{"id":3004,"date":"2021-08-16T22:36:08","date_gmt":"2021-08-16T10:36:08","guid":{"rendered":"https:\/\/wisdom8.co.nz\/personal-insurance\/income-protection-cover\/"},"modified":"2021-08-24T00:22:13","modified_gmt":"2021-08-23T12:22:13","slug":"income-or-mortgage-protection","status":"publish","type":"page","link":"https:\/\/wisdom8.co.nz\/en\/personal-insurance\/income-or-mortgage-protection\/","title":{"rendered":"Income or Mortgage Protection"},"content":{"rendered":"

[et_pb_section fb_built=”1″ _builder_version=”4.9.10″ background_image=”https:\/\/wisdom8.co.nz\/wp-content\/uploads\/2021\/08\/204483613-w2.jpg” parallax=”on” parallax_method=”off”][et_pb_row column_structure=”2_3,1_3″ _builder_version=”3.25″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”2_3″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text admin_label=”Header” _builder_version=”4.9.10″ header_font=”|700|||||||” header_text_align=”left” header_4_text_align=”left” background_size=”initial” background_position=”top_left” background_repeat=”repeat” module_alignment=”center”]<\/p>\n

Income or Mortgage Protection<\/h1>\n

Provides a replacement income whilst you\u2019re off work due to disability.<\/h5>\n

[\/et_pb_text][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][\/et_pb_column][\/et_pb_row][et_pb_row column_structure=”1_5,3_5,1_5″ _builder_version=”4.9.10″ _module_preset=”default”][et_pb_column type=”1_5″ _builder_version=”4.9.10″ _module_preset=”default”][et_pb_sidebar area=”et_pb_widget_area_8″ admin_label=”Personal Insurance menu” _builder_version=”4.9.10″ _module_preset=”default” border_color_all=”RGBA(0,0,0,0)” global_module=”3102″][\/et_pb_sidebar][\/et_pb_column][et_pb_column type=”3_5″ _builder_version=”4.9.10″ _module_preset=”default”][et_pb_text admin_label=”text” module_id=”life-cover” _builder_version=”4.9.10″ background_color=”rgba(255,255,255,0.7)” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_padding=”40px|50px|50px|50px|false|true”]<\/p>\n

If you develop an illness or disability that results in you not being able to work for an extended time then you should take steps to ensure that you can still pay your mortgage, bills and household expenses. <\/strong><\/h4>\n

Any such event can have a devastating effect on your finances – one from which you may never recover; especially, as so often happens, if your illness leads on to a more serious disability.<\/p>\n

\n

Income or Mortgage Protection plans tend to be the most expensive of all the cover types; due mainly to the high possibility of a claim, but also because of the potential amounts which could be paid
\n\u2013 a forty year old insuring himself for $60,000 per year for example, could receive over $1.5 million if an illness lasted to age 65.<\/h4>\n

<\/strong><\/p><\/blockquote>\n

<\/p>\n

But Doesn\u2019t ACC Cover Me?<\/strong><\/h4>\n

Although ACC provides a fairly good basic cover, it does have its limitations. The most important of these is that ACC will only pay claims relating to accident or injury – not illness – and given that only about 20% of all long term claims (i.e. more than 3 months) are accident related, having ACC still leaves the most significant part of the financial risk with you.[\/et_pb_text][et_pb_text admin_label=”text” module_id=”life-cover” _builder_version=”4.9.10″ header_4_line_height=”1.1em” background_color=”rgba(255,255,255,0.7)” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_padding=”40px|50px|50px|50px|false|true”]<\/p>\n

Types of Plans<\/strong><\/h3>\n

In general there are three different products which can be used:<\/p>\n

<\/p>\n

    \n
  • \n

    Mortgage Protection<\/strong><\/h4>\n

    This has a maximum benefit equivalent to your monthly mortgage. Premiums are not tax deductible, but benefits are not taxed at claim time, and they are not subject to a reduction if you also receive benefits from ACC.<\/p>\n<\/li>\n

