Income Protection
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What Is Income Protection Insurance?
Income Protection Insurance (IP) is designed to provide a regular benefit that may help replace a portion of your income if you are unable to work due to illness or injury, subject to the terms and conditions of the policy. In New Zealand, ACC generally provides cover for accidental injuries, while Income Protection insurance may help provide financial support in situations such as illness or sickness where ACC may not apply.
This can help you meet your financial commitments—mortgage, bills, family expenses—when you’re unable to earn.
At Global Finance, we work with a wide range of New Zealand insurers to tailor income protection policies that suit your personal needs, whether you're employed, self-employed, or a contractor.
Why Income Protection Insurance Is Important?
Income Protection Insurance can help with the following:
Protect your lifestyle and obligations
- If you suffer a serious illness, a good IPI policy helps you maintain living standards.
Bridges the gap
- ACC doesn't cover many health or illness issues (e.g. cancer, long COVID, chronic disease), so income protection insurance can sometimes fill that gap.
Peace of mind
- Knowing you have a safety net gives confidence to rest and recover without financial stress.
Flexible features
- Policies often let you choose benefit amounts, waiting periods, and benefit durations.
Key Features & Terms to Understand
| Feature | What It Means | Why It Matters |
|---|---|---|
| Benefit period | The maximum length you can claim (e.g. 2 years, 5 years, to age 65) | Longer periods cost more but provide more security |
| Waiting (deferred) period | The time you wait after becoming unable to work before claiming benefits (e.g. 4, 8, 13, 26 weeks) | Shorter periods cost more; balance with your savings buffer |
| Payable percentage / replacement ratio | Percentage of your income that the policy pays (often 62.5 to 75%) | Ensures you retain incentive to recover; limits insurer exposure |
| Partial or residual benefit | If you can return to work partly, you may still get a top-up benefit | Encourages graded returns, not an all-or-nothing approach |
| Exclusions / pre-existing conditions | Conditions you have before the policy may be excluded | Important to declare all medical history properly |
Features may vary depending on the policy wording and terms & conditions of a particular insurer.
Income Protection Insurance Costs & Premiums
The cost of income protection insurance depends on several key factors. Understanding these helps you choose the right balance between affordability and coverage.
Personal Profile
Your age, gender, health, and occupation directly affect your premium.
- Younger and healthier individuals usually pay less.
- Occupations with higher physical or safety risks generally cost more to insure.
Benefit Structure
The amount of monthly benefit, waiting period, and benefit duration are major pricing drivers.
- A higher benefit amount increases premiums.
- A shorter waiting period (how soon payments start after illness or injury) also raises the cost.
- A longer benefit period (how long payments continue) adds further to premiums but offers more protection.
Policy Options & Add-Ons
Optional features can enhance flexibility and value but also impact the cost:
- Indexation: Automatically increases your benefit each year to match inflation.
- Residual or Partial Benefit: Pays part of your benefit if you return to work part-time.
- Premium Waiver: Lets you pause premium payments while you’re on claim.
Why Choose Global Finance?
Tailored Protection for Your Lifestyle
We partner with New Zealand’s top insurers to design income protection that fits your work and life. Whether you’re self-employed or salaried, your cover is structured around your income, occupation, and health — keeping your lifestyle secure if you can’t work.
Expert Advice, Simplified
Our advisers make complex choices like agreed value vs. indemnity easy to understand. We compare premiums, waiting periods, and benefit terms to help you find the right balance between cost, flexibility, and protection.
Comprehensive Benefits & Flexibility
We look to ensure your policy includes valuable features such as premium waivers, partial disability benefits, and rehabilitation or return-to-work support — tailored to protect your income and wellbeing.
Support When It Matters Most
From setup to claim, we handle the details so you can focus on recovery. Our team helps with smooth processing and prompt payout where a claim is payable.
Frequently Asked Questions
Yes, income protection insurance premiums are generally tax-deductible in New Zealand. However, the benefit payments you receive are typically considered taxable income only if you are claiming premiums as expenses. Talk to an accountant or tax specialist for detailed information.
Payments from ACC or Work and Income New Zealand (WINZ) may be considered when calculating your income protection benefit. This is commonly referred to as an “offset,” and the way it applies depends on the policy terms.
Yes. Most income protection policies in New Zealand limit coverage to up to 75% of your pre-tax income. Additionally, insurers often set a maximum monthly benefit, typically ranging from $15,000 to $30,000 per month, depending on the insurer and policy.
Some policies offer a “partial disability benefit” or “top-up” option, which pays you the difference if your illness or injury reduces your income but doesn’t completely stop you from working.
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While we're proud of the awards we've received over the years, our greatest achievement is helping customers achieve their financial goals with confidence.
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Head Office
Kudos Business Centre18-22 / 203 Kirkbride Road,
Airport Oaks, Auckland 2022
Call 09 255 5500
Email info@globalfinance.co.nz