|Posted on 15 September, 2020 at 23:05|
If you want to have all bases covered, you’re better to choose a combination of ACC and income protection insurance. This means you can insure more income across a wider range of circumstances – both illness and injury not just accident alone. An accident is defined as A+B=C so injury and progressive or on-going degenerative conditions are not covered by ACC.
As with most things, being forewarned is forearmed, so don’t wait until you have an accident to make sure you know exactly how much money you will receive in compensation payments.
Finally, we recommend that you make your money work for you by avoiding doubling up on ACC and income protection cover. A timely discussion with ACC to lock in the amount of cover ACC will provide regardless of continued income via CPX will give you a good base from which you can build additional insurance cover – illness and injury are just as likely to cause loss of income as an accident.
Case Study - Tim Taylor
Tim is a builder and pays ACC based on annual earnings of $100,000.
Tim pays $3,128 in ACC levies per year.
Tim is covered based on up to 80% of his earnings on injury i.e. $80,000
Tim is covered "up to" $80,000. If his earning levels change he may not actually receive this amount on the event of an injury.
ACC Coverplus Extra "CPX"
ACC CPX option allows you to choose how much income you want covered if you have an accident. ACC will pay 100% of the agreed cover divided into weekly payments until you can get back to work full-time.
Example of Dellows Income Protection Plan for Tim
Tim could "fix" his ACC cover at the minimum level of $29,453 (after tax: $25,279 pa, $486 pw)
Tims previous cover was $80,000 before tax (after tax: $62,680 pa, 1,205 pw)
Cover to be replaced is (after tax $37,388 pa, $719 pw).
Tim now pays $1,265 in ACC, and $1,332 a year in Income/Mortgage Protection Insurance.
Due to Tims high ACC levy rate and relatively low age he has saved $531.
In addition Tim is covered for more situations that could effect his ability to work. i.e. covering both injury and medical reasons.
There are a number of other "add ons" Tim may chose such as accidental injury cover at a cost of $12pm.
In some cases simply fixing ACC Cover via CPX is a great idea.
Please call James Dellow for a free review of your ACC levies, or to discuss your overall financial protection plan.