Redundancy Insurance NZ: Three Insurers Still Sell It
You cannot buy a standalone redundancy insurance policy in New Zealand. Redundancy cover is sold only as an option attached to an income protection, mortgage repayment or term policy, and Chubb Life, AIA and nib were the three insurers still open to new customers on the wordings checked on 8 September 2026. Fidelity Life and Asteron Life have closed theirs, and every open benefit stops after six months.
In short
- Three insurers still sell redundancy cover to new customers, and each requires the base policy first: Chubb Life on Income or Mortgage Repayment Cover, AIA on Mortgage, Income or Rent Cover, and nib on Income Protection Illness cover.
- Every open wording pays for a maximum of six months, and Chubb Life is the only insurer publishing a monthly ceiling, at $4,000.
- New Zealand has no statutory redundancy pay, so without a clause in your employment agreement you receive your notice period and accrued leave (Employment New Zealand, last modified 26 November 2025).
You cannot buy a standalone redundancy policy in New Zealand. Redundancy cover exists only as an option bolted onto an income protection, mortgage repayment or term policy. On the published wordings we checked on 8 September 2026, three insurers still sell it to new customers: Chubb Life, AIA and nib. Two have closed theirs.
Every one of those benefits stops after six months. Each also carries a six-month rule at the front: AIA and nib measure it from the day the cover starts, Chubb Life from the first 180 days of your employment. That clause is why the product so rarely helps the person who goes looking for it.
There is no state fallback behind it either. New Zealand has no statutory redundancy pay. Unless your employment agreement contains a redundancy clause, your entitlement is your notice period and your accrued leave (Employment New Zealand, Redundancy, last modified 26 November 2025, retrieved 8 September 2026).
Who still sells redundancy cover in NZ
Three insurers publish an open redundancy benefit, and in each case you must buy the base policy first: Chubb Life on Assurance Extra Income or Mortgage Repayment Cover, AIA on Mortgage, Income or Rent Cover, and nib on Income Protection Illness cover. Fidelity Life and Asteron Life are closed to new applications, and Partners Life publishes no current wording we could find. Every row is taken from that insurer's own public page or policy wording, checked on 8 September 2026.
| Insurer | Open to new customers | What you must buy first | What the published wording says |
|---|---|---|---|
| Chubb Life | Yes | Assurance Extra Income Cover and/or Mortgage Repayment Cover | "Provides cover of up to $4,000 per month", "for up to six months if you're made involuntarily redundant", and "coverage for two periods of redundancy during the cover term" (Chubb Life, Redundancy Cover, retrieved 8 September 2026) |
| AIA New Zealand | Yes | Mortgage, Income or Rent Cover | "Redundancy cover is not automatically included in Mortgage, Income or Rent Cover. However, it is available as an optional add-on", with "monthly payments for up to six months" (AIA, Mortgage, Income or Rent Cover, retrieved 8 September 2026) |
| nib | Yes | Income Protection Illness cover | "Redundancy cover (only available if you also have Income Protection Illness cover)", paid monthly "for up to 6 months" after 30 consecutive days out of work (nib, Life and Living Insurance cover wording, July 2025, retrieved 8 September 2026) |
| Fidelity Life | No | Term Cover | "New applications for Redundancy/Bankruptcy Cover Benefit are no longer available." Existing holders keep up to 55% of gross income for up to six months (Fidelity Life, Term Cover brochure AL TC-2 06-25, retrieved 8 September 2026) |
| Asteron Life | No | Income Protection Cover | "This optional benefit is currently only available to customers who already have cover under it", paying monthly "for up to six months" (Asteron Life, Income Protection brochure RP327 05/25, retrieved 8 September 2026) |
| Partners Life | Not verified | Not verified | We could not find a current published redundancy wording on the Partners Life site on 8 September 2026, so we make no claim either way |
Availability changes without notice, so treat every row as a prompt to check rather than a guarantee. Two of the five open or closed positions above changed inside twelve months, which is how quickly this corner of the market moves.
