Income Protection Waiting Period NZ: How to Choose
An income protection waiting period is the continuous time you are unable to work before monthly payments begin, and the benefit period is the longest those payments run. Fidelity Life publishes waiting periods from 2 to 104 weeks and benefit periods of 2 years, 5 years, to 65 or to 70. Choose the waiting period by working out how many weeks you can cover yourself.
In short
- Fidelity Life offers waiting periods of 2, 4, 8, 13, 26, 52 or 104 weeks and benefit periods of 2 years, 5 years, to age 65 or to age 70, and says you "need to cover your own costs" during the wait (Fidelity Life: Income protection).
- A longer wait lowers the premium; AIA's wording says, in its waiting period reduction benefit, that premiums increase with any reduction in waiting period. No source we could name gives a percentage, so we give none.
- Eligible employees get 10 days of paid sick leave a year, and unused days carry over to a maximum of 20 (Employment New Zealand). ACC covers injuries, not illness, and an employer pays the first week of a covered injury.
- Income protection is fully underwritten. It is not a guaranteed acceptance product.
A waiting period (also called a stand-down or deferral period) is the time between the start of a disability and the first benefit payment. Under AIA's agreed value wording, the insurer pays the monthly benefit less offsets from the end of the waiting period until the person is no longer totally disabled, the benefit term ends, or the cover ends (AIA Living Income Protection Benefit, Agreed Value appendix, version 3, effective 23 July 2021). The benefit period is the maximum time payments can continue for a claim. The two settings do different jobs: the waiting period decides how much of the first stretch you fund yourself, and the benefit period decides how long the cover protects you if you do not recover. A short calculation works better than a rule of thumb for picking the first one.
What insurers publish
| Setting | Fidelity Life (published) | Notes |
|---|---|---|
| Waiting periods | 2, 4, 8, 13, 26, 52 or 104 weeks | AIA's wording also refers to 26, 52 and 104 week waiting periods. Other insurers' menus differ; ask |
| Benefit periods | 2 years, 5 years, to age 65 or to age 70 | All cover ends at 65 unless the to-age-70 option is taken |
| Entry age | 16 to 59 (55 for the to-age-70 benefit) | Entry age depends on the benefit period |
| Benefit size | Up to 75% of usual income, to a maximum of $30,000 a month | Subject to financial and medical checks |
| Premium type | Age-rated (fixed for a year at a time) or level term | See why premiums increase |
Source: Fidelity Life: Income protection, retrieved 20 October 2026. We found no source stating which waiting period is the most popular, so we do not name one. The common examples of 4, 8 and 13 weeks are among the options insurers sell, not a rule.
Step 1: Count the weeks you can fund yourself
The method has four steps. It gives a number of weeks, and you then choose the longest standard waiting period at or below it.
- Weekly shortfall. Write down your essential weekly spending. Subtract income that keeps arriving if you stop work, such as a partner's pay. The result is what you must find each week. If you are on full sick pay, there is no shortfall for those weeks.
- Sick leave weeks. Take your sick leave balance in days and divide by the days you work each week. Eligible employees are entitled to 10 days a year, which accumulate to 20, and employers may agree to more (Employment New Zealand). For a five-day week, 20 days is 4 weeks. Sick leave is also used for a partner or dependant, so do not count on all of it.
- Savings weeks. Divide savings you are willing to spend by the weekly shortfall.
- Bridge. Add steps 2 and 3. That is your bridge in weeks. Pick the longest waiting period that does not exceed it.
Two limits to the arithmetic. First, the waiting period is continuous: the AIA wording requires the person to have been disabled during the waiting period and still totally disabled at its end. Second, AIA's base cover option offsets sick leave payments against the benefit, up to a maximum of 10 days' sick leave payments for all claims resulting from the same or a related disability; its Premier option does not (AIA wording). Check how your own policy treats sick leave.
Two worked examples (round numbers, not real people)
| Employee | Self-employed | |
|---|---|---|
| Essential weekly spending | $1,500 | $1,500 |
| Income still arriving | $0 | $0 |
| Sick leave | 15 days, 3 weeks on full pay | None |
| Savings to spend | $6,000, or 4 weeks | $9,000, or 6 weeks |
| Bridge | 3 + 4 = 7 weeks | 0 + 6 = 6 weeks |
| Longest standard option at or below the bridge | 4 weeks; 8 would leave a 1-week gap | 4 weeks; 8 would leave a 2-week gap |
| To pick a longer wait | Find $1,500 more, or keep sick leave back | Find $3,000 more |
Both households land on 4 weeks unless they can raise a little more, which is why the arithmetic helps: it shows the price of the longer wait in dollars you would have to find. The saving from a longer wait is real but we cannot quantify it from a published source, so ask for quotes at two waiting periods and compare.
Step 2: Remember what ACC does and does not cover
ACC covers injuries within the scheme. Employment New Zealand says that for an ACC-covered injury, the employer has payment responsibilities for the first week and ACC pays from the second week. If an injury happened at work, the employer must pay 80% of usual earnings for that first week. If it did not, you can use sick leave or other paid leave if you have any, and otherwise you are not paid for that week (Employment New Zealand). Employment New Zealand describes ACC payments as 80% of earnings, which an employer and employee can agree to top up to 100% by using 1 day of sick leave for every 5 days on ACC. Two consequences:
- For an accident, the waiting period overlaps with the first week and then ACC. It is not paid "from day one", and the first week depends on where the injury happened.
