Own occupation vs any occupation TPD

A TPD claim is not decided by how ill or injured you are. It is decided by whether your condition satisfies the occupation definition written into your policy. Two definitions dominate the New Zealand market, and the distance between them is the distance between a paid claim and a declined one.

Under an own occupation definition, the test is whether illness or injury has permanently prevented you from working in the occupation you were in when you became disabled. The insurer looks at your job — its physical and cognitive demands, the duties you actually performed — and asks whether you can still do it.

Under an any occupation definition, the test widens dramatically. You must be permanently unable to work in any occupation for which you are reasonably suited by your education, training or experience. The insurer is entitled to consider not only what you have done, but what you could reasonably do — including different work in the same industry, or work you could be retrained into.

The pattern is clear. Any occupation cover works well for conditions that impair you globally — severe cognitive impairment, profound physical disability. It works badly for conditions that take away one specific capability on which a specialised career was built. The more specialised your work, the more you lose by being on an any occupation definition.

Who is offered own occupation

Insurers do not offer own occupation cover to everyone, because the claims cost is much higher. It is generally reserved for lower-risk occupation classes — professionals, office-based roles, some skilled non-manual occupations — and is typically not available for heavy manual work, high-risk trades or occupations with irregular income patterns. Availability and the exact class boundaries differ between insurers, which is one reason the same person can be offered different definitions by different companies.

Home duties

Where someone is not in paid employment — most often a parent at home with children — the occupation tests do not work, so insurers use a home duties definition instead. It asks whether you are permanently unable to perform a stated list of normal domestic duties, such as cooking, cleaning, shopping and caring for children. Maximum sums insured are usually lower, and the definition is narrower than either occupational test, because domestic tasks can often be done in some reduced form. Read the list itself, not the summary.

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

• Which definition you are actually being offered — it is often stated in the schedule rather than the quote.
• Whether the definition changes at a stated age, commonly to activities of daily living at 60 or 65.
• How your occupation has been classified, since the class governs which definitions are available.
• Whether the definition is tested against the occupation you held at disability, or at application.
• Whether the policy contemplates part-time or reduced-hours work, and how that affects the totality test.
• Whether a partial or permanent impairment benefit exists for claims that fall short of the full definition.

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.

• Occupation classification is not uniform across insurers. The same job title can attract different classes, and therefore different definitions, from different companies.
• Where own occupation is not available, an adviser can sometimes achieve a better outcome by combining any occupation TPD with a longer income protection benefit period.
• Some insurers apply a more generous any occupation test than others, particularly around retraining expectations — this is visible only in the wording.
• An adviser can also confirm whether the occupation recorded on your policy still matches what you do, since a change of job can change how a claim is assessed.

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.