Income protection, mortgage insurance and ACC
Life can be fickle, one day on top of the world and the next we’re laid up with an illness or injury that compromises our ability to earn, or our job itself redundant, and often not of our own making.
By Brian Coogan
Thankfully, there are mechanisms in place to help us, ACC if we have an accident and income and mortgage protection for everything else.
For injury, ACC will cover 80% of your income and even make lump sum payments for serious injury. Google ACC for a complete guide to that.
Mortgage protection, can cover up to 115% of your mortgage or rent or 45% of gross income and pays in addition to ACC for injury related claims and also covers you for illness and redundancy.
Income protection on the other hand, is offset by ACC payments for injury and will pay up to 80% of your income for illness and redundancy related claims.
ACC will cover you after the first week and continue until recovered either fully or reduce benefits for partial recovery or vocationally independent of your previous occupation. For serious injury, lump sum payments can be settled or ongoing payments to age 65.
Income protection wait periods can be nominated usually from 14 days with benefits payable also nominated up to 5 years or through to retirement with premiums rated accordingly, a popular choice known as truck and trailer is where you take one policy on a 14 day wait period payable for 2 years and another with a 24 month wait period payable to age 65 thereby giving you lifetime cover with a way cheaper premium sorting the short and long term benefit needs economically.
Your licensed insurance adviser will be equipped to provide a full analysis of your personal requirements with comparative software to cut through the benefits and variations of multiple providers to find the package just right for you.
Commentary is general in nature and not to be considered financial advice. Written by Brian Coogan, Licensed Financial Adviser and Director at Infinance – Taupo
“Fun is like life insurance, the older you get the more it costs” – Kim Hubbard