As your financial commitments grow, thoughts can turn to how you and your family would manage if health problems interrupted your income for an extended period. Different types of life insurance provide financial support for different types of sickness and injury. They can also provide peace-of-mind knowing you have a financial plan in place in case that happened to you.
Long-term sickness
Most New Zealanders who work for an employer get the legal minimum sick leave of 10 days. ACC might provide some income if you’ve had an accident, but not for an illness. Long-term sickness or injury can quickly use up any savings you might have.
Income protection cover pays a percentage of your usual income in monthly instalments. When you take out this cover you choose the monthly amount, how long you want to wait before receiving payment and the maximum length of time they could continue for.
Monthly mortgage repayment cover is similar to income protection, but based on your mortgage repayments or rent.
Serious sickness
A serious condition - like cancer, stroke or Parkinson’s - can completely change your priorities. The impact on your health can be challenging enough, without the added stress of not being able to meet financial commitments. There may also be new expenses associated with managing your condition.
Trauma cover pays an agreed lump sum if you suffer from a serious condition that is defined in your policy.
Total and permanent disability
If sickness or injury leads to a permanent disability, Work and Income may provide a supported living payment, provided you meet a specific eligibility criteria. If you don’t qualify, or it’s not enough to cover your family’s usual expenses, you could face ongoing financial challenges.
Total and permanent disability (TPD) cover pays an agreed lump sum if you become totally and permanently disabled and are unable to work ever again.
Fatal sickness
If a sickness leads to your death, how will the people you leave behind manage financially? The mortgage, dependents’ futures and shared long-term plans may rely on your continuing income.
Life cover pays an agreed lump sum if you die, or are diagnosed with a terminal illness and have less than 12 months to live.
The best time to get insurance is now, before you are unwell. Talk to us now about how we can help.
