Income Protection Insurance in New Zealand
Income protection insurance NZ can replace up to 75% of income if illness or injury stops you working. It is one of the most important covers for households and self-employed Kiwis.
You get a licensed adviser’s written read on how much of your income would actually keep arriving if you could not work, and what it would take to close the gap. Free, and no obligation.
Written by Henry Smith, Financial Adviser (FSP1010699). Reviewed by Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). Updated 8 September 2026. How we compare · How we are paid
ACC’s maximum weekly compensation is $2,466.20 gross a week from 1 July 2026, and ACC only responds to accidents, not illness. ACC, Changes to ACC client payments from 1 July 2026, Retrieved 8 September 2026.
An adviser's view
Almost everyone I speak to believes ACC has them covered. ACC is good, but it only responds to accidents. If it is cancer, a heart condition, or a back that gives out over years rather than in a moment, ACC pays nothing, and that is the more common way people stop working. That gap is what income protection exists for.
What the review covers
- How much of your salary would be replaced if you couldn't work due to illness or injury
- Whether you're covered for short-term, long-term, or both scenarios
- The difference between ACC cover and income protection and where the gaps are
- Whether your current waiting period and benefit period actually suit your financial situation
What people usually miss
Assumed ACC covers everything
ACC only covers accidents. If you get sick, diagnosed with a serious illness, or have a mental health condition that stops you working, ACC won't help. Income protection fills that gap.
Didn't realise how small statutory sick leave is
Most employees get 10 days of sick leave a year. After that, you're on your own. If you're off work for months, those savings disappear fast.
Never thought about extended illness
It's easy to plan for a broken leg. It's harder to plan for cancer treatment, burnout, or a back injury that keeps you off work for 6-12 months. That's exactly what income protection is for.
More about income protection in NZ
Income protection insurance in New Zealand fills the gap ACC does not cover for illness. It usually pays a monthly benefit after your waiting period, helping you keep up with mortgage repayments, bills, and living costs while you recover.
Policy design matters
Waiting period, benefit period, indemnity vs agreed value, and optional extras all affect claims outcomes and premiums. A cheaper policy with poor definitions can leave major gaps. Compare policy wording and claim support, not just price.
If you are self-employed, income insurance is often critical because revenue can stop immediately when you cannot work. A practical review helps set realistic benefit levels and waiting periods around your emergency savings and fixed expenses.
What the cover actually replaces
Income protection pays a monthly benefit while illness or injury keeps you from working, starting once the waiting period you chose has passed. It is designed to meet the running cost of a household rather than a medical bill: the mortgage, the rates, the power, the groceries, the childcare. It continues for the benefit period written into your policy.
Where ACC stops and cover starts
ACC responds to personal injury caused by an accident. It does not respond to illness, so cancer, heart disease, stroke, most degenerative back conditions and mental health conditions sit outside it altogether. For any household that depends on someone continuing to earn, that boundary is the gap income protection exists to close.
How the settings change a claim
Three choices decide what a claim is worth. The waiting period sets how long you fund yourself first, the benefit period sets how long payments can run, and the benefit basis decides how the amount is proved. Agreed value fixes the sum when you apply; indemnity tests your earnings at claim time, which matters if your income has since dropped.
What drives the price
Occupation is usually the biggest single factor, because the insurer is pricing how easily you could keep earning while unwell, followed by your age, health, smoking status and the policy settings above. QuoteHub does not publish rates, because income protection is individually underwritten and a figure that has not been underwritten is not a price you could rely on.
The honest limits
Income protection is not redundancy cover and will not pay because work dried up. Benefits are capped as a share of what you were earning, offsets can reduce a payment where ACC or another policy is already contributing, and incomplete disclosure at application is the most common reason a claim later goes wrong. Answer the medical questions thoroughly and keep a copy.
QuoteHub compared with the alternatives
The premium an insurer charges is the same whether you buy direct, through a broker, through a comparison site, or through QuoteHub, because adviser commission is built into the insurer’s standard price rather than added to it. What changes is how much of the market you see, whether anyone writes down why one policy was recommended over another, and who lodges the claim when it matters. QuoteHub compares 8 New Zealand insurers named in full on our disclosure page, gives you a written recommendation, and stays with you at claim time. Going direct gives you one insurer and its own claims team. A broker usually does what we do, though panel sizes differ, so ask for the list. A comparison website is usually a quote list rather than advice, and some are owned by an insurer or by a business that resells enquiries.
