The home duties TPD definition

The financial case for insuring a parent at home is straightforward and routinely ignored. That person is doing work with a market price. If they are permanently unable to do it, the household either pays for childcare, cleaning, cooking and driving, or the working partner reduces their hours to do it themselves. Either way, money leaves the household — and no income has been lost on paper, which is why the risk gets overlooked.

Because there is no occupation to test, insurers assess these claims against a home duties definition: a permanent inability to perform normal domestic duties, usually with a list attached. Typical lists include preparing meals, cleaning, doing laundry, shopping for food and caring for dependent children.

The definition is narrower than an occupational one, because domestic tasks can often be done in a modified or reduced way. Someone unable to lift a toddler may still be able to prepare meals. Where a definition requires an inability to perform the duties generally, partial capacity can defeat a claim. The wording is worth reading before you buy, not afterwards.

• A defined list of domestic duties, with a requirement that you are permanently unable to perform them.
• A waiting period, commonly three or six months of continuous inability, before assessment begins.
• A maximum sum insured that is lower than the occupational maximum, set by each insurer.
• A requirement that you were performing those duties full-time at the point of disability.
• Provisions for what happens if you return to paid work, which usually switch the definition to an occupational one.
• Sometimes an alternative activities of daily living test as a fallback.

Where a couple is insuring both lives, the practical structure is often occupational TPD on the earning partner and home duties TPD on the partner at home, sized to the cost of replacing the work rather than to an income. That number is usually larger than people expect once several years of childcare are included.

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

• The exact list of domestic duties, and whether the test is inability to perform all of them or some of them.
• The maximum sum insured available under the home duties definition.
• Whether a period out of the workforce is required before the definition applies.
• What happens if you return to part-time or full-time paid work.
• The waiting period and how continuous the inability must be.
• Whether the definition converts to an activities of daily living test at a stated age.

Every New Zealand insurer writes tpd insurance in new zealand 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.

• Home duties definitions and sum insured caps differ substantially — this is one of the least standardised parts of the market.
• An adviser can size the cover against the actual cost of replacing the work, which is a more defensible number than a percentage of a partner’s income.
• Where the person at home intends to return to work in a few years, the structure should anticipate that rather than being rewritten later.
• Combining a modest home duties TPD with trauma cover often produces better protection than a large amount of either alone.

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.