What an adviser sees in practice
Most of the redundancy enquiries we take arrive after the restructure has been announced, and by then the cover cannot help. The six-month clause is checked at claim time against the date the benefit started, and several wordings go further and exclude a redundancy the applicant "ought to have known" about. In practice that means a person who applies in the week a consultation document lands has bought nothing they can use for that event. The people this benefit does reach are the ones who added it years earlier, on a policy they bought for illness cover, and forgot it was there. When a client asks me whether to add it, my first question is whether the base income protection policy is right, because that is the cover that runs for years rather than six months. Henry Smith, Financial Adviser (FSP1010699).
Redundancy cover is not income protection
The two products answer different risks, and they are often confused because they sit on the same policy.
The gap is trigger and duration. Redundancy cover answers involuntary job loss, pays monthly and stops at six months, with Chubb Life publishing the only dollar ceiling in any open wording at $4,000 a month, retrieved 8 September 2026. Income protection answers illness or injury, pays up to 75% of income, and runs for 2 years, 5 years, to age 65 or to age 70.
| Feature | Redundancy cover | Income protection |
|---|---|---|
| What triggers a claim | Involuntary redundancy | Illness or injury that stops you working |
| How it pays | Monthly, capped at $4,000 a month at Chubb Life | Monthly, up to 75% of income |
| How long it pays | Six months at most | 2 years, 5 years, to age 65 or to age 70 |
| ACC overlap | None, ACC does not pay for job loss | Fills the illness gap ACC does not cover |
| Can you buy it alone | No | Yes, from every major insurer |
If your budget only stretches to one, income protection is the longer and broader cover. Our income protection comparison sets six insurers side by side on waiting periods, benefit periods and claim definitions, and the income protection calculator sizes the monthly benefit first.
The two clocks that decide a claim
Two separate periods run, and they do not start in the same place. The first decides whether a redundancy is claimable at all. The second decides when the money arrives.
Chubb Life excludes a redundancy inside the first 180 days of employment, while AIA and nib both run six months from the cover start. The wait after the redundancy is 4 weeks at Chubb Life, 30 consecutive days at nib, and at AIA the greater of 4 weeks or up to 13 weeks of employer redundancy pay. Every cell comes from the published wordings, checked on 8 September 2026.
| Term | Chubb Life | AIA | nib |
|---|---|---|---|
| Qualifying period | Redundancy in the first 180 days of employment is excluded | Six months from the risk commencement date, plus six months as an earner | Six months from the cover start or re-start date |
| Wait after the redundancy | 4 weeks | The greater of 4 weeks, or up to 13 weeks of employer 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, permanent | 25 hours a week with a single employer |
| Fixed-term and seasonal work | Excluded by name | Any work stops the benefit | Excluded by name |
| Self-employed | Excluded by name | Becoming self-employed stops the benefit | Must be in paid employment |
Terms reproduced from the published brochures and wordings linked in the references, retrieved 8 September 2026. AIA's terms come from the AIA Living Redundancy policy wording (1113 AL-RED version 1, effective 5 August 2019) and Chubb's from its Assurance Extra Redundancy Cover brochure (current as at May 2026).
Three details in that grid are worth pulling out.
Chubb measures its qualifying period from the job, not from the policy. The exclusion is a redundancy "within the first 180 days of employment", which is a different rule from the other two and matters most if you have just changed employers. Chubb does not publish its full Assurance Extra wording online, so we cannot confirm whether a separate six-month period runs from the policy start, and we do not state one.
AIA's wait is the longest and the least predictable. It is "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 can push the first payment out by three months.
One AIA clause runs in your favour and is almost never mentioned. The benefit is reduced by other income protection or mortgage benefits paid for the same redundancy, "excluding any unemployment benefit paid by Work and Income New Zealand (WINZ) or equivalent". Jobseeker Support does not cut the AIA redundancy benefit.
Every wording also carries 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".
