CoverPlus Extra explained

Under standard ACC cover, a self-employed person who is injured has their weekly compensation calculated from their earnings in a defined earlier period. That works reasonably well for someone with steady, well-documented income over several years. It works badly for almost everyone else.

If you started your business eighteen months ago, if your income is seasonal, if last year was a bad year, if you reinvested heavily and drew very little, or if your income is a mixture of salary and shareholder drawings, the historical calculation can produce a figure that has very little to do with what you actually earn now. And you find that out after the accident.

CoverPlus Extra addresses that directly. Instead of calculating backwards, you and ACC agree a level of cover in advance. If you are injured and cannot work, that agreed amount is what is paid, without a fight about what your past earnings were.

1. 1

   You apply and propose a cover level

   The level has to be justifiable against your actual or expected earnings. ACC will want evidence — financial statements, tax returns, or projections for a newer business.

2. 2

   ACC agrees the level

   Once agreed, that is the amount used for weekly compensation if you have a covered injury and cannot work.

3. 3

   You pay levies on that basis

   Levies are set by reference to the agreed cover and your classification unit, which reflects the risk of your occupation. Rates are set by regulation and change — check acc.co.nz.

4. 4

   On a claim, the agreed amount applies

   No reconstruction of past earnings, no argument about which year to use, no discount because last year was quiet.

5. 5

   You review it as the business changes

   The agreed level should track your actual position. An agreement made three years ago on a much smaller business is no longer the right number.

Where it is most valuable

• Newly self-employed people whose earnings history does not yet exist or does not reflect the business.
• Seasonal and contract earners whose income arrives unevenly across the year.
• Business owners who take modest drawings and reinvest, so their taxable income understates their economic position.
• Anyone whose income has grown materially since the period ACC would otherwise look at.
• People who want certainty about what would actually arrive, rather than a calculation done later.

The right combination for most self-employed New Zealanders is both: CoverPlus Extra so that the injury half of the risk pays a known amount, and private income protection so that the illness half is covered at all. An adviser should be looking at the two together, and the offset clause in the private policy should be read with the agreed ACC level in mind.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• Whether your agreed cover level still matches what your business actually produces.
• What evidence ACC will want to support the level you propose.
• How the agreed level interacts with the offset clause in any private income protection policy.
• Whether your classification unit is correct, since it drives the levy.
• That CoverPlus Extra does not cover illness, so the larger risk remains uninsured without private cover.
• That levy rates, thresholds and maximums are set by regulation and change — check current figures at acc.co.nz.

Every New Zealand insurer writes income protection cover to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• An adviser will look at ACC and private cover as one structure rather than two unrelated decisions.
• They can size private income protection to sit properly alongside an agreed CoverPlus Extra level, allowing for offsets.
• They know which private insurers underwrite self-employed income most sensibly, which matters when earnings fluctuate.
• They will raise the illness gap explicitly, which is the point most self-employed people have never had explained to them.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.