Income Cover provides a financial safety net should you be disabled as a result of sickness or injury, and unable to earn your regular income. The monthly benefit is designed to replace a significant portion of lost income to help maintain your usual lifestyle during treatment and recovery.
Facts about Income Protection
- $50,000 annual income over 30 years is valued as a $1.5 million asset today.
- 5 out of every 10 males and 7 out of every 10 females, aged 25 years are likely to become disabled due to an illness or accident before they turn 65.*
* Source: Davies Finances & Actuarial Ltd
How does Income Protection Insurance impact on ACC or other ongoing income?
You may receive, or be entitled to receive other income while you are disabled and unable to work e.g. ACC, mortgage repayment insurance, sickness benefit, and ongoing business income.
An insurer may subtract other income you are still receiving, or are entitled to receive (excluding investment income, and any benefits from another source in connection with the same disability), from the amount they pay under the insurance policy.
They do this to ensure the income you are receiving during the period of your disability, including your monthly benefit, remains relative to your pre-disability income for Indemnity Value Cover, or to the amount that was agreed at the time of application for Agreed Value Cover.
However getting correct advice in this area is very important as there are ways to structure your cover and your ACC entitlements to ensure that you well protected and receive your maximum benefits at claims time.