Income Protection for Self-Employed

When it comes to running your own business there is usually no such thing as sick leave. If you have to take a day off due to illness, it is usually yourself that absorbs the cost. In saying that, the odd sick day here and there is probably not going to ruin you financially. However, what happens when you are self-employed and you have to take an extended period off work due to a serious illness or accident? What happens to your biggest asset, your income-earning ability?

In the event of a serious accident, the self-employed have access to ACC which provides business owners with a safety net of up to 80% of their pre-disability income. Note that this 80% is based on your declared income, so if you minimise income for tax purposes e.g. split your income with your spouse, this may leave you severely out of pocket when it comes time to lodge an ACC claim and what happens if you are unable to continue working due to an illness?

As ACC only covers accidents, self-employed works need to ensure they have other means to replace their income should they be unable to work due to an illness. This is where private income protection comes in. By taking out an income protection insurance policy you can select a level of replacement income to receive if you suffer a serious accident or fall ill for an extended period of time, thereby safeguarding not only your future, but the future of all those who reply on you financially.

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To those who are self-employed, it may appear that you are effectively paying twice for income protection; once through your private income protection insurance premiums and again through your ACC levies. The answer is, yes and no.

Private Income Protection

With private income protection, some benefits are offset by what you receive from ACC. For example, if you are self-employed with an annual income of $100,000 and you go on claim due to an accident, ACC will pay you $80,000 (80% of your pre-disability income) and your insurer will most likely not make any payments due to the offset, unless you have taken cover under a benefit which is not offset by ACC payments – which is why it is important to go over your income protection options with an experienced advisor who specialises in designing income protection plans for the self-employed.

If you are self-employed you are lucky enough to be in the position to choose what type of ACC cover applies to you, either ACC CoverPlus or ACC CoverPlus Extra. Under CoverPlus Extra, you have the option to select how much of your income you would like ACC to cover in the event of an accident. This gives you the opportunity to reduce your ACC levies and use the savings towards your private income protection premiums.  

No matter who you speak to regarding your income protection and ACC cover, one important point to realise is that you are more likely to be unable to continue working due to an illness rather than an accident, so making sure you have the right cover in place to protect your biggest asset is worthwhile.

 

miriam sciascia
miriam sciascia
21:53 05 Oct 20
Nicole is fantastic. Im very busy as most of us are and Nicole did the hard yards for me. Highly recommend if you want someone on your side every step of the way.Thank you xx
Lisa McTavish
Lisa McTavish
22:35 03 Oct 20
Kelsey was fast and efficient in her procurement of new rates for me. She was happy to deal with me being unable to video chat due to work issues and got the job done quickly and easily.Thanks again.
A Google User
A Google User
20:30 23 Sep 20
Daniel made things simple, new his stuff and took away the hours of research I would have had to do to get the right insurance. I take comfort in the fact I didn't have to waste my time and have got the right products for my needs.
Paul Rose
Paul Rose
07:37 23 Sep 20
Hayley was very professional and knowledgeable in explaining and setting up policies for me. Highly recommend
Paula Callen
Paula Callen
23:19 17 Sep 20
Hayley was professional, discussed different options for what I want and kept me informed at all times. Would recommend her services.
celia dasler
celia dasler
07:55 30 Aug 20
Hayley was a pleasure to work with. Helpful efficient attentive. 10/10.
Andrew Harvey
Andrew Harvey
23:44 18 Aug 20
Nicole has made our transition from one insurance broke agency to hers so easy.Very happy with the professional manner in which she handled our policies - she also saw loop holes and saved us $$$ with the same policies we had with the other agency. Highly recommend!Thanks Andrew
Kim Griffiths
Kim Griffiths
04:54 15 Aug 20
Hayley was the best to work with and I loved the personal service and she was also so friendly and easy to talk and deal with.
Emma Clare
Emma Clare
20:47 04 Aug 20
Paul was efficient, friendly and forthcoming. Very happy with the service I received!
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.
Dawn Randell
Dawn Randell
02:02 18 Nov 19
Thank you Hayley you were fantastic at sorting out the best choices for me
Sophie Speer
Sophie Speer
23:08 26 Sep 19
Blake was great to work with. He explained my options and sorted me out with the best policy. I really appreciated his expert advice and would recommend him highly.
Nigel Flynn
Nigel Flynn
05:50 18 Sep 19
Very helpful,learnt a lot of things I did not know about this type of insurance.
Nat Malc
Nat Malc
01:11 04 Sep 19
Great, professional, knowledgeable help from Paul, so easy and friendly to deal with.
manoj valiaveetil
manoj valiaveetil
01:00 30 Aug 19
I found Paul to be excellent in terms of understanding my needs and formulate an action plan and I would recommend him for anyone to get financial advice.
manoj valiaveetil
manoj valiaveetil
01:00 30 Aug 19
I found Paul to be excellent in terms of understanding my needs and formulate an action plan and I would recommend him for anyone to get financial advice.
Mathew Harding
Mathew Harding
22:45 22 Aug 19
Blake makes the whole process really easy. I'd recommend his services to anyone.
Hank Feng
Hank Feng
20:50 16 Aug 19
Jeff has been great at helping me and my family with getting the right amount of cover that fits within my budget. I got a much better insurance package than the one provided by my previous broker. I appreciate him taking the time to go through some of my questions and he was always patient in explaining them to me. Definitely recommend if anyone was looking at getting new insurance cover or wanting a review of their current one.
Craig Mackie
Craig Mackie
03:07 16 Aug 19
Paul gave me all the information and advice I needed to make an informed decision on the best insurance for my situation.
jason mcmillan
jason mcmillan
19:20 08 Aug 19
Easy to work with and get a hold of. Genuinely wanting to get you the best cover and rate. Thanks again!
Tim Rose
Tim Rose
01:39 07 Aug 19
Not the biggest policy in the world as I'm just starting out in my own business appreciate fast turn around and explanation.
Austin Emirali
Austin Emirali
07:58 06 Aug 19
Thanks for your help. Glad to know we’re on the right track with our cover

 

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