Income Protection With Redundancy Cover NZ: Who Still Sells It and What It Pays
Three New Zealand insurers will still attach redundancy cover to a new income protection policy: Chubb Life, AIA and nib. Three others have closed theirs. Fidelity Life states that "new applications for Redundancy/Bankruptcy Cover Benefit are no longer available" (Fidelity Life Term Cover brochure, AL TC-2 06-25, retrieved 19 August 2026), and Asteron Life says of its redundancy benefit that "this optional benefit is currently only available to customers who already have cover under it" (Asteron Life Income Protection brochure, RP327 05/25, retrieved 19 August 2026).
Every one of the six, open or closed, stops paying after six months.
If you want the wider market picture, including why no standalone redundancy policy exists in New Zealand, start with our guide to redundancy insurance NZ. This page is specifically about the version bolted onto income protection.
Which insurers attach redundancy cover to income protection?
Only ones that also make you buy the base policy. Redundancy cover is never sold on its own here. Chubb Life is explicit: "Redundancy Cover can only be chosen with Income Cover and/or Mortgage Repayment Cover" (Chubb Life Assurance Extra Redundancy Cover brochure, current as at May 2026, retrieved 19 August 2026). AIA says redundancy cover "is not automatically included in Mortgage, Income or Rent Cover. However, it is available as an optional add-on" (AIA New Zealand, retrieved 19 August 2026). nib's is "only available if you also have Income Protection Illness cover" (nib Life and Living Insurance cover wording, July 2025, retrieved 19 August 2026).
| Insurer | Status for new business | Attaches to | Published maximum |
|---|---|---|---|
| Chubb Life | Open | Income Cover and/or Mortgage Repayment Cover | $4,000 a month, six months, two redundancies over the cover term |
| AIA New Zealand | Open, optional add-on | AIA Living Mortgage or Income Protection Benefit | Six months; no dollar cap published in the wording |
| nib | Open | Income Protection Illness cover | Six months; $6,000 a month automatic-increase ceiling |
| Fidelity Life | Closed to new applications | Term Cover (itself closed) | 55% of gross income, six months |
| Asteron Life | Closed, existing holders only | Income Protection, Mortgage and Living, Workability | Six months |
| Partners Life | No current published wording | Legacy LifeCare and Mortgage Repayment Cover | Six monthly payments on the 2015 wording |
Sourced to each insurer's own published brochure or policy wording, retrieved 19 August 2026 and linked in the references. Chubb's dollar cap is stated as "limited to the combined sums insured of any Income Cover and Mortgage Repayment Cover you hold with us, up to a maximum of $4,000 per month". Availability changes, so confirm before you rely on any row.
Two things in that table are worth flagging. MoneyHub's redundancy page, updated 24 June 2024, states that "right now, Chubb and AIA continue to offer redundancy insurance as an optional add-on to Income Protection Insurance" (MoneyHub, retrieved 19 August 2026). That list omits nib, whose July 2025 wording publishes the most detailed redundancy terms in the market. And Partners Life publishes a live redundancy claim form but no current redundancy wording we could find, so the only clause we could read is dated 1 April 2015. We are not treating that as current.
What are the exclusions and the stand-down?
Two clocks run, and they do not start in the same place.
The first clock is the qualifying period, which decides whether a redundancy is claimable at all. nib's is measured from the cover: "you're not covered for a redundancy that occurs before or during the first six months from the Redundancy cover start date or re-start date" (nib, retrieved 19 August 2026). AIA's is the same shape, excluding a claim "if the life assured is made redundant within six months following the risk commencement date", and adding a second test, "if the life assured was not an earner for the six months immediately prior to the life assured's redundancy" (AIA Living Redundancy policy wording, 1113 AL-RED version 1 effective 5 August 2019, retrieved 19 August 2026).
Chubb's is measured from the job, not the cover. Its published exclusion is a redundancy "within the first 180 days of employment" (Chubb Life, retrieved 19 August 2026). That is a different rule, and worth reading carefully if you have just changed jobs. We could not verify a six-month-from-policy-start qualifying period at Chubb, because Chubb does not publish its full Assurance Extra wording online, so we are not stating one.
