Here is a list of things that you should consider when looking at income prote
ction
1. Income Protection offsets against an ACC payout, so when looking at protecting yourself with private cover with insurance, consider taking out a combination of both income protection and mortgage protection (mortgage protection does not offset against ACC payments)
2. Consider taking a longer wait period as this can save you a considerable amount of money; for example changing from a 1 month wait period to a 2 month wait period saves your about 20% on your premiums and increasing it 3 months saves you on average 43% on your premiums
3. Income Protection premiums are tax deductible, if you have an indemnity income protection policy then the premiums you pay are tax deductible, even if you are on PAYE you an claim these as an expense
4. Two insurers offer a broken bone benefit which pays out regardless of whether you stop work, this includes but not limited to fractured or broken legs, arms, and collar bones. This is paid out regardless of whether you stop work or not
5. If you are self employed you have an option of winding down your ACC cover and making it work in conjunction with your private insurance
6. Income Protection covers depression and mental illness, unless you have a pre existing condition where it can be excluded
7. Not all products are equal so when comparing policies, make sure you are comparing apples with apples as opposed to oranges. If a product looks especially cheap, generally there will be a reason for that.
8. You can get redundancy cover although it is expensive and generally a risk you should self insure for – cover is limited to 6 months
9. If you take out a benefit period to age 65 or age 70 this means if you go on claim and remain on claim until the benefit period ends your claim is linked to inflation so the claim amount goes up each year
10. Income Protection protects you for your occupation so if you became unable to do your occupation but you could do a lessor occupation you have the choice of either not working at all or working and the income protection benefit topping up the difference in income