best insurance products.

And if you need to make a claim, Policywise will go into bat for you. Dealing directly with the insurance company can be challenging and stressful and you may not get the result you were hoping for. We can make the whole process much smoother.

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Income protection alternatives and complementary insurance products

  • Workability Insurance:Workability cover provides a monthly benefit if you have to stop working due to an illness or injury that is not covered by ACC. Insurers pay up to 75% of your pre-disability income and may also cover rehabilitation costs to help you get back to work.

Workability insurance is more affordable than income protection but it does not come with as many benefits.

  • Trauma/critical illness insurance: If you suffer a critical illness such as cancer or stroke, you will receive a lump sum benefit from your insurer. You can use this amount for health-related and living expenses. Note, however, that if you are unable to work due to an uncovered condition such as a back injury, you will not be able to file a critical illness claim. In this case, you can use your income protection cover to replace lost income.
  • Health insurance: Health insurance covers your healthcare expenses if you go to private facilities for faster diagnosis, surgery, or other treatments or require expensive non-PHARMAC-funded drugs. While health insurance shields you from the high cost of medical bills, it will not provide monthly payouts that you can spend at your discretion. However, you can use your income protection benefits to cover living expenses while you recover.

Frequently Asked Questions

Who can buy income protection insurance?

You can apply for income protection if:

  • you’re 16 to 55–60 years of age (the maximum entry age varies across insurers)
  • you’re employed (either full-time or part-time) or self-employed, and
  • you’re a New Zealand citizen, a permanent resident, or have a long-term business visa or a work permit in the country.

Insurers may have other eligibility requirements. Talk to a Policywise adviser to learn more about each insurer’s criteria.

Are all occupations accepted?

No. Most insurance policies won’t cover high-risk professions such as military, police, prison guards, and coal miners.

Can self-employed individuals get income protection insurance?

Yes, self-employed individuals can apply for income protection cover. Contact us if you wish to get a free quote comparison.

How much can I get?

You can insure up to 75% of your annual pre-tax income. But the exact monthly benefit depends on your personal circumstances, average annual income, and your ability to pay the premium. To learn more, schedule a callback with one of our advisers.

What are the monthly maximum sum insured amounts?

Insurers offer different maximum cover amounts, ranging from $8,300+ to $40,000 per month.

When will my insurance protection cover expire?

Your cover will usually expire when you turn 65 unless your policy allows an extended cover for up to 70 years of age.

How much income protection cover do I need?

The amount of cover you need will depend on your circumstances and financial obligations. Our Policywise advisers can help you calculate the monthly benefit you’ll require if you have to stop working due to a disability.

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What is a waiting period and how is it determined?

The waiting period refers to the time you’ll have to wait before your monthly income protection payout starts.

For example, if you stop working due to an injury and you chose an 8-week waiting period when you bought your policy, your monthly payout will start after 8 weeks. If you are able to go back to work within the waiting period, you will not receive any monthly benefit.

Choose the waiting period that suits your needs–it can be 2, 4, 8, 13 weeks, or longer. Pro tip: selecting a longer waiting period can make your premiums more affordable.

When choosing a waiting period, consider:

  • how long your emergency fund will last if you are unable to work
  • other income sources or savings you can rely on if you have to stop working
  • how much paid sick leave your company owes you.

For example, if you have 2 weeks sick leave and your emergency fund can cover you for 6 weeks, you might opt for an 8-week waiting period.

Can I choose the length of time I want to get monthly payments?

Definitely. Most insurers offer a 2-year, 5-year, or until age 65 or 70 benefit period. The benefit/payment period is the maximum length of time you can receive monthly benefits provided that you continue to meet the claim criteria.

Choosing a shorter benefit period lowers your premium, but this also means that your payouts will stop sooner even if you’re still unable to work. If you choose until age 65 as your benefit period, and you suffer a permanent disability and can no longer work, you will continue to receive monthly payouts until you reach retirement age.

What do income protection premiums cost?

Your income protection premium depends on multiple factors such as your:

  • Age & gender
  • Health & smoking status
  • Occupation & annual income
  • Percentage of income you’d like to insure
  • Waiting period & payment periode
  • Whether you choose level term (you pay a fixed premium) or age-rated payments (your premiums increase as you age).

Contact us to ge a personalised quote comparing income protection cover from New Zealand’s most trusted insurers.

What are my payment options?

You can pay through direct debit or credit card with options to pay weekly, fortnightly, monthly, quarterly, half-yearly, or yearly.

Is income protection insurance tax deductible?

According to the Inland Revenue Department, you can deduct your income protection premiums if any claimed income insurance payout is taxable.

Do I have to pay tax on income insurance payouts?

Yes, IRD generally considers income insurance payouts as income and therefore taxable.

What is not covered by income protection insurance?

Income protection insurance won’t cover the following:

  • Injuries due to self-harm
  • Injuries due to criminal activities
  • Pregnancy, childbirth, or a miscarriage unless resulting in a significant disability
  • Patients who fail to follow recommended medical treatments
  • While a person is in prison or home detention.

What is the difference between a policy owner and life assured?

