Insurance FAQ

Why would I need Income Protection Insurance when ACC covers me if I can’t work?

ACC only covers accidents and not illnesses. This can be confusing as ACC regularly promote how they pay up to 80% of your income – but only for accidents. Illnesses account for over 90% of the time people take extended periods off work.

I have health insurance and also have a trauma policy that pays a lump sum if I get cancer, or have a stroke or heart attack. Why do I need both?

They are for completely different reasons. The health policy will allow you to avoid hospital waiting lists but doesn’t pay the bills during recovery. The Trauma policy pays a lump sum to reduce debt, replace your lost income and take away all financial pressure, during the long recovery time.

I have life insurance cover of $250,000. A friend told me that he had $750,000 in cover. Why on earth would anyone need that much cover?

If you die, you may want to clear all debt for your surviving family including the mortgage, leave two years income so your spouse can survive and put aside an amount for the kid’s future education. This can add up to close to $1 million for many. And the cost of $750,000 cover is NOT 3 x the cost of $250,000 cover. It is a usually only a small additional premium.