Income Cover

Income Cover provides a financial safety net should you be disabled as a result of sickness or injury, and unable to earn your regular income. The monthly benefit is designed to replace a significant portion of lost income to help maintain your usual lifestyle during treatment and recovery.

Income Cover is for Wage Earners, Salaried Employees and Self-Employed Individuals.

Your choice of waiting periods, cover terms and payment terms

Income Replacement Insurance provides you with the flexibility to structure your plan to most closely suit your needs. You have a choice of six waiting periods, the period of time before your monthly benefit begins after becoming disabled; either 4, 8, 13, 26, 52, or 104 weeks. You also have a choice of two cover terms, either to age 65 or 70, and six payment term options of three, six or twelve months, two or five years or to the end of the cover term. Your adviser will assist you to understand the implications of these options to enable you to make the best choice for your personal circumstances.

Benefit agreed on upfront or assessed at claim

There are two options when applying for Income Cover, on when your income will be assessed. You have the choice to provide financial evidence at application time to obtain an agreed monthly benefit, which is not then financially assessed again at claims time.  Alternatively, you can choose to purchase an indemnity benefit which will be calculated based on the income you can prove you were earning just before becoming disabled.

Specific injury

If you suffer from one of the specific injuries listed below, you will be paid the monthly benefit for a specified minimum period, irrespective of whether you return to work within that time frame. If your disability lasts longer than the specified minimum period the normal monthly benefit will continue to be payable. Minimum specified periods can be found in the Income Cover Protection Benefit Sheet (Indemnity and Agreed Value).

  • Fracture of jaw

  • Fracture of skull

  • Fracture of forearm

  • Fracture of collarbone

  • Fracture of wrist

  • Fracture of upper arm

  • Fracture of shoulder

  • Fracture of elbow

  • Fracture of vertebrae

  • Fracture of kneecap

  • Fracture of ankle

  • Fracture of heel

  • Fracture of leg below the knee (tibia or fibula)

  • Fracture of the leg above the knee (femur)

  • Fracture of the pelvis

  • Loss of the thumb and index finger of the same hand

  • Loss of a foot or hand

  • Loss of sight in an eye

  • Loss of a whole leg or arm

  • Loss of any combination of hand, foot or sight

  • Paralysis (Diplegia, Hemiplegia, Paraplegia, Quadriplegia)

Clinical Illness

If you suffer from one of the critical illnesses listed below, your income insurance will be paid the monthly benefit for a minimum period of six months* irrespective of whether you return to work within that time frame. If your disability lasts longer than six months the normal monthly benefit will continue to be payable.

  • Aortic Surgery

  • Cancer

  • Chronic Kidney Failure

  • Chronic Liver Failure

  • Chronic Lung Failure

  • Coronary Artery Surgery

  • Heart Attack

  • Major Burns

  • Major Head Trauma

  • Multiple Sclerosis

  • Stroke

  • Other benefits which may also be included in your policy

  • Waiver of waiting period

  • Retraining and rehabilitation

  • Return to work reward

  • Bed confinement benefit

  • Emergency transport costs

  • Death benefit

  • Increasing benefits to match increasing income

  • Optional booster benefit

  • Optional total and permanent disability booster benefit

  • Special equipment or home modifications

  • Optional dependent relative benefit

  • Optional KiwiSaver contribution while on claim

  • Bringing you home

  • Treatment away from home

The above benefits are summary examples only of income insurance and may not be a full list of benefits which may be available to you.  The exact types of cover and benefits will change depending on the insurer and the specific policy. Please contact us for a comprehensive list of benefits available.

Income Cover

This can be a very complex product and must be set up correctly from the outset.  You need professional advice to set this type of product for you.  If you become disabled due to an accident then ACC may also pay you and this would be offsets and deductions from your insurance payment.

If you are self-employed then there are many other considerations for example, how is a loss assessed if you have staff who are still producing income and a profit, then what happens in a case of partial disability?