The policy owner owns the policy. He/she pays the premiums and can make changes on the policy.

The life assured is the person insured under the policy. The life assured cannot alter the policy without the policy owner’s authorisation.

How much will it cost me to get your expert advice and assistance?

Nothing. Our assistance and consultation sessions are free. The quotes we provide you are the same prices you’ll get if you requested quotes from the insurers.

Does income protection insurance cover redundancy?

Redundancy cover isn’t a standard benefit in insurance protection policies.

But some insurers offer an optional redundancy cover. This will provide you with a monthly payout for several months if you are made redundant.

Other insurers give you the option to suspend your cover if you are made redundant. Note that you will not be able to make claims for injuries or illnesses during the suspension period.

Does income protection cover pregnancy or maternity leave?

No, it won’t pay you a monthly benefit if you’re unable to work due to pregnancy. But insurance protection may cover you if your pregnancy leads to a disability that lasts longer than three months after the end of your pregnancy.

Some insurers may also waive your premiums for a specific period during and after your pregnancy while still keeping your policy in force.

Can I make a claim if I need to stop working due to mental health reasons?

Yes, income protection insurance provides benefits if you can’t work due to a mental health disorder such as depression.

Can I still get income protection cover if I have a pre-existing medical condition?

Having a pre-existing medical condition does not disqualify you from getting income protection cover. However, it may affect your premiums or your cover. We recommend speaking with a Policywise adviser so they can give you more information and help you find the right insurance product for your situation.

Can I make a claim if I lose my job?

If you lose your job because an injury or severe illness prevents you from working, you can claim on your income protection insurance. If you lose your job due to other reasons, you cannot use your cover.

Insurers usually offer an option to suspend premiums if keeping up with premium payments becomes difficult while you’re between jobs. However, this usually means that you won’t be able to claim benefits for conditions that occur during the suspension period.

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What if I am overseas for travel or work, will I still be covered?

Yes. If you’re in another country for work or leisure, you remain covered.

Can I increase or reduce my cover after the policy is issued?

Yes, you can change your cover to match an increase or reduction in your income and/or financial obligations. Talk to a Policywise adviser to get more information about each insurer’s policies or requirements when adjusting cover amounts.

What happens if I can't pay my premiums on time?

Insurers give you time to update your premium payments. After the grace period, your policy will be cancelled.

Some insurers offer a premium suspension benefit. This option allows you to suspend your cover temporarily if you need to take leave from work, lose your job, or experience a significant decrease in your income. While you can’t claim benefits for illnesses or injuries that occur during the suspension period, your policy won’t be cancelled and it gives you time to get back on your feet financially.

Do insurers offer money-back guarantees in case I change my mind after getting my policy?

Yes. Insurers offer a free look period. If you decide to cancel your cover within this period, the insurer will return your premium payments. If you cancel your policy after the free look period, you will no longer receive a refund.

Can I cancel my cover anytime?

Yes, but we strongly recommend keeping it for your own protection and for your family’s benefit.

If I already have an income protection policy, can I get another one?

If you intend to keep your current income protection cover, we encourage you to be careful about getting a second policy.

This is because the payouts you receive from your first income protection policy (as well as other sources such as ACC or your employer) will be deducted from your benefits under the second policy. In effect, you are paying double for the same cover amount.

Do I need to update the insurer about changes in my circumstances?

Yes. Policywise clients can simply send us an email about these changes and we will take care of updating the insurer for you.

I’m not satisfied with my existing income protection cover. Can you help me look for a better one?

Definitely. Policywise advisers are experts in comparing different insurance products and providers. Just give us the details of your current cover and we’ll provide quotes for policies that match your needs.

Book a call with a Policywise adviser to discuss your options!

How do I file a claim?

If you need to stop working due to an illness or injury, consider filing an income protection claim as one of your top priorities. Call your insurer as soon as possible so they can guide you through the claims process.

Policywise clients can also contact us for prompt, stress-free claim filing assistance.

Do I automatically get the full benefit amount if I can’t work due to a health issue or injury?

This depends on whether you are receiving benefits from other sources (also called benefit offsets) due to the same illness or injury. Benefit offsets may include sick pay from your employer, ACC entitlements, or any other income protection policies you may have.

These benefit offsets will be deducted from your income protection benefit. For example, if your monthly income protection benefit is $5,000 and you’re receiving $2,000 from the ACC and $1,000 from your employer, you will receive $2,000 from your income protection cover.

Will I receive benefits if I am partially disabled but can still work?

Yes. Income protection pays a benefit if a partial disability significantly impacts your work hours and income.

When will I receive my first payment?

This depends on the waiting period you selected when you bought income protection. For example, if you choose a 4-week waiting period, your monthly payouts will start after 4 weeks.

How long will I receive benefits?

You will receive monthly benefits until your chosen payment period ends or you are able to come back to work.

What if I have other questions about income protection insurance?

ust send us a message or schedule a callback and one of our insurance experts will contact you at your available date and time.

References

Quickly find the cover that’s best for you

Policywise tells you which health, life or disability insurance best matches your circumstances, 100% free. Talk to one of our insurance advisers to find out which life insurance is best for you.