Income Insurance
Income Insurance (AKA: Income Protection) is a monthly benefit that pays you a replacement paycheck if you are unable to earn your regular income as a result of sickness, injury or surgical procedure. The benefit can be used to help maintain your lifestyle and pay bills during treatment and recovery.
Common Income Protection Benefits
Partial Disability Benefit
This will provide a partial payment for when your work and income are negatively impacted by an injury or illness but you are still able to perform some tasks at your job.
Childcare Help
Some policies will reimburse you for additional childcare that you may need while you are totally or partially disabled for dependent children who are under the age of 14 years old.
Special Equipment
If you need to purchase specialised equipment, prosthetic devices or make alterations to your home or vehicle as a result of a disability, this benefit would cover the costs of this.
Worldwide Cover
Most income insurance policies will cover you wherever you are in the world.
Waiver of Premium
This can remove the burden of paying premiums when you are unable to work due to total disability. Insurers will waive your premium payments, while your insurance remains in place.
Income Insurance FAQ’s
-
There are various options available with different pricing.
Most insurers offer: 2 years, 5 years, until age 65, or until age 70.
Choosing a payment period of 5 years means that you'd receive claim payments for a maximum of 5 years. If you choose a "Age 65" payment period, your payments would continue until you reach age 65 (as long as you're still unable to work during that time).
We will advise your best options based on your situation and goals.
-
Your income protection payments start after your Wait Period has past.
The Wait Period is the minimum length of time you must be unable to work for before payments begin.
You choose the waiting period. Common options are: 4, 8, 13, 26 weeks.
Longer Wait Periods make your insurance more affordable, however if you would be under financial pressure soon after your income stops (e.g. people with less cash savings) then you should select a shorter period.
-
Some insurers offer redundancy cover as an optional ‘add-on’ to their monthly disability covers (such as income insurance). See our dedicated Redundancy Insurance page.
Usually income insurance policies don’t cover redundancy and are focused on health-related issues that cause an individual to not be able to do their job.
-
ACC covers accidental injuries but does not cover illness.
In NZ, over 80% of disabilities are due to illness*. Therefore, ACC will not cover any of your costs or loss of income.
Income Protection also offers a backup to ACC for those scenarios when they refuse to cover your injury-related disability.
*Horizon Research NZ - 2012
-
There are both taxable & non-taxable income benefits available. Taxable benefits can insure up to 75% of your income, whereas non-taxable can insure up to 62.5%.
Generally if you are self-employed and already organise your own tax, it’s financially advantageous to have a taxable benefit.
-
Most policies are designed to cover up to 75% (or 62.5% non-taxable) of your income, however you can insure a lower amount if you need to keep your insurance premiums down.
Try our new Income Insurance Calculator.
-
If your income changes, it's best to revisit the amount you have insured and check if it still matches your situation.
-
Income Protection (taxable/non-taxable)
Household Expenses Cover
All of these benefits pay monthly, as such they are often classified as Monthly Disability Covers. We can advise on what type of Monthly Disability Cover will be best suited to your situation.
Elan Client Story - Income Insurance
28/05/2023
Raul and his wife had been Elan clients for many years (since 2005) when in 2015 he started to experience numbness in his hands and feet. At first this was merely an observation and did not affect him too much with his day-to-day work at his Auckland-based software company.
Fast forward another year, the numbness had gotten worse and sometimes transformed into in-explainable pain, coupled with occasional falls. Something was clearly wrong.
Raul’s doctor referred him to see a neurologist, where after many tests it was confirmed that Raul was actually suffering from peripheral neuropathy. Peripheral neuropathy is a degenerative neurological disorder which affects the nerves in one’s body and there is currently no feasible cure.
Raul’s situation quickly declined with his ability to concentrate, and therefore work, becoming increasingly difficult. Fortunately Raul had Income Protection through us, so we quickly assembled all the information & specialist reports we could, along with a completed claim form and sent it off to the insurer, in this case Partners Life.
In late 2016 we got Raul onto partial income protection claim which started paying him and his wife $6,500/month. As his situation deteriorated it became impractical for him to work even part-time. After hearing about this in one of our monthly ‘check-in chats’ with Raul, we pushed for a full income claim.
Whilst this did present a few speed bumps (due to ongoing director income), we eventually managed to get Raul onto full claim after many emails back and forth with Partners Life. The monthly benefit he now receives is $9,100/month.
Raul has been on full income protection claim for 6 years now and in that time has been paid over $655,000 which has allowed him and his wife to continue paying their bills. Raul is still only 55 years old and will most likely be on claim for a further 10 years until the payment period ends.
Raul recently stated: “Richard and Barbara have really taken an active interest in us as clients and we have come to trust them completely. And the best thing is they are real people, not just an anonymous person with a different name every time you call.”
We at Elan believe it is our duty to assist you personally through the rough times rather than just forwarding you to the insurer’s claims team. We will continue to assist Raul and his wife into the future.
-
“His advice was comprehensive & tailored to our needs. Great job.”
Maria-Montse Nieto
-
“Very trustworthy & honest. Highly recommended.”
Thomas Doorish
-
“Not only was it an easy process it was a personal process, making you feel like a part of the team.”
Joline Collis