Every wording then adds the same catch-all: you cannot buy this on the way out. AIA excludes a claim "if you or the life assured knew or ought to have known at the risk commencement date that the life assured could be made redundant". Chubb excludes it "if you knew you would be made redundant or might be made redundant when this cover started". That clause, not the price, is why redundancy cover so rarely helps the person who goes looking for it.
The second clock is the waiting period after the redundancy. Chubb publishes a flat four weeks. nib pays only if the redundancy "results in at least 30 consecutive days of them being out of work", and does not pay for those 30 days. AIA's is the longest and the least predictable: "the greater of the following: four weeks; or the number of weeks (up to a maximum of 13 weeks) for which any redundancy payment(s) from the life assured's employer could reasonably provide income". A generous exit package at AIA therefore delays the benefit by up to three months.
| Term | Chubb Life | AIA | nib |
|---|---|---|---|
| Qualifying period | Redundancy in the first 180 days of employment excluded | Six months from risk commencement, plus six months as an earner | Six months from the cover start or re-start date |
| Waiting period after redundancy | 4 weeks | Greater of 4 weeks, or up to 13 weeks of redundancy pay | 30 consecutive days out of work |
| Maximum payment period | 6 months | 6 months | 6 months |
| Minimum hours | Not published | 20 hours a week average, permanent | 25 hours a week, single employer |
| Fixed-term and seasonal work | Excluded by name | Not excluded at entry; work of any kind stops the benefit | Excluded by name |
| Self-employed | Excluded by name | Becoming self-employed stops the benefit | Must be in paid employment |
All terms reproduced from the published brochures and policy wordings linked in the references, retrieved 19 August 2026. Chubb also excludes redundancy where "you or your relative controls the employer in any way", from strikes or labour disputes, and where a fixed-term contract simply expired.
One detail in AIA's wording is genuinely in your favour and almost never mentioned. The benefit is reduced by other mortgage or income protection benefits paid for the same redundancy, "excluding any unemployment benefit paid by Work and Income New Zealand (WINZ) or equivalent". Jobseeker Support does not reduce the AIA redundancy benefit.
What is six months of cover actually worth?
At most $24,000, and only at the insurer that publishes a monthly cap. Set that against the two things it is standing in for, and the shape of the decision becomes clear.
There is no statutory redundancy pay in New Zealand. Employment New Zealand is unambiguous: "You're only entitled to redundancy compensation if it's stated in your employment agreement", and "if the employment agreement does not mention redundancy pay, then there would be no compensation" (Employment New Zealand, last modified 26 November 2025, retrieved 19 August 2026).
Chart: QuoteHub calculation from the published maximums beside each bar. The insurance bar is Chubb Life's published $4,000 monthly ceiling over its published six-month maximum. Published illustration only, not a quote.
| Source over six months out of work | Amount | Basis |
|---|---|---|
| Redundancy cover at the published cap | $24,000 | $4,000 a month for six months (Chubb Life) |
| Jobseeker Support, couple without children | $16,482.44 | $633.94 a week after tax, 26 weeks (Work and Income) |
| Jobseeker Support, single, 25 or over | $9,686.30 | $372.55 a week after tax, 26 weeks (Work and Income) |
| Statutory redundancy pay | $0 | No entitlement unless it is in your employment agreement (Employment New Zealand) |
Benefit rates are the maximums at 1 April 2026 and reduce if you or your partner have income. Work and Income also applies a stand-down of one or two weeks where redundancy pay is received, so the Jobseeker figures are ceilings rather than expectations.
The honest verdict on the loading
It is a narrow product priced onto a broad one, and the case for it turns on a number nobody publishes.
No New Zealand insurer publishes a price for redundancy cover, and neither do we. MoneyHub, which does publish premiums for other products, declines on this one: "redundancy insurance add-on costs vary widely; we can't provide any sample quotes" (MoneyHub, retrieved 19 August 2026). Adviser sites circulate estimated ranges. They are estimates, they are not from insurers, and we are not repeating them as fact. The only way to see the real figure is to have the base policy priced with the option on and off, and read the difference.
What we can weigh is what the money buys. The ceiling is six months, at every insurer that sells it, and that ceiling sits awkwardly against how long New Zealanders are actually out of work. Of the 166,500 people unemployed in the June 2026 quarter, 19.0 percent had been unemployed for more than a year (Stats NZ, released 5 August 2026, retrieved 19 August 2026), with the seasonally adjusted unemployment rate at 5.6 percent, up from 5.4 percent in March. For roughly one in five, six months of cover runs out before the job comes back.
