We provide you with quotes from all of New Zealand’s leading insurers and then give expert advice from qualified professionals to ensure you get the policy that best suits your individual circumstances. With the current COVID-19 pandemic, insurance becomes even more important please call us or go to our COVID-19 and Life Insurance page for further details. Currently you can still get life insurance and income protection with no exclusions for COVID-19 with most companies.
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Compare income protection insurance quotes from all of New Zealand’s leading income protection insurers. Smart Insure will get all of the latest income protection insurance rates and present them to you in an easy to understand format with recommendations on which policies will best suit your individual circumstances.
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Income Protection Insurance – Do I need it if I am not self-employed?
Income Protection insurance protects a person’s income if they cannot work due to illness or injury and in most cases this also includes depression.
Income insurance provides cover for a percentage of your income after a stand down period that can range from 2 weeks up to 2 years and a benefit period ranging from 1 year up to the age of retirement and/or 70 years. Obviously we have ACC in New Zealand which provides cover after 1 week for up to 80% of your salary up to a certain level which is currently around $94,000 p.a. So if you earn over this amount then ACC won’t cover it. This only covers accident related incidents so if you are ill then you are relying on either your employer or WINZ.
Any sickness related claim from WINZ also assesses any income that comes from a partner or spouse and this is offset. The WINZ pay-out is considerably less than ACC and before housing, children expenses you would be looking at about $200 per week.
So if I was self-employed should I have it? The short answer is yes you should, because if you can’t work then you can’t earn an income. Being self-employed you do need some advice around the structure and type of income protection you should have. As you don’t want to have any surprises at claim time. You also have the ability to structure your ACC and private insurance cover together as you can alter your ACC levies. There are also income benefits out there which provide for broken bones which can be beneficial if you have a longer wait period before your insurance starts.The income protection premiums can also be tax deductible depending on the type of cover you get, this can be for self-employed and PAYE earners.
Another great aspect of income protection insurance is it protects your occupation so for example if you were a builder and something happened which meant you couldn’t be a builder but you could be a basket weaver then you have options. You could choose not to work and remain on claim or weave baskets and the insurance would cover the gap between what you were earning as a builder and what you are now earning as a basket weaver.
Self employed or business owners also often have their family houses as security for their businesses and when things go wrong they can go really wrong. Do I need income protection if I am a salary earner? It all depends on your risk tolerance but your income is what pays the bills, be it food, mortgage or living and children’s costs. If this wasn’t coming in how would you survive? Everyone is always concerned about insuring their cars, but what about the people driving them. If you had a money printing machine in the corner of your house would you insure it? Of course you would, so why don’t you have protection on yourself being the money maker.
A lot of people we come across talk about their employer will look after them if they get sick, so we ask them is it in your contract. Is their unlimited leave, has someone at your workplace had several months off work due to illness? Most workplaces cannot afford to cover sick employees for ever, so once sick and holiday leave is used up it is up to both the company and the manager’s discretion. We recommend not relying on this and having some protection in place for peace of mind, even if you put in place some mortgage protection (a form of income protection) which will cover the mortgage payments if you get sick or injured. In the event of an ACC claim you would receive both your ACC payments the monthly mortgage payments.
Even if you took out a smaller monthly cover, something is better than nothing and in our industry we see the difference what having cover has to a family or individual and what happens when you don’t have cover. Get a free quote from us today for your income protection insurance and keep yourself and your loved ones protected.