Being self-employed in New Zealand means embracing freedom - setting your own hours, pursuing passions, and building something uniquely yours. However, with over 300,000 self-employed Kiwis contributing to the economy, it also means facing unique vulnerabilities, like no employer-provided sick leave or holiday pay when health issues arise. Income protection insurance steps in as a tailored solution, replacing up to 75% of your earnings if illness or injury sidelines you, allowing focus on recovery rather than bills. In a post-COVID era where mental health and burnout are rife, this coverage is more relevant than ever for sole traders, contractors, and business owners across Aotearoa.
Unlike salaried roles, self-employment income can fluctuate, making protection essential to cover mortgages, family expenses, or even business overheads. ACC provides for accidents, but illnesses - causing most long-term absences - require private insurance. Policies can include perks like funding replacement staff or rehabilitation, ensuring your venture survives downtime. As of 2025, with NZ's gig economy booming, understanding how to secure this is key.
Why Self-Employed Need Income Protection in NZ
Without a safety net, a few weeks off could derail finances. Policies calculate benefits on average earnings over 12 - 36 months, using tax returns for proof. Cover up to $15,000 monthly, tax-deductible for business owners. It complements ACC CoverPlus Extra for accidents.
Essential Features for Self-Employed Policies
- Wait and Benefit Periods: 4-104 weeks wait, 2-5 years or to 65/70 benefits.
- Business Add-Ons: Cover fixed costs or temp hires.
- Global Applicability: Protection worldwide.
Steps to Secure Coverage
- Assess income and risks using IRD records.
- Choose terms balancing cost and needs.
- Compare with LifeDirect for best deals.
|
Feature |
Benefit for Self-Employed |
|
Income Replacement |
75% coverage |
|
Overhead Protection |
Business continuity |
Protect your independence with LifeDirect. Get a quote today.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.