Then subtract the people the wording rules out. If you are self-employed, contracting, on a fixed-term agreement, in seasonal or relief work, or working under 20 to 25 hours a week, you are outside every open wording on this page. That is a large slice of the workforce that cannot use this product at any price.
So the cover earns its loading in a specific case: a permanent salaried employee, over the minimum hours, with a mortgage and thin savings, in a sector where restructuring is a live possibility but not yet announced. If that is you, price it. If you are already reading a consultation document, the "knew or ought to have known" clause has closed the window, and the honest answer is to stop shopping and start budgeting. Our guide to what happens to your insurance after redundancy covers what to protect once the decision is out of your hands.
For everyone else, compare the loading with the same money in an emergency fund. MoneyHub's position is blunt: "many New Zealanders find redundancy insurance costly and suggest building an emergency fund instead" (MoneyHub, retrieved 19 August 2026). A fund has no qualifying period, no minimum hours test, no 30-day stand-down and no six-month ceiling. What it does not have is leverage: the insurance pays out far more than you put in, if you are one of the people it was built for.
What we could not verify
Chubb Life does not publish its full Assurance Extra policy wording online, so its minimum hours requirement and any qualifying period measured from the policy start are unverified and are not stated on this page. AIA's wording states no monthly dollar maximum and no cap on the number of claim periods, so we have not given it one. nib's $6,000 figure is an automatic-increase ceiling, not an underwritten maximum, and its cap on separate claim periods is not published. Partners Life publishes no current redundancy wording, only a claim form and a 2015 legacy document. And no insurer publishes a price for the option, so nothing on this page should be read as one.
Getting the number for your own policy
The only way to know what redundancy cover adds to your premium is to have an adviser quote the base income protection policy twice, with the option and without it, and put the two figures next to the exclusions above. QuoteHub is operated by Craig Smith Business Services Limited, trading as Smiths Insurance and KiwiSaver, a licensed Financial Advice Provider (FSP712931). The insurers on our panel are listed on our disclosure page. We are paid commission by the insurer if you take out cover, disclosed to you before you decide.
References
- Chubb Life NZ, Assurance Extra Redundancy Cover brochure CIG0015 V4 (current as at May 2026, retrieved 19 August 2026)
- Chubb Life NZ, Redundancy Cover (retrieved 19 August 2026)
- AIA New Zealand, AIA Living Redundancy policy wording (1113 AL-RED version 1, effective 5 August 2019, retrieved 19 August 2026)
- AIA New Zealand, Mortgage, Income or Rent Cover (retrieved 19 August 2026)
- nib New Zealand, Life and Living Insurance cover wording (July 2025, retrieved 19 August 2026)
- Fidelity Life, Term Cover brochure AL TC-2 06-25 (retrieved 19 August 2026)
- Fidelity Life, Term Cover policy wording 32759WT-14 06-25 (retrieved 19 August 2026)
- Asteron Life, Income Protection brochure RP327 05/25 (retrieved 19 August 2026)
- MoneyHub NZ, Redundancy Insurance (updated 24 June 2024, retrieved 19 August 2026)
- Policywise, Best redundancy insurance (retrieved 19 August 2026)
- Employment New Zealand, Redundancy (last modified 26 November 2025, retrieved 19 August 2026)
- Work and Income, Benefit rates at 1 April 2026 (retrieved 19 August 2026)
- Work and Income, What is a stand-down (updated 29 July 2026, retrieved 19 August 2026)
- Stats NZ, Unemployment rate at 5.6 percent in the June 2026 quarter (released 5 August 2026, retrieved 19 August 2026)
Disclaimer: This article is general information only and does not constitute personalised financial advice. Every policy term on this page is reproduced from the named insurer's own published brochure or policy wording on the date stated, and products change without notice. No price on this page is a quote from QuoteHub or any insurer. Insurance is subject to underwriting, and terms, conditions, exclusions and stand-down periods apply. QuoteHub is operated by Craig Smith Business Services Limited, trading as Smiths Insurance and KiwiSaver, a licensed Financial Advice Provider (FSP712931), Christchurch.
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