The benefits of income protection

February 29, 2024

How long could you cope without your regular income? If you’re like a lot of people, the answer is probably not very long.

But insurance can help you. 

Having income protection cover mean shaving some peace of mind that, even if you were not able to work for a while, your bills could still be covered.

Why use income protection?

Income protection cover is designed to replace up to 75 per cent of your gross pre-disability income if you become too unwell to work (due to injury or illness). After a stand-down period, which you agree on with your insurer, payments are then made for a set number of years (as specified in your policy) – or until you have recovered sufficiently to return to the workforce (not necessarily in your previous job).

This can be an invaluable help when you suffer a serious illness or injury: instead of worrying how you might pay your bills, you can focus on getting better.

You can choose between agreed value cover, where you and the insurer agree at the outset what the level of payout you would receive would be, or indemnity, where you are the claim payment will be an amount calculated based on what you were earning in a set period before you had to stop work.

But what about ACC?

ACC is a great scheme, but it only covers people who are off work due to an accident. And this means that, in the not-so-unlikely event of a serious illness, ACC will not cover you.

How does mortgage and rent cover fit in?

Some insurers now also offer mortgage and rent cover, which is designed to cover the costs of your housing. This can be tied to the actual amount you pay or linked to a percentage of your income.

This insurance is not offset by ACC payments and, depending on your needs, can be a good way to ensure that a major part of your budget is taken care of, once again in case of serious illness or injury.

Not quite sure what you may need? Get in touch. As insurance advisers, we can help you work out how the policies available could fit together to provide you with the right cover.

Like to talk?

If you could do with a bit of extra peace of mind, get in touch with us today. We can help you understand what level of income protection cover may be appropriate to ensure you can retain your standard of living, no matter what happens.



The information contained in this publication is intended for general guidance and information only. It has not been personally prepared for you. Therefore, you should not act on this information if you have not considered the appropriateness of this information to your personal objectives, financial situation and needs. You should consult with us before making any investment decision. Historical market performance may not be indicative of future market performance.