Too sick or injured to work.
If you cannot earn an income, your lifestyle will suffer and you will be forced to make changes. You will probably find it more difficult to meet your living costs when you are disabled than when you could work.
This is the stage that your income protection insurance cover comes into effect. But remember, you will only receive 75% of your pre-disability income AND you will need to pay tax on that income.
Critical Illness and Major Trauma
Many New Zealanders are disabled by the same medical conditions – heart attacks, strokes and cancer. These conditions will mean time in hospital, time away from your family – and you may wish to have your life partner with you during your stressful diagnosis and treatment times.
What impact will this have on the household income, if your partner has to also take time off work. Trauma insurance provides a cash injection to assist you with juggling your financial issues at this time, and works efficiently in conjunction with your income protection insurance, to eliminate debt, and enable your partner to take leave without pay.
This is the stage, when you can’t go back to work. Your income protection insurance benefit will continue to be paid, but if you haven’t had a payment from your trauma insurance to eliminate your debt, you could still be handling your debt/mortgage, with the lower level of income that you are receiving from your income protection policy. There is a special insurance cover – Total and Permanent Disability insurance that is available for this stage.
This is the final stage of the disablement process, and is inevitable at some time, but it is not something that anyone likes to dwell upon.Very few people die suddenly, without any warning. This is why it is important to put in place some life insurance coverwhile you are fit and healthy – to provide for your loved ones when you aren’t able to financially or emotionally support them any longe