We were recently asked if we’ve rated the New Zealand Dental Insurance Society Limited (NZDIS) Income Protection policy (attached below). Although we don’t currently have a QPR rating, here are some key points that we hope will help an adviser if they come across this product:
- The great feature of this product is that it’s a combination of income protection and business overheads – the two are commonly sold as separate products.
- The sum insured of up to $10,000 per week is substantially higher than the average income protection product’s benefit amount – this is possibly a reflection of earnings for practitioners in this field.
- It is comprehensive because it offers essential benefits that cover lost income from disability arising from illness/accident (total disability, partial disability, recurrent disability, loss of limbs, loss of sight, deafness) and payment can also be made if the insured dies. However, the policy does not have the ‘bells and whistles’ that other products offer (e.g. childcare assistance, home care etc.).
- The benefit payment term is a significant limitation though – this policy has maximum payment term of 52 weeks. Other income protection products have greater payment terms (e.g. 5 years, to age 65, to age 70).
- The death benefit provides payment of 100% of the specified sum insured. Other insurers only provide support benefits for death such as grief support, funeral assistance, or 3x the monthly sum insured.
- The exclusions are like those cited in other products, but with ‘war, rebellion, act of foreign enemy’ and sexually transmitted disease being the exception.
Overall, the NZDIS product is both comprehensive and generous in terms of the benefit scope. It’s unique in that it pays for personal income and business overheads in the event of disability (total, partial, permanent). It does have some limitations (such as the maximum payment term of just one year and the exclusions listed above).