Fidelity Life Income Protection Insurance: A review

Fidelity Life Insurance - a brief company overview

“50 years of looking after New Zealanders.”

Beginning as a family-owned business in 1973, Fidelity Life Insurance has evolved into one of New Zealand’s most responsive and agile companies, paying out $1.5B in claims over 50 years. In the last financial year (July 2022 to June 2023), the company’s total paid-out claims reached $149.2 million.

Fidelity Life knows that life doesn’t always go according to plan and that situations can change dramatically in an instant. So the company structures their core policy offerings to meet your circumstances head-on - a big relief for Kiwis in strife.

Protecting the lives of around 375,000 members is a challenging task, but Fidelity Life is well placed to continue this vital role, future forward. The backing of local shareholders, NZ Super Fund and Ngāi Tahu Holdings, means Fidelity Life remains buoyant, NZ-centric, and fully committed to supplying relevant, affordable insurance options to Kiwis like you.

Policywise works with the full suite of Fidelity Life products, including life, trauma, total and permanent disablement, mortgage protection, and group insurance. In this review, we’ll look at their income protection cover in detail.

Fidelity Life Income Protection Cover: Features and benefits

Fidelity Life's Income Protection Insurance ensures a steady income stream (up to 75% and a maximum of $30,000 per month) in the event of a policy-defined illness or injury that impedes your ability to work. In a worst-case scenario, your disability can prevent you from working permanently, compel you to change your vocation, or necessitate you resume work on a part-time basis.

Income protection insurance helps you manage your expenses, such as medical costs, rehabilitation, mortgage or rent, and debt repayments, whilst allowing your family to maintain their lifestyle.

Additionally, income protection premiums may be tax deductible, and the benefit payments you receive may be taxable.

Key features

• Flexible entry age: Income protection cover is accessible to individuals aged 16 to 59 (age 55 for those opting for the 'to age 70 benefit').
• Cover duration: Typically, your insurance remains in effect until you reach 65, unless you select the 'to age 70 benefit' and continue to pay your premium.
• Payment duration options: Depending on your occupation, you can choose to receive monthly payments for 2 years, 5 years, or to age 65 or 70.
• Waiting period options: You can choose a waiting period before you receive your first payment. This can be from 2 weeks to 2 years.

Built-in benefits 

• Total disability benefit: Pays a benefit if you remain totally disabled after your chosen waiting period.
• Partial disability benefit: Pays a benefit in arrears if you remain partially disabled and can only work part-time when your wait period ends.
• Rehabilitation and retraining: To help you return to work as swiftly as possible, additional payments for rehabilitation and re-education ensure your transition back to work or into a new occupation is as smooth as possible.
• Family member support benefit: Fidelity Life provides additional payments if you are totally disabled, confined to bed, and needing full-time help.
• Help while under nursing care: This gives extra funds to help with hospital stays or supervised bed rest during the waiting period for up to 90 days.
• Early payment with relapse: If you get sick or injured again due to the same or a related condition within 12 months of resuming work, Fidelity Life will waive the waiting period so you can get financial support sooner.
• Benefit period reset: Benefit and waiting periods are reset if you become totally or partially disabled due to the same or a related condition after a specific period of continuous full-time employment.
• Recovery support: This extra payment helps cover expenses for your recovery, such as buying a wheelchair or prosthetic device, or making changes to your home or car if needed.
• Replacement benefit: Self-employed individuals can opt to claim the cost of hiring a replacement instead of getting a total or partial disability benefit.
• Relocation benefit: If you’re totally disabled and have been living abroad for more than three months, Fidelity Life will reimburse the cost of your airfare home (subject to limits).
• Wait period waiver or reduction: Your wait period may be waived or shortened in certain situations.
• Future insurability: If your salary increases, you can raise your monthly benefit up to 10% without a medical assessment.

Optional add-ons to boost your cover

• Extra benefits package: This option provides additional payments if you pass away, become totally and permanently disabled and have been receiving monthly payouts for a year, or suffer from a policy-specified condition or injury.
• Inflation protection: You can safeguard your cover against inflation by permitting the insured amount to increase annually by at least 2% without going through a medical assessment.
• Increase your claim with inflation: This benefit adjusts your monthly payments based on the Consumer Price Index (CPI), ensuring the funds you receive keep pace with inflation.
• Booster benefits: You will receive additional benefits if you suffer continuous total or partial disability.
• Mental and back disorder limitation: This option provides benefits for up to 24 months if you suffer from a mental disorder and/or back disorder.

Please note: Terms and conditions, as well as exclusions, apply to all Fidelity Life products. It's important to review your policy carefully to understand the specific terms of cover, benefits, and any limitations. This ensures that you have a clear understanding of the protection provided by each product. If you have any questions or would like some help finding the right policy, book a callback with a Policywise adviser; it's fast and free.