Who is shut out before they start
The published exclusions narrow the market a long way. 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 sit outside every open wording above. nib requires "a paid role for at least 25 hours per week with a single employer" and rules out an employer you or your family control. AIA stops payment the moment you begin any work again, including casual work, contracting or self-employment.
That is a large slice of the workforce that cannot use this product at any price. If your working life is contract-based or seasonal, the alternatives further down this page matter more than the insurance does.
What six months is actually worth
At most $24,000, and only at the insurer that publishes a monthly cap. Set that against the two other things standing behind you and the shape of the decision becomes clear.
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.
Six months out of work pays at most $24,000 from redundancy cover at Chubb Life's $4,000 monthly ceiling, $16,482.44 from Jobseeker Support for a couple without children, $9,686.30 for a single person aged 25 or over, and $0 in statutory redundancy pay. Benefit rates are the after-tax maximums at 1 April 2026 published by Work and Income.
| 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 ceiling also sits awkwardly against how long people 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 8 September 2026). For roughly one in five, six months of cover runs out before the job comes back.
What adding redundancy cover costs
There is no standalone price, because there is no standalone product. What you pay is set by the income protection or mortgage policy underneath it, the monthly benefit you choose, your occupation and your age. No New Zealand insurer publishes a figure for the option, 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, updated 24 June 2024, retrieved 8 September 2026). Adviser sites circulate estimated ranges. They are estimates, they do not come from insurers, and we do not repeat them as fact.
The only way to see the real number is to have an adviser price the base policy twice, with the option switched on and switched off, and read the difference against the exclusions above.
Is redundancy insurance worth it
It earns its loading in a narrow 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 has not been announced. Outside that case the arithmetic is usually against it.
When it is worth pricing
Your industry restructures in cycles. Media, technology, government, construction and retail all move in waves, and a benefit that covers part of the mortgage for six months is worth pricing if your savings would not.
Your mortgage is large against your savings. If six months without income would force a sale or a default, six months of cover is a real bridge, even at its modest ceiling. Read it alongside our guide to mortgage protection insurance, because the option attaches to that policy rather than sitting beside it.
You are the only earner. In a single-income household, redundancy removes all of the household income at once. There is no partner's salary to absorb part of it.
When it is not
You already hold three to six months of expenses in cash. 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, since the insurance can pay out far more than you put in, but only if you are one of the people it was built for.
Your employment agreement already provides redundancy compensation. Larger employers, the public sector and unionised workplaces often do. Check the agreement before you buy cover for the same risk.
Income protection is not in place yet. ACC covers accidents and pays nothing for illness, and illness keeps people off work far longer than six months. If the budget stretches to one product, our best income protection insurance ranking is the better place to start.
Alternatives that are not insurance
Four alternatives do most of the work this product is asked to do.
A dedicated emergency fund. Three to six months of essential living expenses in a savings or notice account. It is available the week you build it, it covers every shock rather than one narrowly defined event, and no clause can decline it.
Lower fixed obligations. Clearing consumer debt or reducing committed spending cuts the monthly shortfall a job loss creates. The less you must cover each month, the longer any savings last.
A second income stream. Rental income, a side business or freelance work in your own field builds resilience without a premium. It takes effort to set up and it does not stop when you change jobs. Our income protection comparison covers how insurers treat self-employed and contract income if you go that way.
Jobseeker Support. Work and Income pays Jobseeker Support to eligible people who lose work and are actively seeking a job. The rates above are the maximums at 1 April 2026, they reduce with other household income, and a stand-down applies where redundancy pay has been received (Work and Income, retrieved 8 September 2026).
Common mistakes
Assuming your employer must pay redundancy. New Zealand has no statutory redundancy pay. Unless it is written into your agreement, you get notice and accrued leave.
Buying cover once a restructure is in the air. That is inside the qualifying period, and several wordings also exclude a redundancy you "ought to have been aware of". Cover only works when it was arranged in a year you had no reason to think about it.
Treating mortgage cover as full redundancy protection. A mortgage-linked benefit covers the mortgage payment. It does not cover food, power, transport or the rest of the household budget.