Frequently asked questions
Doesn't ACC already cover me?
Only for accidents. If you can't work because of illness, a medical condition, or mental health ACC doesn't apply. Income protection covers the gap ACC misses.
I'm self-employed. Does this apply to me?
Especially. If you don't work, you don't earn. Income protection for self-employed Kiwis is one of the most important covers you can have and one of the most overlooked.
How much of my income would be covered?
Typically up to 75% of your pre-disability income. The exact amount depends on your policy, your insurer, and your situation. That's what the review is for.
What's the difference between income protection and mortgage protection?
Mortgage protection usually only covers your mortgage payments. Income protection replaces a portion of your actual income so you can cover everything: mortgage, bills, groceries, the lot.
Is there a waiting period before it kicks in?
Yes, and it's one of the most important choices you'll make. Shorter waiting periods cost more but kick in faster. An adviser can help you find the right balance for your savings and situation.
Related guides
- Life insurance in New Zealand
- Trauma insurance and critical illness cover
- ACC vs insurance in NZ
- Income protection insurers ranked by claims paid
- When income protection premiums are tax deductible
- Whether redundancy cover can actually be bought here
- Income protection compared with trauma cover
- How we compare insurers, and our sources
- How we are paid
- What you get from the review
The insurers behind income protection in New Zealand
Financial strength is the one comparable, published fact about an insurer: an independent agency's view of its ability to pay claims. Every grade below is the insurer's own published disclosure for the named New Zealand licensed entity, linked and dated. A rating belongs to that entity, not to a brand or a product name.
| Insurer | Licensed entity | Financial strength | Rating as at | How you can buy |
|---|---|---|---|---|
| AIA New Zealand | AIA New Zealand Limited | AA (Fitch, source, retrieved 14 Aug 2026) | Date not published | Adviser or direct |
| Asteron Life | Asteron Life Limited | A+ (Fitch, source, retrieved 14 Aug 2026) | Date not published | Through an adviser |
| Chubb Life NZ | Chubb Life Insurance New Zealand Limited | A (Excellent) (A.M. Best, source, retrieved 14 Aug 2026) | Date not published | Adviser or direct |
| Fidelity Life | Fidelity Life Assurance Company Limited | A- (A.M. Best, source, retrieved 14 Aug 2026) | Date not published | Through an adviser |
| Partners Life | Partners Life Limited | A (Excellent) (A.M. Best, source, retrieved 14 Aug 2026) | 5 Feb 2026 | Through an adviser |
Ratings are not a recommendation, and they say nothing about what a policy covers or what it costs. They were read from each insurer's own disclosure on 14 Aug 2026 and can change. Every licensed New Zealand life and health insurer, with its rating · How we compare
What income protection actually includes, insurer by insurer
The waiting period, the benefit period and the definition of disability decide whether income protection pays you, and none of them appears in a price. Each value below was read from the insurer document linked beside it.
