It’s not uncommon for people to confuse these two types of insurance and think that they offer similar cover. They don’t!


Provides regular monthly payments to replace your income if you’re unable to work due to illness or injury.

Won’t ACC do that?

ACC does a similar thing, but for accident only. Income protection covers both accident and illness, including mental health. Since even builders are more likely to be off work through illness than accidental injury, income protection is often a better option than just relying on ACC.

Self-employed people can also dial down their ACC cover and put the saving towards income protection insurance, getting broader cover, often for a similar total cost. There are both pros and cons to this arrangement, which is why we advocate discussing your situation with an independent financial adviser who can make a recommendation that best suits your needs.


Covers the cost of treatment for a health or medical issue.

Won’t our public health system do that?

Yes it does. Health insurance can help you get faster access to treatment through the private system and can reduce the cost of private treatment for certain conditions too.

Health insurance will not pay to replace your income during any period that you’re off work recovering from an accident, illness, surgery or medical procedure, or if you’re unable to work while undergoing treatment.


Well, as you now know both types of insurance provide different cover, so you may want to have them both.

If you just took income protection then you would need to rely on the public health system for treatment if you got sick, but you would receive regular payments to replace your income until you could return to work.

If you just took health insurance and got sick then you may receive treatment sooner, but would need to rely on disability income support from WINZ (currently just over $60 a week) if you were unable to work and had no other sources of income.

You could also opt for a combination. For example, taking income protection for yourself but putting health insurance in place for the kids.

Ultimately, speaking to an experienced adviser before you make this decision is the right way to go.

Illness, Income Protection & ACC Dial Down