Overlooking the tax difference. An employer redundancy payment and an insurance benefit are not taxed the same way. Ask your accountant before you plan around either.
Buying it before income protection. Illness is the larger and longer risk for most workers, and ACC does not touch it.
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 here. AIA's redundancy wording publishes no monthly dollar maximum and no cap on the number of claim periods, so we have not given it one. nib's $6,000 a month figure is an automatic-increase ceiling rather than an underwritten maximum, and its maximum cover period is set in the policy schedule rather than the wording. Partners Life publishes no current redundancy wording that we could find on 8 September 2026. And no insurer publishes a price for the option.
Frequently Asked Questions
Can you buy redundancy insurance in New Zealand?
Not on its own. Redundancy cover is sold only as an option attached to income protection, mortgage repayment or term cover. On the wordings we checked on 8 September 2026, Chubb Life, AIA and nib were open to new customers, and Fidelity Life and Asteron Life had closed theirs to new applications.
Does my employer have to pay me redundancy in NZ?
No. There is no statutory redundancy pay in New Zealand. Employment New Zealand puts it plainly: "You're only entitled to redundancy compensation if it's stated in your employment agreement" (Employment New Zealand, retrieved 8 September 2026). Without that clause you receive your notice period and your accrued leave.
How long is the stand-down on redundancy insurance?
Six months from the start of the cover on the AIA and nib wordings, and 180 days from the start of your employment at Chubb Life. A second wait then runs after the redundancy itself: four weeks at Chubb, 30 consecutive days out of work at nib, and at AIA the greater of four weeks or up to 13 weeks of employer redundancy pay.
How much does redundancy cover pay?
Chubb Life publishes a ceiling of $4,000 a month for up to six months, and covers two periods of redundancy over the cover term. AIA and nib publish a six-month maximum without a monthly dollar cap in the wording. At the Chubb ceiling, the most a single redundancy produces is $24,000 before any exclusion is applied.
Is an emergency fund better than redundancy insurance?
For most people, yes. Three to six months of essential expenses in cash has no qualifying period, no minimum hours test and no six-month ceiling, and it answers every kind of shock. Redundancy cover can still be worth pricing for a permanent employee with a large mortgage and thin savings in a sector that restructures.
References
- Chubb Life NZ, Redundancy Cover (retrieved 8 September 2026)
- Chubb Life NZ, Assurance Extra Redundancy Cover brochure CIG0015 V4 (current as at May 2026, retrieved 8 September 2026)
- AIA New Zealand, Mortgage, Income or Rent Cover (retrieved 8 September 2026)
- AIA New Zealand, AIA Living Redundancy policy wording (1113 AL-RED version 1, effective 5 August 2019, retrieved 8 September 2026)
- nib New Zealand, Life and Living Insurance cover wording (July 2025, retrieved 8 September 2026)
- Fidelity Life, Term Cover brochure AL TC-2 06-25 (retrieved 8 September 2026)
- Asteron Life, Income Protection brochure RP327 05/25 (retrieved 8 September 2026)
- Employment New Zealand, Redundancy (last modified 26 November 2025, retrieved 8 September 2026)
- Work and Income, Benefit rates at 1 April 2026 (retrieved 8 September 2026)
- Stats NZ, Unemployment rate at 5.6 percent in the June 2026 quarter (released 5 August 2026, retrieved 8 September 2026)
- MBIE, Confirmation that work has stopped on Income Insurance (retrieved 18 August 2026)
- The Treasury, Unemployment insurance: what can it offer NZ? (Kathy Spencer) (retrieved 18 August 2026)
- MoneyHub NZ, Redundancy Insurance (updated 24 June 2024, retrieved 8 September 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, public page or policy wording on the date stated, and products change without notice. No figure on this page is a quote from QuoteHub or from any insurer. Insurance is subject to underwriting, and terms, conditions, exclusions and stand-down periods apply. Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name. Henry Smith is a Financial Adviser (FSP1010699). The insurers on our advice panel are listed on our disclosure page.
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