Professional advice MUST be sought so an accurate assessment can be made and the correct solution arranged for you because you cannot change it at claim time.

Income Replacement Insurance

This type of product is also known as Income Cover, Income Protection, Loss of Earnings, Disability Income and other variations of names, please contact us for an income protection quote and advice anytime.

Specific Condition Cover

Specific Condition Policy that provides a financial safety net should you suffer one of the covered conditions, potentially leaving you unable to earn your regular income or at least interrupting your  usual lifestyle. The lump-sum trauma cover benefit is designed to provide a cash injection to help alleviate the financial impact associated with this disruption to your lifestyle and income, so you can focus on your treatment and recovery.

Benefits paid up front

Benefits are paid as a lump sum once a covered condition has occurred, and the benefit amount is a fixed multiple of the sum insured depending on the specific condition. There is no waiting period, so as soon as you suffer the impairment or undergo the procedure and the insurer accepts the claim, you will be paid the applicable benefit.

When accidents happen

There is a likelihood that if you are unable to work that it may be the result of an accident, in which case you may be receiving regular payments from ACC. Traditional income cover reduces the benefit you are entitled to by the amount you receive from ACC, however, this is not the case with Specific Condition Cover. You will always be paid 100% of the benefit.

Less stress at claim time

With traditional income cover, you have to prove that you are unable to work before you will be paid a benefit, and you or your doctor will need to regularly provide further evidence that you are still disabled. However, as Specific Condition Cover pays a benefit based only upon you suffering a condition or undergoing a procedure, you need only provide evidence that you meet the applicable criteria once, when you submit your claim, and your benefit will be paid.

Covered specific conditions

Conditions are divided into three categories:

Category A

The most serious conditions such as paralysis, total blindness, or total and permanent disability. Category A conditions pay a lump sum of 60 × the sum insured, which closely equates to five years income. Any payments already made for the same condition under Categories B or C will be deducted from this payment. Once you are paid a benefit under a condition in this category, your Specific Condition Cover will end.

Category B

This category includes conditions and surgical procedures which can only occur once, such as a tonsillectomy or blindness in one eye. Category B conditions each pay a lump sum of between 0.5 × the sum insured for procedures such as an appendectomy or removal of an ovary or testicle, up to 24 × the sum insured for permanent partial disability. Any payments already made for the same condition under Category C will be deducted from this payment.

Category C

This category includes a range of impairments, surgeries and other medical procedures which, in most cases, are temporary and have the potential to recur. These include bone fractures, the temporary need of a wheelchair, or radiotherapy. Category C conditions each pays a lump sum of between 0.5 × the sum insured for the loss of use of one or two fingers, up to 24 × the sum insured for amputation above the knee or elbow.

Extra childcare help

If you become disabled and as a result need extra assistance with childcare for children under the age of fourteen, your Specific Condition Cover benefit provides reimbursement for these additional costs (up to certain limits).

Bringing you home

If you have been working overseas for more than three months when you suffer a disability and you wish to return home, your Specific Condition Cover includes a return to home benefit which will reimburse you for the costs of bringing yourself and a companion home to New Zealand (up to certain limits).

Increasing benefits to match increasing income

Some companies recognise that your income can change many times during the course of your career and each time your income increases, there is a financial need to increase your Specific Condition Cover to keep pace. The increasing income benefit allows your Specific Condition Cover to be increased (up to certain limits) without further health assessment, whenever your income increases.

The above benefits are summary examples only and may not be a full list of benefits which may be available to you. The exact types of cover and benefits will change depending on the insurer and the specific policy. Please contact me for a comprehensive list of benefits available.

Trauma Cover

This is a cost effective way of purchasing trauma cover by only insuring for very specific conditions.  Our recommendation is to always take this full type of trauma cover or critical care cover, but there is no use in having the cover you cannot afford so this gives the more budget conscious individuals an opportunity to have some form of this type of life insurance cover.