Compare Income Protection Insurance

2026 Best income protection insurance plans in New Zealand (overview)

What is income (salary) protection insurance, and how does it work?

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

     Choosing a waiting period

     Choosing a benefit period

     Combining with mortgage protection insurance

Who can buy salary protection insurance?

Do I need income cover? + claims statistics

     You should consider getting income protection insurance if:

     Who doesn’t need income protection cover?

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

Limitations of income protection cover (+ expert tips)

How much income protection cover do I need?

Income protection premiums cost (quote comparison)

How can you lower your premiums?

Why compare income protection plans and quotes before buying

Why choose Policywise as your income protection insurance adviser

Frequently asked questions

2026 Best income protection insurance plans in New Zealand (overview)

What is income (salary) protection insurance, and how does it work?

Income protection insurance (also called salary protection or loss of income cover) pays a monthly benefit of up to 75% of your income if you can’t work due to a long-term injury or illness. Income insurance can support you long after your sick leave entitlement runs out, ensuring your bills don’t pile up while you recover.

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

• Rehabilitation or therapy
• Medications, including non-Pharmac-funded drugs
• Diagnostic tests and consultations at private healthcare facilities
• Mobility devices and modifications to make living with a disability in your home easier
• Groceries, utility bills, and other living expenses
• Mortgage or rent payments
• Payments for car loans, credit card bills, and other financial obligations.

Your monthly payment will be reduced (offset) by other benefits you may be getting or entitled to for the same illness or injury.

You’ll start receiving benefits after the waiting period you opt for when you apply for income insurance. For example, if you choose a waiting period of eight weeks, your benefits will start if you are still unable to work eight weeks after you filed a claim.

You will receive your monthly payments for the duration of the benefit period you select when you get the policy. For example, if you choose a five-year benefit period, you’ll continue to receive monthly payments for five years if you remain disabled and unable to work during this time.

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

You can get up to 75% of your gross 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 exact monthly benefit amount depends on:

• the type of cover you choose: agreed value (based on your income when you apply for cover) or indemnity value (based on your income at claim time)
• whether you are receiving benefits from other sources (also called benefit offsets) due to the same illness or injury. Benefit offsets may include sick leave payments, ACC entitlements, and benefits from your other insurance policies, such as mortgage protection insurance
• how much of your income you have insured: You can opt to insure less than 75% of your income, depending on your circumstances and ability to pay the premium.

Choosing a waiting period

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

Choose the waiting period that suits your needs. Insurers typically offer the following options: 2, 4, 8, 13, 26, 52, or 104 weeks.

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.

TIP: Selecting a longer waiting period can make your premiums more affordable.

Choosing a 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. This can be for 1 year, 2 years, 5 years, or until retirement (age 65 or 70). Shorter benefit periods may be available in some plans.

You will stop receiving income benefits when the earliest of the following occurs:

• you are no longer disabled and can go back to work
• your benefit period ends
• your cover ends
• you pass away.

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.

Combining with mortgage protection insurance

When structured correctly, holding both income cover and mortgage protection can maximise the benefits you receive in case a serious illness or injury prevents you from working.

Policywise advisers can assess whether combining these covers makes sense based on your financial situation.

Who can buy salary protection insurance?

You can apply for income protection if:

• you’re 16 to 55–62 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 work permit in the country.

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

Do I need income cover? (+ claims statistics)

While personal savings may be sufficient to cover a short-term absence from work, a long-term health crisis lasting months could push you towards debt, easily wiping out your hard-earned savings and assets and disrupting your long-term financial goals.

Most people insure their home or car in case of accidents or major damages; it’s even more important to protect your most valuable asset: your health and ability to earn an income.

You should consider getting income protection insurance if:

• You’re employed, self-employed, or a business owner who relies on your income to cover rent, mortgage, bills, and other financial commitments
• You don’t have paid sick leave entitlements
• You support children, a partner, or other dependants
• You’d struggle financially if you couldn’t work for several months or longer
• You don’t have family members who can provide long-term financial support in case you need to stop working.

Who doesn’t need income protection cover?

Income protection might not be necessary if:

• You have substantial savings, sufficient pension, or passive income you can live on for a long time
• You have a family member earning enough to cover your household’s expenses.

Here’s why income protection is worth considering:

• Around 54,800 Kiwi families experience their main income earner having to stop working for three months or longer due to an illness. (Horizon Research survey)
• One in three Kiwis don’t have enough funds for an unexpected $500 bill. (Kiwibank survey)
• ACC primarily covers accident and work-related injuries. ACC won’t cover you if sickness, such as cancer or stroke, prevents you from going back to work.
• If you are self-employed or a contractor, ACC may be confusing and costly to access, which could see you missing out or not getting the level of cover you need.
• If you can’t work due to an illness or injury, you might qualify for Jobseeker Support, however, its flat weekly rate may not be enough to cover your rent and bills or support a family.
• Hospital care and GP visits may be subsidised or free, but you still need money to pay your mortgage or rent or put food on the table while you’re recovering.
• Most employees only get 10 paid sick leave days per year. A serious illness or injury can keep you off work for months, or even years. After your leave runs out, you’ll need another source of income.
• The ongoing monthly payments provided by your income protection insurance helps you continue contributing to your KiwiSaver, pay off debts, or save for your children’s education, even while you’re recovering.
• If you’re self-employed or a business owner, you don’t have employer-provided sick leaves. Income cover can keep your household and business running while you recover.

