What is income protection insurance?

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.

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.

Who can apply for income protection insurance?

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).

How much income can I insure?

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.

What factors affect the cost of premiums?

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.

Are income protection premiums tax-deductible?

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.

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

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.

How long do benefit payments last?

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.

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

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.

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

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

What happens if I cancel or stop paying premiums?

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.

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

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.

Can I work part-time while on a claim?

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.

How does other income affect my benefit?

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.

Does income protection cover mental health conditions?

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.

Does it cover redundancy or job loss?

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.

How does income protection differ from ACC?

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.

What is CompareIncomeProtection.co.nz?

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.

How does your comparison service work?

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.

Do you charge me for your service?

No. Our service is free for you.

Can you also help self-employed individuals?

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.

Do you offer redundancy cover?

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

Why do I need to share my medical information?

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

Agreed value and indemnity income protection insurance.

What is the difference between indemnity insurance and agreed value cover? Don’t worry we get asked this question a lot. Knowing which type of income protection may suit you can be difficult as it depends on many factors such as whether your income is likely to remain stable or fluctuate over time, or whether you are employed or self-employed. The best place to start is to ensure that you have an adviser who understands your circumstances or that you take the time to understand the differences yourself.

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Income Protection insurance generally has two types of cover from which you can select when applying for your cover; indemnity or agreed value. Indemnity cover is based on 75% of your pre-disability income (up to your selected maximum) and any benefit you receive is tax assessable. The downside to indemnity cover is that there is the need to prove loss of income at claim time and a degree of uncertainty about the value of the potential benefit an insurer may end up paying – not what you need at claim time! Given this, is it usually not recommend that someone who is self-employed take cover under an indemnity income protection product.

By comparison, an agreed value benefit offers the insured certainty as the value of any future claim is agreed upon with the insurer at the time of application and any benefit payable is not tax assessable. However, this also means that the proportion of income you can cover is less, usually up to 62.5% of your income at the time of applying, which is great for those with fluctuating income levels, such as the self-employed.

If you would like advice about what’s best for your situation, we can connect you with an experienced adviser – understanding the complexities that go along with Income Protection means they can advise you about benefits that will work for you.

Important: All information on this site is of a general nature only. When you compare or complete the assessment online, we will connect you with an advisor who can give you advice at no charge. All advisers who are authorised to use this site, for their marketing purposes, are authorised financial advisers. A full list of advisers and what they can advise on is listed here under our terms & conditions of this site usage.

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NYASHA LENE

I asked many questions, regarding my policy, and I was answered with clarity all the time, satisfied, Mike simplified everything for me.

Rowena Williams

Quick and easy, actually listen to what I wanted and didn’t try and push anything else on to me

Kieran S

Well knowledgeable and prompt when responding to queries

M Silva

At first I was skeptical but after doing a little reasearch on The Mortgage and Insurance Shop, there was nothing but positive reviews.Blake really went above and beyond to provide me with as many costs/quotes that suited my financial situation. He provided all the information I needed and explained everything, he made sure I was covered in all the areas I needed and provided great support. He's super knowledgeable and very efficient.I highly recommend Blake, he's amazing!

Talahiva Riggs

Hayley Evans is highly recommended broker, very professional communication excellent Hayley was able to help what I wanted I would recommend Hayley to others. My only regret was I did not do this sooner. Talahiva Riggs

Killian O'Neill

Very helpful and knowledgeable

Darryl Karp

Easy to deal with and got the right insurance, thanks Hayley

Yvette .B

Nicole was a great help and had lots of knowledge.I did not feel rushed and was given options, that at the end of the day was my decision.Very happy with how everything worked out and highly recommend!

Julie Pannell

Great service and follow up 💯

Ben Watson

Hayley was professional and accommodating to everything we requested. She helped with multiple revisions to our insurance quotes and was easy to get hold of and quick to respond. It's great having that personal assistance when dealing with multiple policies etc. Thanks

Jodie O'Leary

Awesome service! Highly recommended! Caring and friendly, made every step so easy and stressfree! Go Hayley!!!!! Thanks for all your help!!!!

Jason de Vink

Blake was very knowledgeable and easy to deal with, definitely recommended!

Braeden Pomana

Hayley was a breeze and lovely to deal with highly recomend

Hershey F. Culis

An excellent company! All throughout the process, excellent customer support. The group goes above and above at every stage and is incredibly knowledgable. They are something I wholeheartedly recommend.