Income Protection
Replace your income if illness or injury stops you from working.
What Is Income Protection?
Income protection insurance answers one of the most important financial questions in personal risk management: what happens to my family's finances if I can't work for 6 months? Or 2 years? Unlike ACC, which only covers accidents, income protection covers both illness and injury — including cancer, mental health, heart conditions, and back problems, which are the most common reasons working-age New Zealanders stop working.
Most policies pay 75% of your pre-disability income, with a waiting period (typically 4, 8, or 13 weeks) before payments begin. The waiting period you choose affects your premium — a longer wait means lower premiums but greater need for savings to bridge the gap. Benefit periods can range from 2 years to age 65, and the longer the term, the more valuable the cover.
For self-employed business owners, contractors, and sole traders — anyone without an employer's sick leave safety net — income protection is arguably the most critical insurance they can hold. If your income stops, everything else follows: mortgage, rent, car payments, children's costs. A good income protection policy keeps those running regardless of your health.
What's Covered
Up to 75% of pre-disability income replaced
Monthly benefit paid directly to you
Covers both illness and injury (unlike ACC)
Waiting period options: 4, 8, or 13 weeks
Benefit period up to age 65
Own-occupation or any-occupation definitions
Partial disability benefit for reduced work capacity
Inflation-linked benefit increases available
Who Needs Income Protection?
Self-employed workers and sole traders with no sick leave
Anyone whose income would stop within weeks if they couldn't work
Business owners whose company relies on their direct involvement
Professionals with large mortgages and lifestyle commitments
Employees with inadequate sick leave or savings buffer
Worked Examples
These are illustrations of how this type of cover is designed to work. They are not accounts of real people, and they are not records of any insurer’s claim decision. What is actually payable depends on the plan you hold, its benefit maximums and any waiting periods or exclusions that apply to you.
Self-employed plumber with back injury
A Palmerston North plumber ruptured a disc and was unable to work for 7 months. ACC covered his accident-related medical costs but not his full lost income.
His income protection policy topped up to 75% of his pre-injury income from week 5. He received $4,800/month for 6 months — covering his mortgage, vehicle finance, and living costs entirely.
Cancer treatment for a Wellington lawyer
A 46-year-old lawyer was diagnosed with lymphoma and underwent 8 months of chemotherapy. She could not work during treatment.
Her income protection policy paid $6,200/month throughout her treatment. She returned to work after full recovery with no financial damage to her practice or lifestyle.
NZ Providers Offering This Cover
Which of these can actually be quoted for you depends on the agencies your broker holds. Some New Zealand insurers deal direct only. We do not rate or score insurers.
Partners Life
Income Cover protects your ability to earn if illness or injury stops you working
AIA
Income protection offered within its wider product range
nib
Ask which income protection options are currently offered
UniMed
Primarily a health insurer; ask what is available alongside its health plans
Southern Cross
Best known for health cover; ask what income products are available
What Affects the Cost?
Premiums for Income Protection vary between individuals. These are the key factors that determine your rate:
Occupation class — high-risk occupations pay more
Waiting period — longer waits mean lower premiums
Benefit period — 2-year cover vs. to-age-65 cover
Income level — higher income replaced costs more
Definition of disability — own-occupation vs. any-occupation
Frequently Asked Questions
What does Income Protection actually cover?
Income protection insurance pays a monthly benefit — typically 75% of your salary — if you are unable to work due to illness or injury. It is essential for self-employed Kiwis and anyone without adequate sick leave.
How much does Income Protection cost per month?
We cannot give you a price for this cover, because no New Zealand health insurer publishes a full premium schedule. What we can tell you is what moves the number: your age, your medical history, the excess you choose, the level of cover, and who else is on the policy. An adviser can quote your actual situation at no charge.
Are pre-existing conditions covered?
Pre-existing conditions are typically excluded from cover, or may be subject to a premium loading. The definitions vary by insurer, and some conditions may be covered after a stand-down period. An adviser will help you understand each provider's approach before you commit.
How do I claim?
Claims processes differ by insurer. Most offer online or app-based claiming, and for surgical or hospital treatment the provider will often bill the insurer directly where the treatment has been approved in advance. For everyday cover you generally submit receipts and are reimbursed. Ask your insurer what their current process and turnaround are.
General information, not financial advice
Information on this page is general in nature and does not take into account your personal circumstances, goals or financial situation. BestHealthInsurance.co.nz is not a Financial Advice Provider. We do not compare policies for you, we do not recommend an insurer, and we do not give financial advice.
When you request a quote, we pass your details to one of the specialist brokers or underwriters we work with. Where that is a broker, they are an independent, licensed New Zealand Financial Advice Provider: they compare the insurers they hold an agency with, give you any advice, and are responsible for that advice. Where an insurer takes the enquiry directly, you are dealing with that insurer’s own team about their own products. Either way, ask them for their disclosure information — what they can advise on, the providers behind it, how they are paid and how to complain — before you act on anything they tell you.
Ready to Compare Income Protection?
Tell us what you need and we will pass your details to one of the specialist brokers or underwriters we work with, each vetted before we refer them anything. They quote you across the insurers they can place. No obligation, no cost to you.
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External resources: PHARMAC (funded medicines) · Health New Zealand (Te Whatu Ora) · FMA — Insurance guidance
BestHealthInsurance.co.nz is an independent referral service. We connect you with licensed insurance advisers regulated under the Financial Markets Conduct Act 2013. We do not provide financial advice. See full disclaimer.