Income Protection Insurance NZ: Secure Your Paycheque in 2025
What does income protection cover?
This policy pays up to 75% of your gross salary if illness or injury prevents you working beyond a chosen waiting period (4, 8 or 13 weeks). Benefits can last two years, five years, or to age 65.
Premium snapshot (April 2025)
- $70k salary, age 30, 13-week wait, two-year benefit: ≈ $1.20/day
- $90k salary, age 45, smoker, 8-week wait, to-age-65 benefit: ≈ $5.40/day
Are premiums tax‑deductible?
Yes—Inland Revenue confirms you can deduct premiums when the benefit would be taxable income. Keep your policy schedule and annual statements for evidence.
Four ways to slash your premium
- Choose a 13-week waiting period—often 35% cheaper than four weeks.
- Limit the benefit term to two or five years if other assets can cover long-term needs.
- Select level premiums while young to lock in lower lifetime costs.
- Bundle with life or trauma cover to unlock multi-policy discounts.
Provider comparison
- AIA Living — from $1.18/day; optional Boost for inflation indexing.
- Partners Life — $1.25/day; offers agreed-value upgrades.
- Fidelity Life — $1.30/day; six-month premium holiday for parental leave.
FAQ
- Do ACC benefits make income protection unnecessary?
ACC covers accidents only. Illnesses cause more than 80% of long-term work absences, so income protection remains vital. - What waiting period should I choose?
Align it with your emergency fund. If you have three months’ expenses saved, a 13-week wait often offers the best value. - Can self-employed Kiwis claim premiums?
Yes—premiums are deductible as a business expense when benefits are taxable.
📌 About the Author
Kiwi Money Matters is written and maintained by a New Zealand-based writer with hands-on experience in finance and accounting since 2015.
All posts are personally researched, written to ensure clarity and trustworthiness for everyday Kiwis.
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