Claims stats

A long-term illness or injury can strike anytime, at any age. Income protection claims statistics reveal that many claimants were in their 30s and 40s, but some were only in their 20s. Top conditions claimed included musculoskeletal, accidents and injuries, mental health, and cancer.

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

Income insurance plans offer both built-in and additional benefits that can ease the physical and financial challenges that come with a major sickness or injury.

Below are some examples of built-in and add-on benefits offered by many top insurers.

Limitations of income protection cover (+ expert tips)

Income protection insurance has its limitations. Here are a few to be aware of, and some tips to help:

1. Doesn't cover job loss due to redundancy

Most insurance plans don't include a redundancy benefit in their base cover. If you lose your job due to redundancy, you won’t receive payouts from your policy to help replace lost income.

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.

TIP: Check if your insurer offers redundancy cover as an add-on and consider purchasing it. Alternatively, consider building an emergency fund to cover potential job loss.

2. Payments may be offset by ACC or other benefits

Your monthly benefit will be reduced by other benefits you’re entitled to for the same illness or injury, such as paid sick leaves, ACC payments, and mortgage insurance benefits.

TIP: Review the policy’s terms or talk to your income protection insurance broker to understand how monthly benefits are calculated.

3. Waiting period before payments start

There’s always a waiting period before you start receiving your benefit. You’ll need to rely on your sick leave, savings, and other financial sources during this time.

TIP: When choosing a waiting period, consider how long your savings and other resources could support your family if you needed to stop working. If you have significant savings or alternative financial sources, consider choosing a longer waiting period, which also helps reduce your premium.

4. Limited benefits for dependants in case the insured passes away

Some income insurance plans provide limited financial assistance for funeral expenses, while others don't cover this, or they may offer it as an optional add-on. Income insurance plans also cease when the insured passes away.

TIP: If you’d like to have your funeral expenses covered, choose an income insurance policy that provides a death benefit as part of its base plan or offers as an add-on. If you’re concerned about your dependants’ long-term financial security if you pass away, consider getting life insurance. It provides a lump sum benefit which can help cover your family’s living expenses, debts, or future needs, like education costs.

5. No immediate funds for significant critical illness expenses

Income protection doesn’t offer a lump sum amount to use for expensive private medical treatments if you’re diagnosed with a serious illness.

TIP: If you wish to have additional resources in case of critical illnesses like cancer, find an income insurance plan with a critical/severe illness benefit add-on or consider getting a separate trauma insurance plan.

How much income protection cover do I need?

Here’s a basic formula: Essential expenses + buffer = target monthly income cover

1. Essential expenses: Calculate the costs that won’t disappear if you stop working, such as:

• Mortgage or rent
• Food and utilities
• Childcare or school costs
• Debt repayments, insurance, and other financial obligations.

2. Buffer: Add a modest buffer to handle unexpected expenses.

3. Compare the amount you need to insure vs. insurer limits

Most policies can cover up to 75% of your gross income. If your estimate exceeds this, you’ll need savings or other fund sources to fill the gap.

Income protection premium cost (quote comparison)

Your income protection premium depends on factors such as:

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

Below are sample quotes from New Zealand’s best income protection insurers. Contact us to get a personalised quote comparison. 

How can you lower your premiums?

• Consider insuring a lower percentage of your income. If your expenses are significantly less than your income, think about insuring a smaller percentage of your earnings to get lower premiums.
• Choose a waiting period that’s appropriate to your circumstances. Calculate your monthly expenses and assess your savings, paid sick leaves, and other resources to determine how long you can manage without income. A short waiting period will provide benefits sooner, but premiums are higher. A long waiting period will have a lower premium, but you need to ensure you have funds to keep you going until your cover pays out.
• Consider whether short-term cover will be enough. Choosing a shorter benefit period, such as 2 or 5 years instead of until age 65 or 70, lowers premiums as it reduces the insurer’s long-term payout obligation. Keep in mind, though, that if your disability lasts beyond your chosen benefit period, you’ll need to rely on other financial sources from then on.
• Compare income insurance plans and quotes. Premiums as well as benefits vary across insurers. That’s where working with an income insurance broker like Policywise, really pays off. We’re not tied to just one insurer, which means we can compare options across the market and help you find competitive rates for the cover you need.

Why compare income protection plans and quotes 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!

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 related 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 really 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.