- For illness, there is no ACC. Consumer NZ notes that the public health system will help you if you get sick (Consumer NZ), but the wage replacement gap is yours. Our guide to ACC versus private insurance sets out the split.
Insurers offset ACC entitlements against the benefit. AIA's wording reduces the monthly benefit by other income replacement "in respect of the same or a related disability (for example payments from ACC, or another insurer)", and if you are entitled to ACC but not receiving it because you have not applied, AIA offsets the full entitlement anyway (AIA wording). Where the waiting period is 8 weeks or less and the injury is expected to recover within a set time, AIA may pay a lump sum of up to 3 monthly payments and close the claim. That detail is from the AIA appendix only; other insurers differ.
Step 3: Choose the benefit period
The benefit period decides what you are protected against. With Fidelity Life you can insure up to 75% of usual income. With round numbers, for someone aged 40 earning $80,000 a year (before tax), a benefit of 75% is $60,000 a year:
| Benefit period | Most the policy could pay over a full claim |
|---|---|
| 2 years | $120,000 |
| 5 years | $300,000 |
| To age 65 (25 years from 40) | $1,500,000 |
This is the ceiling, not an expected claim. It excludes indexation and offsets, and it assumes you remain unable to work for the whole period. The two short periods end long before retirement if the illness lasts. A long period costs more, and we do not publish a percentage for how much, but the comparison to run is: what would the household live on in year three of a long illness? If the answer is "savings that would not last", the longer benefit period is the setting that matters, and the waiting period is the lever to manage the premium. If you are within a few years of 65, a short period may be enough, and some insurers restrict the to-age-70 option by entry age (Fidelity's is 55). The rest of the choice, such as agreed value versus indemnity, is covered in our guide to agreed value versus indemnity. The AIA appendix is an agreed value policy, where the benefit amount is the figure shown in the schedule.
Employer cover, changing jobs and tax
Employer group cover may pay for a shorter period than a personal policy, and may end when you leave; check its terms. Our guides on changing jobs and insurance and group versus individual cover cover this. For tax, whether a premium is claimable turns on whether the payout would be taxable, and an income protection payout is generally taxable: see income protection tax in New Zealand. The costs of cover are in our income protection cost analysis, and tradespeople should read income protection for tradies.
Why this is not a guaranteed acceptance product
Income protection is underwritten: Fidelity Life says its benefit is "subject to financial and medical checks", and the amount depends on your income. There is no guaranteed acceptance income protection among the products on this site. Momentum Life's two products are Funeral Insurance (aged 40 to 75, benefit $3,000 to $30,000) and Quick Life (aged 18 to 65, $50,000 to $300,000 of life cover). Neither replaces income. Quick Life excludes pre-existing conditions and suicide for the first 2 years, and Funeral Insurance pays only for accidental death in its first 24 months, with all premiums refunded for any other death in that window; total premiums can end up larger than the benefit. Momentum Life Limited holds an A.M. Best financial strength rating of B (Fair), a range its own scale calls "Vulnerable" (Momentum Life: Financial strength). See the Quick Life plan page, the funeral insurance hub and the guaranteed acceptance hub for where they fit. For income protection, a licensed adviser is the route.
Common mistakes
- Counting all your sick leave. It also covers a sick child or partner.
- Picking the longest wait to cut the premium without the savings behind it. The arithmetic above shows the gap in dollars.
- Shortening the benefit period to save money. That removes protection against the long claim.
- Assuming ACC pays from day one. The first week sits with the employer for an ACC-covered injury.
- Never reviewing. As savings, debt and jobs change, the right numbers change. See when to review your insurance.
Frequently asked questions
What waiting periods can I choose?
Fidelity Life publishes 2, 4, 8, 13, 26, 52 and 104 weeks. Other insurers' menus differ, so check with the insurer or adviser.
Does a longer waiting period lower the premium?
Yes in direction; AIA's wording says premiums increase with any reduction in waiting period. We cannot give a percentage from a published source.
Can I change the periods later?
Possibly, but the rules differ by insurer and policy, so ask yours. AIA's wording, for one, lets a 26, 52 or 104 week waiting period be shortened without new medical evidence only in the specific cases it lists.
Does ACC replace income protection?
No. ACC covers injuries within the scheme only. For illness there is no ACC wage replacement.
How many sick leave days do employees get?
Eligible employees are entitled to 10 days of paid sick leave a year, accumulating to 20 days, and may be given more.
QuoteHub is a Momentum Life partner. Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). See how we are paid. This page is general information, not personal advice. To compare income protection, start a free review or read our income protection overview.
References
- Fidelity Life: Income protection, retrieved 20 October 2026
- AIA New Zealand: AIA Living Income Protection Benefit, Agreed Value appendix, version 3, effective 23 July 2021, retrieved 20 October 2026
- Employment New Zealand: Sick leave entitlements, retrieved 20 October 2026
- Consumer NZ: Health insurance buying guide, updated May 2025, retrieved 20 October 2026
- Momentum Life: Financial strength, retrieved 20 October 2026
- Momentum Life: Funeral Insurance Policy Wording, 17 August 2023, retrieved 17 October 2026
- Momentum Life: Quick Life Insurance Policy Wording, November 2025, retrieved 17 October 2026
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