Question 1

What is income protection insurance?

Accepted Answer

Income protection is a policy that pays you a regular benefit if you can’t work because of illness or injury. You choose a waiting period and a benefit period. The benefit is typically up to 75% of your pre-tax income (subject to insurer caps) and is paid to you so you can cover everyday costs.

Question 2

Why would I need it?

Accepted Answer

Income protection helps you keep up with rent or mortgage, utilities, groceries and childcare if you’re off work. Income protection can cover both illness and injury and can work alongside ACC (your benefit may be offset). It’s especially valuable if you’re self-employed, a contractor, or have limited sick leave.

Question 3

Who can apply for income protection insurance?

Accepted Answer

Most New Zealand residents aged roughly 16–60 can apply (some insurers accept up to 65). You typically need to be employed or self-employed and working at least part-time (about 15+ hours a week).

Question 4

How much income can I insure?

Accepted Answer

Commonly up to 75% of your regular pre-tax income, subject to insurer caps (often up to $30,000 per month). Choose a benefit that realistically covers essential expenses after factoring in any sick leave or other support you have.

Question 5

What factors affect the cost of premiums?

Accepted Answer

Age, gender, occupation risk, smoking status, and health history all matter. Policy settings also drive price: shorter waiting periods, higher benefit amounts, and longer benefit periods cost more.

Question 6

Are income protection premiums tax-deductible?

Accepted Answer

Often yes—if the benefit you would receive is taxable income. If benefits were non-taxable, premiums typically aren’t deductible. Always confirm your situation with an accountant or the IRD.

Question 7

What is a waiting period, and how does it work?

Accepted Answer

The waiting period is the amount of time you must be unable to work before payments begin. Options commonly range from 2 to 104 weeks. Shorter waits mean faster pay-outs but higher premiums; longer waits reduce premiums but require savings or sick leave to bridge the gap.

Question 8

How long do benefit payments last?

Accepted Answer

You choose a benefit period when you take out your policy—commonly 2 years, 5 years, or until age 65 or 70. Longer benefit periods cost more.

Question 9

What happens if I return to work but relapse with the same condition?

Accepted Answer

If the same illness or injury prevents you from working again within a typical reinstatement window (typically around 12 months), payments can resume without a new waiting period. Please refer to your policy wording for the exact timeframe.

Question 10

Do I have to keep paying premiums if I’m on a claim?

Accepted Answer

Usually not. Most policies include a Waiver of Premium while you’re receiving benefit payments.

Question 11

What happens if I cancel or stop paying premiums?

Accepted Answer

If you stop paying, your policy will lapse and cover end. When you first take out a policy, most NZ life/health insurers offer a 14-day free-look period from when you receive your policy documents—during that time you can cancel for a full refund if no claim has been made.

Question 12

What is covered under income protection, and what isn’t?

Accepted Answer

Cover generally includes illnesses and injuries that stop you from working. Common exclusions include self-inflicted injuries, criminal acts, war, and non-disclosed pre-existing conditions, though complications that prevent you from working may be covered.

Question 13

Can I work part-time while on a claim?

Accepted Answer

Sometimes, yes. If you’re partially disabled and only able to work reduced hours or earn less, many policies offer a partial/relapse or partial disability benefit to help make up the shortfall.

Question 14

How does other income affect my benefit?

Accepted Answer

Other income—such as ACC, sick-leave pay, or payments from another policy—may be offset so you don’t receive more than your insured percentage.

Question 15

Does income protection cover mental health conditions?

Accepted Answer

Many policies cover mental-health conditions (e.g., depression or anxiety) provided you disclose your history. Some insurers may apply exclusions or set specific limits (e.g., a maximum 24-month benefit period) for mental-health claims—check the policy.

Question 16

Does it cover redundancy or job loss?

Accepted Answer

No—income protection covers illness and injury, not redundancy. Some policies include a redundancy premium-waiver feature that keeps your cover in force for a short period without premiums if you’re made redundant.

Question 17

How does income protection differ from ACC?

Accepted Answer

ACC covers accidental injuries and typically pays up to a portion of your income. Income protection can cover both illness and injury and may be offset by any ACC payments—working together to provide broader protection.

Question 18

What is CompareIncomeProtection.co.nz?

Accepted Answer

We’re a free, independent service that helps New Zealanders compare income protection policies. Our goal is to find the best fit for your needs by comparing quotes and benefits from multiple leading insurers.

Question 19

How does your comparison service work?

Accepted Answer

Complete a short form with your details. Our licensed advisers gather quotes across the market, compare benefits, and present tailored options. We also handle paperwork and answer questions along the way.

Question 20

Do you charge me for your service?

Accepted Answer

No. Our service is free for you.

Question 21

Can you also help self-employed individuals?

Accepted Answer

Yes. Income protection is especially valuable if you don’t have sick leave. We can also help you to find the best cover for you.

Question 22

Do you offer redundancy cover?

Accepted Answer

Our focus is on income protection, but we can also advise on stand-alone redundancy options and premium waiver features that some insurers offer.

Question 23

Why do I need to share my medical information?

Accepted Answer

Insurers require full disclosure of your health history to ensure valid claims. Non-disclosure can lead to claims being declined.

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