Income Protection Cover

Income protection cover pays you a regular monthly payment if you are unable to work temporarily or permanently because you are sick or injured. Income protection cover is designed to provide you with money to live on while you are not receiving your salary or wages. This cover will pay you until you can return to work, or reach the payment period on your policy. This can be up to the age of 70.

Did you Know…….. New Zealanders claimed more than 101 million dollars in income protection between January 2016 and December 2016

• 1 in 9 men and 1 in 5 women are likely be disabled and off work for more than 12 months before the age of 65
• 5 in 10 men and 7 in 10 women are likely to become disabled due to an illness or accident before they turn 65, preventing them from working for at least 1 month. Of these, nearly a third will still be on claim 12 months after
• Diseases or illnesses are the most common reasons for disability among adults.
• Accidents or injuries are the cause of disability for an estimated $166,300 adults in New Zealand, and the most common type of accident or injury causing disability is one that occurs at work.

What do most people use income protection cover for ?

People can use their income protection cover when they have to take more than two weeks unpaid leave from work because of illness or injury. A combination of sick leave and annual leave will help most employed people cope without working for up to four to six weeks, but what will happen if the disability continues beyond six weeks ? What if the condition renders you unable to work for months or even years?

How does Income Protection cover work ?

A benefit is paid to you if you continue to be disabled after a pre-determined waiting period. You choose how long you want the waiting period to be, most people choose between 30-90 days. The longer the waiting period, the lower your premiums will be.

Types of Income Protection

• Agreed Value : The annual benefit is set at time of proposal and is based on up to 75% of the life Assured’s total income package, including salary or wages and fringe benefits received from company and other rewards after business expenses and before tax, which would be affected by the disability. The claim benefit is the amount as specified on the policy schedule, less any applicable offsets, for example ACC and income from other sources.
• Indemnity Value : Indemnity: The benefit is calculated as a proportion of income at the time you make a claim. it pays the lesser of the monthly insured benefit or 75% of your earnings prior to going on claim less offsets.
• Loss of Earning : In this company will pay your income protection benefit based on 75% of your actual loss of income. This is a popular choice for people with stable incomes, such as Salaried employees.
• Loss of Earning Plus : This option gives you’re the best of both wolrds. Company agree on a monthly benefit when you apply and will pay you the greater of that monthly benefit minus any income you receive while you are disabled, such as ACC support, or 75% of your actual loss of income at the time you claim. This is useful for people with fluctuating incomes such as small business owners.
• Waiting periods :  you have a choice of seven waiting periods, before you receive  the benefit: 2, 4, 8, 13, 26, 52 or 104 weeks.
• Benefit payment periods : The benefit payment period – the amount of time you  receive the benefit – can be for one, two or five years or to age 65 or 70.
• Worldwide Cover : Provides cover anywhere in the world, 24 hours a day.
• Waiver of Premium : removes the burden of paying premiums when you are unable to work due to total disability, saving you money when you need it most. (This benefit must be taken with your Disability income Protection policy).