Total Permanent Disablement (TPD) Insurance

Best disablement insurance plans in NZ (overview)

How much does disablement insurance cost? 2026 quote comparisons

What is total permanent disablement (TPD) insurance and how does it work?

What is considered a total and permanent disability?

Waiting period

What are my options for getting disability insurance in New Zealand?

1. Accelerated TPD cover

2. Standalone TPD cover

3. Trauma insurance with optional TPD cover

Who needs disability insurance?

Why is disability insurance important?

Key features and benefits (built-in and optional)

How much disability insurance do I need?

Why compare TPD plans through Policywise

How Policywise works in 3 easy steps

How Policywise generally compares to other online quote providers

FAQs

Best disablement insurance plans in NZ (overview)

Total permanent disability (TPD) insurance pays a non-taxable lump sum if you are permanently disabled and can’t go back to your occupation. You choose the disability cover you want, which can go as high as $5 million, depending on your insurer and circumstances.

Please note: Terms and conditions, as well as exclusions, apply to all insurance products. It's important to review your policy carefully to understand the specific terms of cover and any limitations. This ensures that you have a clear understanding of the protection provided by each product. If you have any questions or would like some help finding the right policy, book a callback with a Policywise adviser; it's fast and free.

The benefits listed here are by no means complete. Contact Policywise to:

• get a comprehensive comparison of disablement insurance features and quotes
• discuss customisation options, such as combining it with life or trauma insurance
• find ways to save on premium costs.

How much does disablement insurance cost? 2026 quote comparisons

When buying disablement insurance, you have several options. You can get it as:

• a standalone policy
• an accelerated benefit to be deducted from your life cover, or
• an additional benefit in your trauma insurance.

Tip: Combining TPD with life insurance can be a cost-effective way to strengthen your overall cover. But if you want your full life cover preserved even after a disability claim, standalone TPD may suit you better.

Below are sample quotes showing fortnightly premiums for different:

• policy structures (standalone TPD, accelerated TPD)
• sum insured amounts
• disability classifications (own occupation, any occupation, non-earner/non-occupation; see What is considered a total and permanent disability? for more information).

*Based on quotes from AIA, Asteron Life, Chubb, Fidelity Life, nib, and Partners Life.

What is total permanent disablement (TPD) insurance and how does it work?

Total permanent disablement cover provides a non-taxable lump sum payment if a total or partial permanent disability prevents you from going back to your occupation. Your occupation can be:

• your work (employed or self-employed)
• your business
• being a student, or
• performing unpaid household duties.

Depending on your policy, your TPD plan may include additional built-in or optional benefits, such as:

• Reimbursements for professional financial and legal advice on how best to use your TPD claim
• Payments for psychologist or psychiatrist consultations
• Reimbursements of costs incurred to go back to New Zealand if you suffer a complete disability while living overseas
• Support for your companion’s accommodation and transportation expenses if you need to go to another region for medical assessment or treatment.

What is considered a total and permanent disability?

The definition of total permanent disability depends on the type of TPD cover you have.

• Own occupation: You’re unable to do your pre-disability occupation due to an illness or injury. You’ll receive a payout even if you still have the capacity to work in a different occupation.
• Any occupation: An illness or injury prevents you from resuming your pre-disability occupation or any job that’s appropriate for your work experience or education.
• For both own occupation and any occupation TPD cover: You’re diagnosed with a condition that prevents you from working ever again. Some of these conditions include Alzheimer’s disease, dementia, motor neurone disease, multiple sclerosis, Parkinson’s disease, paralysis, major head trauma, and severe rheumatoid arthritis. Check the insurer’s policy for a complete list of these conditions.
• Modified TPD/Non-occupational cover: Some insurers offer this cover for homemakers, stay-at-home parents, and other individuals who are not in paid employment or not eligible for own occupation or any occupation cover.

Depending on your plan, modified TPD/non-occupational cover will provide a lump sum under the following circumstances:

• Homemakers’ permanent disability prevents them from resuming their full-time household duties
• Loss of limbs
• Blindness
• Permanent cognitive impairment
• Inability to perform at least two activities of daily living (bathing, eating and drinking, dressing, ambulation/walking, and toileting) without physical support from another person.

Waiting period

Most TPD policies include a waiting period (or stand-down period). This means you must be continuously incapacitated and unable to work for a set time before your benefit can be paid.

In many cases, this is around three months, although the exact terms depend on the policy. Some TPD plans allow a shorter or waived waiting period for certain permanent conditions.

What are my options for getting disability insurance in New Zealand?

1. Accelerated TPD cover

This option links disablement cover to your life insurance policy, meaning if you make a TPD claim, your life cover is reduced by your TPD claim amount.

Pro: You are covered for permanent disablement as well as terminal illness and death. If you pass away, your loved ones will receive a lump sum benefit. This is especially important if you are the primary earner, have dependants, or significant financial commitments.

