What is income protection insurance?If you face an illness or injury that stops you from working, this insurance provides regular monthly payments to cover your ongoing financial commitments like household bills and mortgage or rent payments.
Why do I need it?
Your ability to earn is your biggest asset. If an illness or injury prevents you from working, you’ll want to know your finances and family are taken care of so you can focus on recovery and getting back to work.
With income protection insurance, you’ll be supported to meet your ongoing financial commitments and make choices that are important to you. With most of our Partners Insurers, you have the choice of traditional Income Protection (either Agreed Value, Indemnity or Loss of Earnings) and Mortgage Protection Cover (MPC). The main difference between the two options is that Mortgage Protection Cover doesn’t have ACC offsets. This means in case of an accident, anything paid by ACC to compensate your income will be deducted from your Income Protection payments. However your Mortgage Protection Cover payments are in addition to your ACC payments. Depending on your situation you may choose to have a combination of our income protection options ensuring you have the right cover for your needs.
You choose the timing
Once you know which insurance option is right for you, you then choose the time you’ll wait before you start receiving payments and how long you want to receive them for.
Income Protection & Mortgage Protection Covers generally offer Waiting Periods which are The length of time between when you become disabled and when you start receiving benefit payments You can choose 2, 4, 8, 13, 26, 52 or 104 weeks.
You also choose your Benefit Period. This is the length of time for which you could receive the benefit payments and options available are 1, 2 or 5 years, or To age 65 or 70
Income ProtectionWith Income Protection you’ll need to choose the way you want your monthly payments to be calculated around your income.
Agreed Value Cover BenefitPayments are based on a proportion of your income agreed at the time you take out your cover. Suited if you want certainty about how much your monthly claim payments will be.
Indemnity CoverThis option calculates your benefit payments based on a proportion of your income at claim time, before you suffered the illness or injury.
Loss of Earnings CoverThis option allows you to choose at claim time how your benefit payments are calculated. Based on either an agreed value or indemnity, whichever is higher. This is helpful if your income fluctuates, for example as a contractor or if you’re self-employed.
Mortgage Protection Cover (MPC)With MPC, there are two ways your monthly payments can be calculated – simply choose the one that’s right for your situation. Up to 115% of your contractual mortgage repayments on your residential property
45% of your gross income Remember, MPC doesn’t have ACC offsets. This means in case of an accident you will get any ACC payments plus your MPC payments.