Why do you need Income Protection? 

Your greatest asset is your ability to earn an income. So what would happen if you suffered an illness or injury leaving you unable to work? How long could your family survive? What would happen if you couldn’t pay the mortgage or rent? How could you cope with the demands of your condition while under financial stress as well?

Income Protection Cover can provide you with a percentage of your lost income if you suffer from a covered condition – helping you to maintain your lifestyle and support your family until you are no longer disabled.*

* or to a maximum benefit period as per your policy.

New Zealand income protection stats

Who claims for income protection?

• The most common income protection claims are related to mental health (26%), cancer (21%), orthopeaedic (19%), neurology (9%) and heart (7%) ⁴
  
  
• The highest amount claimed for on an income protection policy is $1.2 million. ⁵
  
  
• 50% of claimants on an income protection policy are aged between 30-50 when they initially make a claim. ⁵
  
  
• The average amount of time people spend as a claimant on an income protection policy is 1.1 years. ⁴

What are your options if you don’t have income protection insurance?

• Use sick leave: but would you have enough to cover even a medium term illness lasting a month or more?
  
• Use savings: but how long would the savings last?
  
• Rely on ACC: but this only covers accidents, not illness.
  
• Rely on your partner’s income: but is it enough to run a household? Can they hold a full time job as well as look after you?
  
• Borrow money: but who would lend it to you? How would you pay it back?
  
• Sell assets: but are you willing to lose your home?
  
• Rely on the sickness benefit: but would it be enough?

Could you and your family survive on this?

The following table shows the current Sickness Benefit rates as at 1 October 2010. Could you afford to live on this?⁶

Case studies

For examples of how income protection insurance has helped real people, read our life insurance case studies >>

Sources: 1 Davies Financial and Actuarial Limited, January 2010. 2 Accident Compensation Corporation, January 2010. 3 For 2006/07 Statistics New Zealand: New Zealand in profile. 4 TOWER Health & Life claims information, Dec 2009. 5 TOWER Health & Life claims information over the last three years ending Dec 2009. 6 The Sickness Benefit is a weekly payment which helps people who aren't currently working or are working less hours, because they are sick, injured, disabled or pregnant. The net rates are after tax at 'M'. Work and Income NZ.