Income protection premiums are calculated using a range of variables. What variables you select on your policy, as well as your age and occupation can affect the cost of your cover. Below are the main options that will affect the price you pay.

1. The waiting period

The waiting period on your premium is essentially the amount of time that you will have to wait before you will be paid any income replacement benefit should you go on claim. Generally, most insurers offer a four, eight or thirteen-week wait – the longer you wait, the cheaper your premium. In some cases, such as if you have reliable emergency savings, a longer wait period might suit you best. It all depends on how well you could cope financially before payments kick in.

2. The benefit period

A benefit period is the amount of time you would be paid your income protection benefit for. The benefit period can range anywhere from two or five years, or even to the age of 70 and the longer the benefit period, the higher the premium. According to statistics, most people who are unable to work due to an illness or accident will be able to return to work within two years. However, should you be unlucky enough to suffer a serious illness or accident which leaves you unable to ever return to work, do you have a backup plan? 

3. CPI Indexation

Most insurers allow you to select CPI indexation which means that your level of cover will increase every year by the same amount as the New Zealand Consumer Price Index. Selecting this option helps your sum assured to stay in line with inflation. However, this is optional and if you are looking at ways to reduce your income protection premiums this may be a variable you wish to reconsider. However, we recommend speaking with an adviser to ensure your plan is going to be suitable for you in the long term. 

4. Mental Health Limitation

Some insurers give you the option to exclude any claims for being unable to work due to mental health or limiting your benefit period for any claims related to mental health, thereby reducing the cost of your cover. Before considering the removal of this option to reduce your premiums, it is important to weigh up your risks and speak with an adviser.

5. Reduce your level of cover

Whilst not ideal, if you are serious about reducing your premiums you can opt to reduce your level of cover. If you do feel that reducing your level of cover is your only option, you may wish to consider increasing other types of cover, such as trauma cover. Trauma cover is ideal in that you would have cash on hand to deal with a serious health condition. However, the number of conditions covered under trauma cover is limited, whereas income protection provides cover for any injury or illness that causes you to be off work for longer than your selected wait period and that, of course, meets the definition of disability.

As everyone’s circumstances are unique and every provider’s policy is unique, it is important to talk to an advisor about your personal situation before making any changes to your income protection benefit. There are some great tips here at the CAB.

 
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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