| Feature | What it decides | Chubb Life Assurance Extra Income Cover | Fidelity Life Income protection cover | Asteron Life Income Protection Cover |
|---|---|---|---|---|
| Entry age | The ages at which a new application is accepted. | 16 to 55, and to 60 for occupation classes 1 and 2 [1] | 16 to 59, and 55 for a 'to age 70' benefit [2] | Not published |
| Most income that can be insured | The ceiling on the monthly benefit, whatever you earn. | Up to 75% of income, to a $30,000 monthly maximum; more is considered individually and limited to a two-year payment term [1] | Up to 75% of usual income, to a $30,000 monthly maximum [2] | 75% of actual loss of income under Loss of Earnings [3] |
| Waiting periods offered | How long you fund yourself before the benefit starts. | 4, 8, 13, 26, 52 or 104 weeks [1] | 2, 4, 8, 13, 26, 52 or 104 weeks [2] | Chosen by the applicant; the brochure says most people choose between 30 and 90 days, and does not publish the option list [3] |
| Benefit periods offered | How long the benefit can keep paying. | 2 years, 5 years, to age 65 or to age 70 [1] | 2 years, 5 years, to age 65 or to age 70 [2] | 2-year and 5-year benefit periods are referenced; the full option list is not published [3] |
| When the cover ends | The age the contract stops, whatever your working plans are. | Age 65 for the 2-year, 5-year and to-age-65 terms; age 70 for the to-age-70 term, which is available only to occupation classes 1 and 2 [1] | Age 65, unless the benefit is 'to age 70' [2] | Not published |
| Indemnity or agreed value | Whether the benefit is fixed at the start or proved at claim time. | Four types: Agreed Value, Indemnity, Loss of Earnings and Loss of Earnings Ultra [1] | Not published | Two types: Loss of Earnings, and Loss of Earnings Plus, where a maximum benefit is agreed up front [3] |
| Evidence of income at claim | Whether you have to prove earnings when you are already unwell. | Not required under Agreed Value, because the monthly sum insured is agreed at commencement; required under the other three types [1] | The amount is subject to financial and medical checks [2] | Loss of Earnings pays on 75% of the actual loss of income at the time of claim [3] |
| Offsets | The other income, ACC especially, that reduces what the policy pays. | Offsets are other income streams that reduce the monthly benefit, and how they apply varies with the cover type chosen [1] | Not published | Under Loss of Earnings Plus the benefit is the greater of the monthly benefit less income received such as ACC support, or 75% of actual loss of income [3] |
| Own-occupation definition | Whether disability is judged against your job or any job at all. | For occupation classes 1 to 4, being unable to perform a duty producing at least 20% of pre-disability income from the pre-disability occupation, or to work more than 10 hours a week in it; occupation class 5 is assessed on activities of daily living and domestic duties instead [1] | You can keep working up to 10 hours a week without affecting the payment [2] | Not published |
| Share of income that can be insured | The proportion allowed at application, which falls as income rises. | Under Agreed Value, 62.5% on an annual income of $70,000 or less, 60% from $70,001 to $100,000, 55% from $100,001 to $320,000, and 35% above $320,000 [1] | Up to 75% of usual income [2] | 75% of income [3] |
| Indexation | Whether the benefit keeps pace with inflation. | Not published | The amount insured can be set to increase each year against inflation [2] | Income update: increase the cover by up to 10% each year with no further medical underwriting [3] |
| Return-to-work and recurrence | What happens if you go back to work and then relapse. | Not published | Rehabilitation support to help return to work sooner [2] | Recurrent disability continues the benefit and waives the waiting period where the same disability recurs within 12 months of returning to work; a disability reset applies on 2-year and 5-year benefit periods [3] |
- [1] Chubb Life New Zealand, Assurance Extra Income Cover brochure, cig0007 v5, read 8 Sep 2026.
- [2] Fidelity Life, Income protection cover, read 8 Sep 2026.
- [3] Asteron Life, Income Protection Cover brochure, read 8 Sep 2026.
How we compared
We compared 3 insurers. Every value in the table above was transcribed from one of these documents on the date shown beside it: Chubb Life's Assurance Extra Income Cover document, Fidelity Life's Income protection cover document, Asteron Life's Income Protection Cover document. Nothing was taken from an adviser summary, a comparison site or a previous version of this page.
Rows were chosen for the features that decide what a claim pays and that an insurer publishes: entry ages, benefit limits, definitions, waiting and stand-down periods, and the rights you keep after a claim. A cell reads "Not published" where we could not find the fact stated in the documents listed under the table on the date they were read. It is a statement about those documents, not a claim that the insurer has no such benefit.
Price is not compared here, and not because it does not matter. Premiums depend on your age, your health, your occupation and the underwriting decision, so a published figure would be someone else's price rather than yours. Everything on this page is true before anyone is underwritten. How QuoteHub compares insurers.