Fidelity Life offers more ways to strengthen your cover

Fidelity Life offers more than just income protection insurance, so you and your family can rest assured that other requirements will be met as well. An outline of additional plans follows:

• Fidelity Life Life Insurance: Helps your family financially when you're gone or are terminally ill and have less than a year to live, providing a lump sum payment to cover costs, such as bills, debts, and living expenses.
• Fidelity Life Monthly Mortgage Repayment Cover: Helps meet your monthly mortgage payments if you become disabled or critically ill, easing the financial burden on your family so they can remain in their home.
• Fidelity Life Total and Permanent Disability Cover: In the unfortunate event of a total and permanent disability, this insurance provides a lump sum payment, offering financial support to help you adapt to a different way of life.
• Fidelity Life Survivor's Income Cover: Offers ongoing financial support to your partner or dependants if you pass away, providing regular income to cover daily expenses and maintain their quality of life.
• Fidelity Life Trauma Cover: Provides a lump sum payment upon the diagnosis of a critical illness, such as cancer, heart attack, or stroke, offering financial assistance towards medical bills, treatment costs, and lifestyle adjustments during recovery.
• Fidelity Life Trauma Multi Cover: Allows you to claim for up to five unrelated medical conditions under a single policy.  
• Fidelity Life Business Cover: Pays for the vital expenses of running your business if you or a key staff member cannot work due to a policy-defined illness, injury, disability, or death.
• Fidelity Life Group Cover: Insures your employees against the risk of illness, accidental death, permanent disability, loss of income (up to 75%), or injury with either a lump sum payment or monthly benefit.

Do you need Fidelity Life Income Protection in New Zealand?

Fidelity Life’s Income Protection Insurance is a sturdy financial safeguard if a policy-defined injury or illness inhibits your ability to work. This cover allows you to maintain your lifestyle and fulfill financial commitments when faced with challenging situations.

While New Zealand’s ACC will support you for accidental injury, it does not offer income replacement cover for illnesses, such as cancer, or sudden events, such as heart attacks.

Consider the following: 

1. Safeguard your income: The cost of living in New Zealand rose by 7.0% in the 12 months to the December 2023 quarter. Fidelity Life’s Income Protection and Mortgage Repayment Cover guarantee a regular monthly income if illness or injury prevents you from working.
2. Ensure financial obligations: Of 2.8 million employed Kiwis in the March 2022 quarter, 44,200 were away from work for a full week because of sickness, illness, or injury. Fidelity Life’s Income Protection and Monthly Mortgage Repayment Cover ensure essential expenses like rent, bills, and mortgage payments can continue to be managed.
3. Peace of mind: From June 2022 to May 2023, Kiwis sustained approximately 35,805 injuries resulting in more than a week away from work. Having a financial safety net, such as Fidelity Life’s Income Protection, Trauma, and Total and Permanent Disability Cover, eliminates worries about supporting yourself and your family, allowing you to focus on recovery.
4. Debt protection: Home loan rates in New Zealand have been volatile since Covid-19 struck in 2020, rising from lows near 2% to more than 7%. Fidelity Life’s Mortgage Repayment, Income Protection, and Trauma Cover can help pay debts, mortgages, and loans, relieving your loved ones from the burden.
5. Education support: The costs of educating your child at tertiary level in New Zealand can range from $20,000 to $40,000+. Fidelity Life’s Income Protection Cover ensures your children's education remains uninterrupted, no matter what.
6. Reliable cover: While ACC offers some financial relief for accident recovery, it does not cover all your expenses, nor illnesses, such as cancer. Knowing your loved ones are financially secure while you’re off work offers invaluable peace of mind.

How Policywise can help

Policywise is a 100% free service which tells you which health, life, and disability insurance provider best fits your needs. We offer fast, comprehensive, and easy-to-understand comparisons of all leading providers, and a simple summary clearly recommending which insurer is best for your situation.

Not all insurance policies are the same. Policywise can help you sort out the duds, avoid the lemons, understand the fine print and exclusions, and get the right insurance for you and your family.

We make the important decision of where to buy your insurance super easy. We’ll answer your questions, provide experienced advice, quotes, and comparisons, and manage all the back and forth throughout the application process. Taking out your cover through us means you'll have our lifetime support and claims advocacy, and we'll help you negotiate a positive outcome at claim time. We can also take care of lodging any claims on your behalf and back you up if the going gets tough.

Check out the reviews on our homepage for how other New Zealanders have found our service, because now is the time to get your income protection insurance sorted. Give your family or someone you love the most outstanding financial support possible. Book a 5-minute callback with Policywise today; our service is fast and free.

Disclaimer: All information on this page or website is general information only, not intended as advice, and does not take into consideration your personal circumstances. We recommend consulting a Policywise adviser before making any insurance decision.

Please note: Policywise advisers are licensed by the Financial Markets Authority to provide financial advice in relation to health insurance, life insurance, and disability insurance. You can learn more about this on our Public Disclosure page. All insurance covers are subject to the insurer’s approval of your application. 

Insurance policies and their built-in and optional benefits may be subject to stand-down periods, exclusions, terms and conditions, and premium loadings not listed on this website. Optional benefits also have additional premiums. Please refer to the insurance product’s policy document for full details. Insurers may alter these details at any time. 

Therefore, nothing in our product pages is intended to be definitive or binding. Where there are discrepancies between any policy wording on this website and the policy wording provided by the insurance company at the time your cover is approved, then the insurance company’s wording will be deemed the correct version.