Income Protection Insurance
Protect your income when illness or injury prevents you from working. Covers 75% of earnings.
Income protection insurance is the safety net many self-employed tradies overlook—until they need it. Unlike ACC (which only covers accidents), income protection covers income loss from illness or inj...
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Income Protection Insurance — NZ Guide
Income protection insurance is the safety net many self-employed tradies overlook—until they need it. Unlike ACC (which only covers accidents), income protection covers income loss from illness or injury. If you get cancer, a heart condition, a back injury that prevents work, or any serious illness, ACC won't pay a cent. Income protection fills that critical gap, replacing up to 75% of your pre-disability income while you recover. For tradies with no employer sick pay, this is essential financial protection. Premiums vary based on age, income, occupation, and waiting period, but a typical 35-year-old builder might pay NZ$60–120 per month to protect an NZ$80,000 annual income.
What's Covered
Why Income Protection Matters
ACC only covers accidental injuries—not illness. If a tradie gets a serious illness (cancer, heart disease, mental health condition), ACC provides nothing. Meanwhile, mortgage payments, rent, and living expenses continue. Income protection covers these gaps, paying you a regular benefit while you're unable to work, ensuring your family and business survive a period of lost earning capacity.
Waiting Periods Explained
Income protection policies have waiting periods (usually 2–4 weeks) before benefits commence. The longer you're willing to wait, the lower your premium. A 2-week wait means the insurer pays from day 14 of incapacity. If you have savings to cover short absences, a 4-week wait can significantly reduce premiums.
Income Coverage & Benefit Period
Most policies cover up to 75% of your pre-disability income. This is because insurers want to provide incentive to return to work. You choose a benefit period—how long payments continue. Most tradies choose a benefit period to age 65 or age 70, ensuring cover until retirement.
Who Needs This Cover?
- →All self-employed tradies
- →Sole traders with no employer safety net
- →Business owners without income reserves
- →Anyone whose family depends on their income
- →Tradies in high-risk occupations
- →Anyone aged 25–65 with income to protect
Indicative Premium Ranges
Premiums vary by trade type, business size, and claims history. These ranges are a guide only — get a personalised quote for accurate pricing.
| Business Type | Typical Premium |
|---|---|
| 25–35 years old, NZ$60,000 income | NZ$40–80/month |
| 35–45 years old, NZ$80,000 income | NZ$60–120/month |
| 45–55 years old, NZ$100,000+ income | NZ$120–250/month |
Frequently Asked Questions
Doesn't ACC cover me if I can't work?
ACC only covers accidental injuries—not illness. If you get cancer, a heart condition, diabetes, or any serious illness, ACC won't pay. Income protection covers both illness AND injury, filling the critical gap ACC leaves.
What's the waiting period and how does it affect my premium?
The waiting period (2–4 weeks) is how long after becoming incapacitated before benefits begin. A longer wait reduces your premium significantly. Choose based on your savings buffer—if you have 4 weeks of living expenses saved, a 4-week wait saves premium cost.
What percentage of my income is covered?
Most income protection policies cover up to 75% of your pre-disability income. This is intentional—it provides an incentive to return to work while still covering most essential expenses.
How long does the insurance pay if I can't work long-term?
You choose your benefit period when taking out the policy. Most tradies select "to age 65" or "to age 70," meaning benefits continue until that age if you remain incapacitated. This ensures income protection through to retirement.
What counts as "incapacity" under income protection?
You're considered incapacitated when a medical practitioner certifies you're unable to perform your usual occupation. Different policies have slightly different definitions, but the key is inability to perform your regular work duties.
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