What income protection claims are actually made for
Two New Zealand insurers publish an income protection claims split by cause, and they disagree in a way that matters: accident and injury leads both, but cancer and mental health rank very differently. Every figure below is the insurer's own published number for the period named beside it.
| Condition | Share of claims | Insurer and product | Period |
|---|---|---|---|
| Accident and injury | 42% [1] | Partners Life, Income Cover | 1 Apr 2024 – 31 Mar 2025 |
| Cancer | 15% [1] | Partners Life, Income Cover | 1 Apr 2024 – 31 Mar 2025 |
| Heart | 11% [1] | Partners Life, Income Cover | 1 Apr 2024 – 31 Mar 2025 |
| Mental health disorders | 10% [1] | Partners Life, Income Cover | 1 Apr 2024 – 31 Mar 2025 |
| Musculoskeletal | 7% [1] | Partners Life, Income Cover | 1 Apr 2024 – 31 Mar 2025 |
| Accidental injury | 52% [2] | Asteron Life, Income Protection | FY25 |
| Chronic illnesses | 13% [2] | Asteron Life, Income Protection | FY25 |
| Mental health conditions | 11% [2] | Asteron Life, Income Protection | FY25 |
| Injury to bones, muscles, limbs and joints | 15% of all new claims accepted, across every product [3] | Fidelity Life, all products | 1 Jul 2024 – 30 Jun 2025 |
| Respiratory | 7% of all claims paid, across every product [3] | Fidelity Life, all products | 1 Jul 2024 – 30 Jun 2025 |
- [1] Partners Life, This is Partners Life 2025, key claims stats, 1 April 2024 – 31 March 2025, read 8 Sep 2026.
- [2] Asteron Life, Claims, FY25 acceptance rates and claims paid, FY25, read 8 Sep 2026.
- [3] Fidelity Life, Claims we've paid, 1 July 2024 – 30 June 2025, read 8 Sep 2026.
- [4] Chubb Life New Zealand, Our 2024 claims stats, 2024 (published July 2025), read 8 Sep 2026.
These are shares of claims, not odds of claiming, and they describe the people each insurer already covers rather than the population. The three insurers here count differently, Partners Life and Asteron Life publish a split per product, Fidelity Life publishes one across all products, so read down a single insurer rather than across them. Two insurers on the panel are absent for one reason: AIA New Zealand publishes its per-product split as a graphic and Chubb Life publishes its 2024 condition breakdown in a video, and a figure read off an image is not one this page will stand behind. [4] How QuoteHub compares insurers.
Income protection: the words on the page, in plain English
Insurance vocabulary is not decoration; each of these words changes what a policy pays. This is what they mean on a New Zealand income protection contract.
| Term | What it means |
|---|---|
| Waiting period | How long you must be disabled before the benefit starts. You fund yourself through it, so it should match your savings. |
| Benefit period | How long the benefit keeps paying once it starts. Two years, five years, or to age 65 or 70. |
| Indemnity value | The benefit is proved against your income at claim time, so falling earnings before a claim reduce what you get. |
| Agreed value | The benefit is fixed when the policy is issued, so no income evidence is needed at claim time. |
| Loss of earnings | The benefit is calculated on the actual drop in income at the time of claim, rather than on a set monthly amount. |
| Offsets | Other income, ACC weekly compensation above all, that the insurer deducts from the monthly benefit. |
| Pre-disability income | Your earnings before the claim, and the base every calculation works from. How it is defined is worth reading. |
| Total disability | The test that opens a claim, usually built on being unable to perform the duties of your own occupation. |
| Partial disability | Working reduced hours or reduced duties, with a proportion of the benefit paid to bridge the gap. |
| Occupation class | The insurer's risk banding for your job. It sets the terms available to you, not only the price. |
| Recurrent disability | A relapse of the same condition within a set window, which restarts the benefit without a new waiting period. |
| Indexation | An annual increase to the monthly benefit so it keeps pace with inflation, usually offered each policy anniversary. |
Income protection: questions people actually ask
Short answers, written to be read on their own. Where an answer relies on a published figure, the document it came from is linked beside it.
Does ACC already cover me?
Only for injury. ACC covers accidental injury and pays weekly compensation for it, and it does not cover illness. Cancer, a heart attack, a back condition that was not caused by an accident and most mental health conditions are outside it entirely.
How long should my waiting period be?
As long as you can genuinely fund yourself, and no longer. Match it to sick leave plus savings: four weeks if you have a month of expenses set aside, thirteen weeks if you have a quarter. A longer waiting period lowers the premium.
How long should the benefit period be?
A two-year benefit period covers most claims but not the ones that end a career. To age 65 costs more and is the only version that protects a working life. If the budget is tight, a longer waiting period beats a shorter benefit period.
