As a Kiwi, if you’re self-employed or an employee, you have a level of income protection in the event of an accident at work. However, the key word in the acronymn ACC, is of course accident. What happens when you can’t work because of a health condition? Who protects your income?

Private insurance and ACC work very differently. With ACC you are only covered for up to 80% of your lost earnings if you’re out of work due to an accidental injury. By comparison, private income insurance offers coverage if you are unable to work due to an accident or an illness. This is an important difference to note as according to statistics, the chances of a male aged between 18 and 65 years suffering a critical illness or a permanent or temporary disability is 30% (25% for a female). (quotemonster tables stats, need link).

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Terms of Benefits

In terms of benefit maximums should you make an accident claim, ACC will limit any ongoing income replacement payments to 80% of your delcared income. This is generally not an issue for those in an employed PAYE situation. However, if you are self-employed this can become tricky as you need to prove your loss of earnings through recent business account information and your declared income – so if you have been covering a large portion of business expenses to minimise your tax obligations, you may find yourself qualifying for a much smaller ACC payment than what you would actually need to continue maintaining your standard of living. Also bear in mind that any benefit paid by ACC is taxable.

Benefit Maximums for Private Income Protection

In terms of benefit maximums for private income protection, you may be limited to up to 75% of your income depending upon whether you select an agreed or indemnity value product. In short, an agreed value product provides a smaller benefit but is non-taxable, wheres as an indemnity benefit is usually a larger amount but is taxable (you can read more about the diffferences here). Although at first glance the benefit maximum appear less than the 80% offered by ACC, it is important to consider that with private income protection there is the ability to structure your cover in such a way that should you claim due to an accident, you would receive an payout from both ACC and your private insurer. And more importantly, remember that ACC provides cover only in the event of an accident, private income protection provides cover should you not be able to work due to an accident or an illness.

Due to the nature of income protection and the countless options that are available, it is important to ensure you are making the most of any cover you have, this includes ensuring it is tailored to meet your employment siuation and your budget. With access to experts on all things income protection, we can help with comparions and price indications, offer you tips for consideration and also point you in the right direction to ensure you have the right cover for the right situation.  

 
Rachael Manson
Rachael Manson
03:27 30 May 20
Alan has been brilliant to deal with and extremely patient as we worked through the changes that we were seeking for our life cover and income protection requirements.
Celia Grigg
Celia Grigg
23:36 21 May 20
Hayley was great, from responding to my initial inquiry to finalising my policy. She provided good information and communicated with me every step of the way - efficient, thorough and friendly. She went above and beyond.
Wang Emily
Wang Emily
01:59 19 Apr 20
Hayley has been very helpful and professional with her insurance services, she is committed to work for the best interest of her clients , friendly to deal with and flexible to suit clients’ requirement. Definitely Recommended!
Toko Ngakiau
Toko Ngakiau
20:19 29 Mar 20
I am very wary of random calls about insurance, but I found Daniel from IronOak to be very transparent and a pleasure to deal with.On all occasions he was able to come out and visit us. He explained in detail what we were looking at, and offered a number of comparisons. HIGHLY RECOMMENDED
Hannah Lawrence
Hannah Lawrence
21:00 15 Mar 20
Hayley was very efficient and always delivered on her promises. She put together a good package for me. I would highly recommend Hayley.
Jay Nimbus
Jay Nimbus
08:11 15 Mar 20
Daniel was great to deal with and made seemingly complicated decisions a lot simpler than I expected. I had been stressing about it for a while, wish I had got in touch sooner. Much thanks!
Annette Page
Annette Page
22:39 01 Mar 20
Prompt, professional, pragmatic advice and service. Many thanks.
CrazySmurf Azrial
CrazySmurf Azrial
11:20 28 Feb 20
Hayley was awesome to deal with, answered all my questions and followed up with me weekly to keep me informed throughout the whole process. It can be daunting but she made the process easy. She was easy to talk to and didn't feel pressured.Thanks Hayley for organising everything and helping me through the whole process.
Paul has helped me to find the best option for my family insurance. He made everything easy.
Trixie Lawton
Trixie Lawton
15:55 25 Dec 19
I found Hayley very pleasant to speak to and was explained everything in great detail and in easy terms
Kayleigh Price
Kayleigh Price
22:12 16 Dec 19
Paul was very easy to deal with and made income protection insurance seem much clearer. He gave sound advice, was efficient, friendly and I would recommend him to anyone.
Sunil Kadri
Sunil Kadri
23:23 01 Dec 19
Paul did alot of work to find the right policy for me, was very patient as I wavered, and even helped me with the right questions to ask of my insurer on their parallel policy. Overall he proved an excellent broker whom I'd gladly recommend, and go back to myself.
 

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