    <\/p>\n

  • \n

    Indemnity Income Protection<\/strong><\/h4>\n

    Insures up to a maximum of 75% of your gross earnings. At the time of claim it is necessary to financially prove to the insurer, that your pre-disability earnings (usually over the previous 3 years) have been sufficient to justify paying out the benefit level insured. The current understanding of the tax position is that the premiums are tax deductible and the benefit is tax assessable. The benefit will be reduced by any ACC benefit received.<\/p>\n<\/li>\n

    <\/p>\n

  • \n

    Agreed Value Income Protection<\/strong><\/h4>\n

    Insures from 55% up to a maximum of 75% of your gross earnings. The benefit level has been pre-agreed by the insurer, meaning at the time of claim it is not necessary to financially prove that your pre-disability earnings have been sufficient to justify paying out the benefit level insured. The benefit level is agreed regardless. The current understanding of the tax position is that the premiums are not tax deductible and the benefit is not tax assessable. The benefit will be reduced by any ACC benefit received.
    The Amount of Cover<\/strong>
    Your monthly benefit can be up to a maximum of 75% of your taxable income, although many people elect for a sum which covers the essentials such as mortgage, bills & food.<\/p>\n<\/li>\n

    <\/p>\n

  • \n

    The Waiting Period From Start Of Illness To First Payment<\/strong><\/h4>\n

    This can be 4, 8, 13, 26, 52, or 104 weeks. The lower the wait period, the sooner the benefit is paid out and the higher the premium paid. Making a decision on the wait period will depend on how long you can go without pay and will also depend on affordability. An emergency fund saved will enable a longer wait period to be chosen, saving money on premiums.<\/p>\n<\/li>\n

    <\/p>\n

  • \n

    The Time That You’d Like To Receive Benefits For<\/strong><\/h4>\n

    You usually have a choice of 2 years, 5 years, or all the way to age 65 or 70. Many people select age 65 as this coincides with the normal retirement age, but the shorter options are useful if your budget’s tight.<\/p>\n<\/li>\n

    \n<\/ul>\n

    \nThe plan details will vary from insurance company, please refer to the policy wording of the cover.[\/et_pb_text][et_pb_text admin_label=”Stepped Premiums and Level Premiums” module_id=”life-cover” _builder_version=”4.9.10″ background_color=”rgba(255,255,255,0.7)” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_padding=”40px|50px|40px|50px|false|false” saved_tabs=”all” global_module=”3225″]<\/p>\n

    What are Stepped Premiums and Level Premiums?<\/strong><\/h4>\n\n\n\n\n
    \"\"<\/td>\nStepped Premiums<\/strong>
    \nIncrease annually as you get older, but usually start cheaper.
    \nTo cover short or medium term needs.<\/td>\n<\/tr>\n
    \"\"<\/td>\nLevel Premiums<\/strong>
    \nDon’t increase as you get older but usually start higher.
    \nTo cover long term needs.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    The plan details will vary from insurance company, please refer to the policy wording of the cover.<\/p>\n

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    Income or Mortgage Protection Provides a replacement income whilst you\u2019re off work due to disability. Life Cover Trauma or Critical Illness Cover Total & Permanent Disability Cover Income or Mortgage Protection Medical Insurance If you develop an illness or disability that results in you not being able to work for an extended time then you […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":1637,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":""},"yoast_head":"\nIncome or Mortgage Protection - \u667a\u6167\u4fdd\u9669 Wisdom8 | Wisdom Management LTD<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wisdom8.co.nz\/en\/personal-insurance\/income-or-mortgage-protection\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Income or Mortgage Protection - \u667a\u6167\u4fdd\u9669 Wisdom8 | Wisdom Management LTD\" \/>\n<meta property=\"og:description\" content=\"Income or Mortgage Protection Provides a replacement income whilst you\u2019re off work due to disability. 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