Most New Zealanders insure their car and their house — but not their income. Yet your ability to earn is almost certainly your most valuable financial asset. If you couldn't work for six months, could you maintain your mortgage repayments, your lifestyle, and your family's needs?
What Does Income Protection Insurance Cover?
Income protection (also called income continuance insurance) pays you a regular monthly benefit — typically 75% of your pre-disability income — if you're unable to work due to illness or injury. It continues paying until you return to work, or until the end of your benefit period (2 years or to age 65).
Won't ACC Cover Me?
ACC covers accidents — but not illness. Most long-term absence from work is due to illness (cancer, heart disease, mental health conditions), not accidents. Without income protection, illness leaves you with no income replacement beyond any sick leave you've accumulated.
How Much Does it Cost?
Premiums depend on your age, occupation, income, health history, and the policy features you choose. A 35-year-old in a professional role might pay $80–150/month for solid coverage. That's a small fraction of the financial exposure you're protecting against — and it's worth every cent.
Key Policy Features to Understand
The waiting period (how long before payments start — typically 4 weeks or 13 weeks), the benefit period (2 years or to age 65), and whether it's 'agreed value' or 'indemnity' are the major variables. An agreed value policy pays your insured amount regardless of your income at claim time — generally the better option for self-employed people.
Who Needs it Most?
If you have a mortgage, dependants, are self-employed, or work in a physically demanding role — income protection is not optional, it's essential. Even for those with a partner who could partially support the household, the financial strain of one income loss can be devastating.
Get a free income protection review from SKFG — we'll compare options from leading NZ insurers.