What is the difference between indemnity and agreed value?
Indemnity proves your income at claim time, so a bad year before a claim reduces what you get. Agreed value fixes the benefit when the policy is issued, so no income evidence is needed at claim. Agreed value suits variable incomes and costs more.
What are offsets?
Other income the insurer deducts from the monthly benefit, ACC weekly compensation above all, and sometimes other insurance or sick pay. Offsets are why holding both ACC cover and income protection does not double what you receive.
Can I still work part-time on a claim?
Usually yes, within limits. The policies compared above allow work up to about ten hours a week in your own occupation without ending a total disability claim, and a partial disability benefit covers reduced hours beyond that.
What does own occupation mean?
That disability is judged against the job you actually do, not against any job you could conceivably take. It is the more useful definition, and on some policies it applies only to certain occupation classes.
What is an occupation class?
The insurer's risk banding for your work. It sets which cover types, waiting periods and benefit periods are available to you, not only the price, and manual occupations have materially fewer options.
How much of my income can I insure?
Around 75% at the top, and less as income rises. Chubb Life publishes the taper explicitly, from 62.5% of an income of $70,000 or less down to 35% above $320,000, which is designed to keep a claim worth less than working.
Does it cover mental health claims?
Yes, and they are a material share. Partners Life reports mental health disorders as 10% of its income cover claims and Asteron Life reports mental health conditions as 11% of its income protection claims. Some insurers apply a shorter benefit period to them.
What is mortgage repayment cover, and is it the same thing?
It is a narrower version: a monthly benefit sized to the mortgage rather than to your income, usually with a shorter benefit period. It is cheaper and it protects the house rather than the household.
Am I covered if I am self-employed?
Yes, but the income evidence matters more. Self-employed income is proved from business records, and an agreed value or loss-of-earnings-plus structure exists precisely because self-employed income moves around.
Are income protection premiums tax deductible?
Where the benefit would be taxable as income, the premium is generally deductible for an individual. The treatment differs for business-owned and mortgage-repayment cover, so this is one to check with an accountant rather than assume.
Exclusions and things to note
The parts of an income protection contract that decide a declined claim are rarely in the brochure headline. Each of the following is quoted from the policy document or product page linked beside it, and each one is a real limit on a real policy sold in New Zealand today. Your own schedule may carry personal exclusions on top of these.
- Cover above a $30,000 monthly maximum is considered case by case and limited to a two-year payment term. [1]
- Offsets reduce the monthly benefit, and how they apply changes with the cover type you chose, this is where ACC weekly compensation lands. [1]
- For occupation class 5, total disability is assessed on activities of daily living and domestic duties rather than on your occupation at all. [1]
- Under Loss of Earnings, your monthly income while claiming must be 75% or less of your pre-disability income. [1]
- The share of income you can insure falls as income rises: 62.5% at $70,000 or less under Agreed Value, and 35% above $320,000. [1]
- The benefit amount is subject to financial as well as medical checks, so a benefit set years ago can be reduced at claim time. [2]
- You fund your own costs through the waiting period before any benefit is paid. [2]
- Cover ends at 65 unless the benefit was written to age 70. [2]
- [1] Chubb Life New Zealand, Assurance Extra Income Cover brochure, cig0007 v5, read 8 Sep 2026.
- [2] Fidelity Life, Income protection cover, read 8 Sep 2026.
News that affects this cover
- The State Pays Three Times More Toward A Funeral If The Death Was An Accident, ACC, 9 September 2026. Which funeral grant a family can get is decided by how the person died, not by what the family needs.
- Four Of The Five Insurers You Can Buy From Directly Now Sell The Same Thing, And Call It The Same Name, Insurers, 9 September 2026. If you are buying cover directly rather than through an adviser, you are increasingly choosing between five versions of one product shape rather than assembling cover from parts.
- Australia bans genetic test results in life underwriting next month. New Zealand does not., Regulation, 8 September 2026. If you are considering a predictive genetic test in New Zealand, the result can be asked for and used by a life or health insurer assessing a future application.
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Explore related pages: Quotes Income Protection, ACC, Life Insurance, Health Insurance, Compare Insurance NZ.