I got 99 problems but insurance ain’t one

Income protection insurance NZ

The worst thing about New Zealand (aside from our property market, which is FUBAR) is how unemployment works.

If you’re over 65, you get superannuation. It’s not means tested. Everyone can receive it.

If you’re employed, you pay ACC levies as part of your taxes. If you get hurt and can’t work, then ACC covers part of your wages, based on your earnings.

If you’ve been working but lose your job, unless you’re basically destitute, you won’t be able to get unemployment (or Jobseeker Support, as I believe it’s now called) if you live with a partner who is employed. Even though you’ve been working and paying taxes.

I work with a lot of Brits one of whom once voiced surprise at how common it is to have income protection insurance in New Zealand. The reason is pretty simple: it’s necessary.

I now have insurance that will cover 45% of my income for awhile if I’m not working. I have some trauma insurance, which provides a lump sum if I get seriously ill. And I also have a bit of life insurance, which probably isn’t technically needed just yet but hey, it’s a cheap addition.

For this peace of mind I will be forking out about $800 a year, which is more than car insurance but less than house insurance or contents insurance.

I got these insurances through an insurance broker, who was in turn referred to me by my mortgage broker. Insurance is definitely a grudge purchase, but I wouldn’t be without it, particularly now with a mortgage.

Am I a grown up yet?

11 thoughts on “I got 99 problems but insurance ain’t one

  • Reply Katz March 23, 2016 at 08:03

    If you’ve been working but lose your job, unless you’re basically destitute, you won’t be able to get unemployment (or Jobseeker Support, as I believe it’s now called).

    Wait, really? Why wouldn’t you qualify for unemployment? I know that there’s a stand-down period (12 weeks?) if you quit your job, but I didn’t think it would be too different to sign on if you lost your job/got made redundant/contract ended/etc.
    I’ve never been on the dole, but always liked that it’s there as a safety net if I did lose my job.

    • Reply eemusings March 23, 2016 at 08:54

      Good point, I should reword that paragraph for clarity (as all my experience with WINZ as an adult has been with a partner, which automatically rules you out – and while things on that front are a bit in flux I do technically have a partner and if things go to plan will continue to do so). I was receiving a youth benefit at one point in time and assets were a consideration back then (and I had a lot less in assets in those days).

      Even if I DID qualify, it wouldn’t even begin to cover my mortgage, so insurance it is.

  • Reply The Personal Economist March 23, 2016 at 08:44

    Ha ha I love your blog heading. Sounds like you are pretty grown up now!
    Yes agree peace of mind especially if you have a mortgage.

  • Reply Bernie March 23, 2016 at 12:10

    You can claim you income protection insurance premiums on your tax return.

  • Reply Sense March 23, 2016 at 14:15

    Oh dude. Well done.

    MOST important thing I learned from my parents’ financial disaster (dad got sick and couldn’t work) was that you MUST get income insurance or some kind of disability insurance. MUST MUST MUST. I’d think in NZ it’d be less of an issue (due to the differences in medical costs), but still–I will never ever go without it.

    I figure the only way I’d stop working is if I got sick. My disability insurance is through Superlife. 6 month waiting period (my emergency fund would cover this), pays out 55% of gross pay, and costs me (in my late 30’s) about $25/month. Good peace of mind that I am protecting myself from going down the same route as my parents.

  • Reply Sense March 23, 2016 at 14:19

    Also that partner rule is totally effed up. So what if you have a working partner when you get laid off? You’ve gone from a 2 income household to just one, and your expenses don’t decrease proportionally immediately! Also it is probably something you don’t know is coming, so how does one prepare for that, other than just living on one income in the first place?!

    WINZ, come on.

  • Reply Michelle March 24, 2016 at 03:56

    I am trying to figure out if that exists in the U.S. in this way…it’s out of my knowledge base and now I have to research it. You’d think I would know.

  • Reply Jenna L at Hello Suckers March 24, 2016 at 09:24

    Brit here and equally shocked at the income protection insurance! Surely there’s a better system for handling the risk of unemployment that they could implement?

  • Reply Jamie March 25, 2016 at 00:38

    I am planning to have a life insurance. It’s really a requirement and I am glad that I am securing one for myself and for my benefactors.

  • Reply Funny about Money March 26, 2016 at 03:23

    Wow, that’s weird about the unemployment insurance. Your bureaucrats must figure New Zealanders live within about half of their means, then! 😀 In the US, you get unemployment insurance if you get laid off, married with working spouse or not. It’s a very limited amount — you couldn’t begin to live on it if you had rent or a mortgage to pay. In fact, it’s so limited and the conditions are so onerous that when I was laid off I didn’t bother claiming it — but my house and car were paid for, and I was eligible for “early” Social Security.

    Disability insurance (as it’s called here) is crucial: covers you if you’re hurt or injured and can’t work, even if you retain the job at reduced or no pay (in some government jobs, they’re not allowed to can you just because you’re sick).

    Interesting about the car & house insurance. It’s the other way around here: my car insurance (over $800) is higher than my home insurance, and I also have to carry a $123 rider for an umbrella policy that covers liability up to $1 million.

  • Reply Amanda September 1, 2016 at 14:55

    I feel like you’re getting seeeriously ripped off if you’re paying that much insurance for just income insurance alone! (Especially contents insurance if you say it costs even more than that!)

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