Personal protection
If you can’t work, income protection pays the bills.
Income protection replaces a percentage of your salary if illness or injury stops you working. It’s the cover that quietly keeps mortgages serviced and groceries on the table for months. or years. while you recover.
Who it’s for
This page is for you if…
- Anyone whose household depends on their salary continuing
- Self-employed Kiwis (no employer sick leave, no group cover)
- Professionals and tradespeople with specialist skills
- Single-income households
What it does
How the cover actually works.
- Monthly benefit of typically 65–75% of pre-tax income, paid for a chosen benefit period
- Triggered by illness or injury that meets the policy’s definition of disability
- Wait period (4, 8, 13, 26, or 52 weeks) chosen at the start. longer wait = lower premium
- Benefit period from 2 years to age 65. your call
NZ context
What you should know about this in New Zealand.
ACC is for accident. not illness
ACC pays roughly 80% of earnings, but only if your inability to work is due to accidental injury. Cancer, mental illness, heart conditions, and most chronic disease aren’t covered. Income protection fills that gap.
Premiums are usually tax-deductible
For most NZ wage and salary earners, premiums on indemnity-style income protection are deductible against your taxable income. check with your accountant.
Wait + benefit period drives cost more than sum insured
Most clients save the most premium by extending the wait period from 4 to 13 weeks, not by lowering the monthly benefit.
Common myths
Three things we hear that aren’t quite right.
“ACC covers me.”
ACC covers accidental injury only. The most common cause of long-term inability to work in NZ is cancer, mental illness, or musculoskeletal disease. none ACC-covered.
“My employer’s sick leave is enough.”
Statutory sick leave in NZ is 10 days a year. A serious illness can mean months off. and self-employed Kiwis don’t even have that.
“I’ll just stop contributing to KiwiSaver if I’m off work.”
You also stop paying the mortgage, the power bill, and the school fees. Income protection covers those, not just savings.
What an adviser does
Why this is hard to do on your own.
- Match the policy definition of disability to your specific occupation. ‘own occupation’ vs. ‘any occupation’ matters a lot for professionals.
- Set wait + benefit period at the sweet spot for your sick leave, savings, and risk appetite.
- Choose indemnity vs. agreed-value cover correctly for self-employed clients.
- Compare offset clauses (how ACC, sick pay, or KiwiSaver payments interact with the benefit).