Con: Your loved ones will receive a lower life insurance payout if you pass away after you’ve made a TPD insurance claim.

TIP: If you want to be able to reinstate your life cover in case of a TPD claim, consider adding a life cover buy-back to your policy.

2. Standalone TPD cover

This is a dedicated policy that provides a lump sum payout if you meet your insurer’s criteria for total or partial permanent disability based on your type of TPD cover (own or any occupation, or modified TPD).

Pro: If you have life insurance, this TPD payout does not affect the life cover amount your family can receive if you pass away.

Con: Standalone TPD cover does not pay out on death. If providing a significant lump sum to your loved ones when you die is important, you’ll need a separate life insurance policy alongside it.

3. Trauma insurance with optional TPD cover

Several trauma (critical illness) insurance plans let you add a TPD cover, so you can receive the sum insured if you become totally and permanently disabled.

• Pro: It combines protection for critical illnesses and injuries and total permanent disability, often at a lower overall premium.
• Con: A TPD claim may use up your trauma cover, leaving you without protection for future serious illnesses.

Talk to a Policywise adviser to learn more about these options and get personalised quotes.

Who needs disability insurance?

TPD insurance may be worth considering if you:

• don’t have enough savings or emergency funds to cover years without work
• have a partner, children, or ageing parents who rely on you
• work in a physically demanding or high‑risk role
• don’t have other cover that would help pay for medical costs and replace lost income if you can no longer work in your occupation or any occupation
• have significant financial commitments, such as a home loan
• prefer financial independence rather than relying solely on government support
• want certainty that a permanent disability won’t drain your hard-earned savings and investments, or derail your long-term goals (such as retirement or your children’s education).

Why is disability insurance important?

1. Disabilities can happen to anyone at any age.

• In 2023, about 17% of New Zealanders were disabled. (Stats NZ)
• The disability rate for adults aged 15-44 was 12%, and for those aged 45-64, it was 17%. (Stats NZ)
• Over 9,500 Kiwis experience stroke each year. It is among the most common causes of death and severe disability in adults. Around 25% of victims are under 65 years old. (Health New Zealand; Neurological Foundation)
• Claims data from some insurers reveal that significant TPD claims were paid to those in their 40s and 50s.

2. Having a disability can impact your employment and income

• In the June 2025 quarter, the unemployment rate for disabled people aged 15-64 was 14.1%, nearly three times that of those without disabilities (5.2%). (Stats NZ)
• In the June 2025 quarter, the median weekly income of disabled individuals ($526) was 45% lower than that of non-disabled people ($1,151). (Whaikaha - Ministry of Disabled People).

3. It helps pay the bills while you can’t earn

• A permanent disability may disrupt your capacity to work, limit your job prospects, and impact your income.
• Depending on your condition, you may never be able to return to work, or you may need to switch career paths and start over in a new industry.
• Some conditions may require long-term care, ongoing medications, home or vehicle modifications, or specialised equipment, adding financial pressure on you and your family. Your spouse may also have to take unpaid leave or work reduced hours to care for you.

With TPD insurance, you can use your lump sum benefit to cover your medical costs, household expenses, or pay a carer for several months or years. You can also use it to start a business or retrain to switch occupations.

4. It augments publicly-funded benefits

The government has several programmes and benefits for those who have a disability, including:

• The Accident Compensation Corporation (ACC) for accidents and work-related injuries
• Disability allowances for those with ongoing disability-related costs
• Jobseeker support for those who can’t look for work due to a health condition, injury, or disability
• New Zealand’s public healthcare system, which covers treatment for chronic conditions.

However, these options have limitations.

• Disability-related benefits have specific qualifications and caps and may not be enough to cover your expenses and maintain your family’s lifestyle. For instance, ACC won’t cover illnesses like a heart attack, stroke, or cancer. If an illness leaves you permanently disabled and unable to work, ACC offers no financial support.
• While the public health system is free, thousands of patients face lengthy waiting lists to see a specialist, have diagnostic tests, or get elective treatment. While private medical care is available, it isn’t cheap.

Having disability insurance means you are not reliant on what the New Zealand government can provide. You can use your TPD benefit to cover any financial shortfall or pay for private healthcare, protecting your family from borrowing funds, defaulting on debt repayments, or being pushed into poverty.

5. It can help preserve your savings and assets

A permanent disability that stops you from working can easily drain savings and funds you've earmarked for a home deposit, investment, your children’s education, or your and your spouse’s retirement.

The substantial benefit from your disability insurance can help you cover ongoing expenses without sacrificing your long-term plans and wealth-building goals.

Key features and benefits (built-in and optional)

TPD insurance products have built-in benefits and optional add-ons specially designed to provide clients with the types of assistance they’ll need in case of a total and permanent disability. Refer to your insurer’s policy document for the full details and benefit limits.