Insurance for IT professionals

There is no physical underwriting story in IT. The work is sedentary, indoors and low-hazard, and insurers rate it at the top of the table. That means the cheapest income protection available, the longest benefit periods, own-occupation definitions and the shortest waiting periods. Whatever problems an IT professional has with insurance, occupation class is not one of them.

The real questions are about how you are paid. A permanent employee with a salary and sick leave has a straightforward application. A contractor through a limited company, drawing a modest shareholder salary plus dividends and leaving profit in the company, does not. Insurers generally look through the structure to total earnings, but they need evidence to do it, and how the income is presented affects how much cover is offered.

The claim pattern in professional office work is also not what people expect. It is not accidents. Long-duration income protection claims in this sort of work are dominated by mental health conditions and by ordinary serious illness — cancer, cardiac events, neurological conditions. ACC covers none of that.

Occupational overuse syndrome sits in an unusual position. It is a recognised work-related gradual process condition in New Zealand, which means an ACC claim is possible, but acceptance depends on establishing the work connection and is decided case by case. It is not a reliable substitute for income protection.

This is where most IT applications go wrong, and it is entirely fixable at application if it is done deliberately.

• Insurers usually assess self-employed income as salary plus your share of company profit, less business expenses. A low shareholder salary on its own understates what you actually earn.
• Two or three years of financial statements and tax returns is the usual evidence. A first year of contracting is harder and may require a different approach.
• Between contracts, the definition of “totally disabled” can shift — some policies deal with periods of unemployment differently, and it is worth reading that clause.
• Agreed value cover, where available, fixes the benefit at application and avoids the argument at claim time. Availability differs between insurers.
• Retained earnings, dividends and shareholder loans all need to be explained rather than left for an underwriter to interpret.

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

• How the policy defines income if you contract through a company.
• Whether cover is agreed value or indemnity, and what evidence is on file.
• The waiting period against your real cash position, particularly if you contract.
• The mental health benefit limit, which is the most likely long-duration claim in this work.
• What happens to cover if you take a contract overseas or work remotely from another country.
• Whether an employer scheme already provides income protection, and how the two interact.

Every New Zealand insurer writes income protection for IT professionals 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.

• Presenting company and contractor income properly to an underwriter routinely increases the benefit offered.
• Agreed value income protection is not available everywhere, and for contractors with lumpy income it is worth pursuing.
• Mental health benefit limits differ between insurers, and for office-based professionals they are the limit most likely to be tested.
• Remote and overseas work raises residency questions that are handled differently by different insurers.

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.