AIA Income Protection Insurance - a review

AIA NZ - a brief company overview

Helping make New Zealand “one of the healthiest and best-protected nations in the world.”

The AIA Group began selling insurance in 1919 - over a hundred years ago - in Shanghai, China. Expanding into the New Zealand market in 1981, AIA NZ enjoyed rapid, constant growth and can now count more than 797,000 Kiwi policyholders. AIA NZ paid out 92% of claims in 2024.

Backed by the Asia-Pacific AIA Group, one of the largest insurers in the world, AIA NZ knows that good health is invaluable. The company believes in “contributing to the wellbeing of people in every community” and encourages policyholders to take charge of their own health, too.

What is income protection insurance?

Income protection insurance provides regular monthly payments if you suffer an illness or injury that prevents you from working temporarily or permanently. You'll receive your monthly payments for the duration of the benefit period elected when you purchased the policy. 

Think of income protection as a worthwhile investment in protecting your finances so you can meet your regular monetary commitments. It can also help pay for expenses due to your injury or illness, such as rehabilitation, home care, healthcare, medications, and specialist consultations.

Additionally, your income protection premiums may be tax-deductible, and the benefit payments you receive may be taxable. 

Note: ACC (Accident Compensation Corporation) in New Zealand assists with accidents and injuries, but doesn't cover disabilities due to sickness or long-term illnesses.

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What ACC does not cover and how to fill the gap

Do I need income protection insurance?

Income protection vs trauma insurance

AIA Living income protection plans 

AIA offers two income protection plans: Income Protection and Mortgage, Income or Rent Cover.

AIA Living Income Protection

With AIA Living Income Protection, you have three options on how your monthly benefit will be calculated:

• Agreed value: Your income replacement is based on the agreed proportion of your income set at the policy's inception. 
• Indemnity: Your income replacement is based on a proportion of your income at claim time. 
• Loss of earnings: At claim time, you can choose whether your benefits are calculated based on agreed value or indemnity - whichever is higher. This option is particularly beneficial if your income fluctuates.

AIA Living Mortgage, Income or Rent Cover (MIRC)

AIA has replaced its Mortgage and Income Protection (MIP) product with the AIA Living Mortgage, Income or Rent Cover (MIRC) as of 31 July 2025. 

MIRC’s enhancements directly address Kiwis’ increased need for better monthly protection and more favourable offset terms. It provides a higher maximum benefit of up to $20,000 per month. In addition, there’s no ACC or WINZ offset for the first $7,500, giving you more net support when you need it most.

MIRC calculates your monthly payments in two ways:

• Up to 115% of your rent or mortgage payments on your residential property, or 
• 45% of your total income. 

AIA Living Income Protection vs AIA Living Mortgage, Income or Rent Cover 

Comparing key features and benefits

The benefits we’ve outlined below are only a snapshot. A Policywise adviser can walk you through all the details and provide personalised recommendations. We also help you weigh AIA’s cover against other leading income insurers so you can feel confident you’re getting the best fit for your needs.

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nib Ultimate Income Protection

Partners Life income protection insurance

AIA NZ offers more ways to strengthen your cover 

• AIA Life Insurance: Ensures your loved ones receive financial protection in case of your unexpected passing or terminal illness diagnosis. It provides a lump sum payment to support your family, settle debts, and cover living expenses.
• AIA Trauma Insurance: Offers a lump sum payment upon critical illness diagnosis, providing immediate financial aid for medical needs and lifestyle adjustments during recovery.
• AIA Health Insurance: Comprehensive cover for medical expenses, including hospitalisation, surgeries, cancer care, consultations, and non-Pharmac-funded cancer chemotherapy drugs.
• Total Permanent Disablement Insurance: Financial support in the event of permanent disability, providing a lump sum payment to cover ongoing expenses, medical care, and lifestyle adjustments.
• Group Insurance: AIA offers easily adaptable solutions with cost-effective pricing, whether your business is small, with just 10 employees, or large, with 10,000.
• Business and Rural Insurance: Protects businesses and rural enterprises against business interruption and other risks if the business owner or a key employee can’t work due to a total or partial disability, critical illness or injury, or death.

Do you need AIA Income Protection Insurance in New Zealand?

Income protection insurance provides vital support when unforeseen events, like an injury, disability, or illness, impede your ability to work. This cover ensures continuity in meeting your financial commitments and safeguards your quality of life during challenging times. 

While New Zealand’s ACC will cover you for accidental injury, it does not offer income replacement cover for total or permanent disability due to illness. 

Here's why income protection insurance is essential: 

1. Financial security: Provisional data from WorkSafe revealed that from November 2023 to October 2024, there were over 28,000 injuries resulting in more than a week away from work - that’s an average of over 2,300 injuries per month. Various AIA policies, such as Income Protection, Trauma, Total Permanent Disability, and Health Cover, can provide a strong financial backup for your family if you need to stop working temporarily or permanently.
2. Debt protection: Home loan rates in New Zealand have eased from recent highs of more than 7%. As of July 2025, residential mortgage interest rates are averaging 4.99% to 6.23%. While rates are gradually easing, many homeowners still face far higher costs than during the pandemic low. On top of this, household debt remains high, sitting at 170% of nominal disposable income based on the Reserve Bank of New Zealand’s March 2025 data. In this environment, if income drops due to illness or injury, being able to cover essential costs is crucial. AIA’s Mortgage, Income or Rent Cover and Income Protection Insurance can help pay debts, rents, mortgages, and loans, easing financial stress.
3. Income replacement: The cost of living in New Zealand rose 3% in the 12 months to the December 2024 quarter. AIA’s Income Protection, Trauma, Disability, or Life Cover can help replace the financial input of the insured, enabling your family to maintain a quality of life and keep paying the bills.
4. Education support: The costs of educating your child away from home at tertiary level in New Zealand can range from $20,000 to $40,000 per year, depending on the degree. AIA’s Income Protection, Life, or Trauma Cover ensures your children's education remains uninterrupted, no matter what.

Policywise: Your trusted insurance adviser

Policywise is a 100% free service which tells you which health, life, and disability insurance provider best fits your needs. We offer fast, comprehensive, and easy-to-understand comparisons of all leading providers and a simple summary clearly recommending which insurer is best for your situation.

Not all insurance policies are the same. Policywise can help you sort out the duds, avoid the lemons, understand the fine print and exclusions, and get the right insurance for you and your family.

We make the important decision of where to buy your insurance super easy. We’ll answer your questions, provide experienced advice and quotes, and manage all the back and forth throughout the application process. Taking out your cover through us means you'll have our lifetime support and claims advocacy, and we'll help you negotiate a positive outcome at claim time. We can also take care of lodging any claims on your behalf and back you up if the going gets tough.

Check out the reviews on our homepage for how other New Zealanders have found our service, because now is the time to get your income protection insurance sorted. Give your family or someone you love the most outstanding financial support possible. Book a 5-minute callback with Policywise today; our service is fast and free.