What income protection does for a medical career
Your training is the asset. Income protection is the cover that keeps paying you while you cannot use it.
It replaces a portion of your monthly income, usually up to 75%, after an agreed waiting period, for as long as the benefit period runs. Most medical clients insure to a benefit period that reaches retirement age, because the risk that matters is not a fortnight off work. It is the illness that ends procedural work at 47.
Two products get called income protection in New Zealand, and they behave differently at claim time:
- Loss of earnings cover. The benefit is taxable, and the premiums are generally tax deductible. Payments can be reduced by other income you receive while on claim.
- Mortgage and living cover. The benefit is tax free, the premiums are not deductible, and the payment is usually tied to your commitments rather than your earnings.
Which one suits you is a conversation about your tax position and your commitments, and it is worth having before you compare prices.
Everything below describes what our preferred insurance providers actually do, taken from their current policy wordings. Those are the insurers we compare for medical clients: AIA, Asteron Life, Partners Life, Fidelity Life and Chubb Life.
ACC covers the accident, not the illness
Most doctors assume ACC has the income side handled. It has one side of it.
ACC pays weekly compensation at 80% of your pre-injury earnings, but only up to a cap. From 1 July 2026 the maximum is $2,466.20 gross a week, based on maximum liable earnings of $156,641 for the year. That cap is where the plan quietly breaks for a high earner.
On an income of $500,000, the maths looks like this:
| Your position | What arrives each month |
|---|---|
| Income while working | About $41,667 gross |
| Injury, ACC only | About $10,687 gross, roughly 26% |
| Illness, ACC only | Nothing |
Cancer, a cardiac event, a back that will no longer tolerate a full theatre list, burnout severe enough to stand you down: none of that is an accident, so none of it is ACC. Illness is the larger share of long claims in this profession, and it is the share ACC was never built to carry.
So the real question is not whether you have ACC. It is what happens in the months where ACC pays you nothing.
Five things that decide whether a doctor's policy pays
Price is the easiest thing to compare and the least useful. These five wording details are where two policies with the same monthly benefit stop being the same policy, and they are the reasons we place medical clients with the insurers we do.
1. Whether your sum insured has a floor
An indemnity policy pays 75% of the income you can evidence at claim time. If your income dropped since you applied, that policy pays on the lower figure while you keep paying premiums on the higher one.
The wordings we place for medical clients all offer a way out of that. Some pay the greater of your sum insured or the income calculation, so a genuine drop in earnings cannot quietly halve your cover. Others assess your income evidence at application and lock it in, never re-examining it at claim if the application was accepted. On some wordings the floor is built in as standard, on others it is a variant we select for you.
This matters for anyone who goes part time, takes a fellowship, moves from private back into public, or has a lumpy self-employed year. Those are normal medical careers, not edge cases.
2. How ACC is deducted
Two policies both say "75% of income" and pay different amounts on the same injury.
- Deducting ACC after the 75% calculation gives a hard 75% ceiling. Every ACC dollar simply replaces an insurer dollar.
- Deducting ACC before the 75% calculation means you keep 25 cents of every ACC dollar on top, so combined replacement lands nearer 81%.
Our preferred insurance providers use the second mechanic. On a $500,000 income that is roughly $32,000 a year more, for the whole length of an injury claim, with no difference in what the brochure promised.
3. The disability trigger
This is the clause that decides whether you are on claim at all, and it is where medical work is unusual.
Some policies set an absolute bar: you must be unable to work more than about ten hours a week. A surgeon running a 50 hour week has to lose roughly 80% of capacity before that clause opens.
The wordings we place for medical clients test it proportionally instead. You qualify if your capacity falls below 75% of your own normal hours, or if you can no longer perform an important income producing duty. A proceduralist who can still consult but can no longer operate has lost a defining duty immediately, and that test recognises it on day one.
For anyone whose income depends on procedures, the trigger is worth more than the price.
4. What happens the second time
Benefit periods end. Conditions come back.
Some policies permanently exclude a condition once its benefit term is exhausted, so the illness that used your cover can never claim again. That is not how our preferred providers work: the cover resets after a clear period back at work, either built in or as an option we add, or a recurrence is treated as part of the original claim.
If you insure to age 65 with a two or five year payment term to keep the premium comfortable, that reset clause is doing most of the work you think you bought.
5. Mental health treatment
Mental health claims are a real and rising part of medical practice, and insurers price and limit them differently. Across our preferred insurance providers there is usually an optional limitation, typically capping mental health claims at two years, in exchange for a lower premium. Taking it is a legitimate trade, and it should be a decision you make deliberately rather than one you discover at claim time. There is more detail in our guide to income protection and mental health.
Cover features worth asking for
These sit inside our preferred insurance providers' wordings, some built in and some optional, and they are worth knowing about before you compare prices:
- Needlestick and occupational infection cover, an option for health sector occupations, paying out on occupationally acquired hepatitis B, hepatitis C or HIV.
- Return to work incentives, which top up the benefit while you are working reduced hours on claim rather than penalising the attempt.
- Rehabilitation and retraining support, the benefit that matters most when the answer is a changed scope of practice rather than a return to the old one.
- Care benefits that pay someone else, covering home nursing, childcare while you recover, or a family member who steps back from their own work to look after you.
- Future insurability, letting you lift cover as your income grows without new medical questions, which matters through the registrar to consultant years.
- Waiting periods matched to your leave, since a large sick leave entitlement or an employer scheme can justify a longer wait and a lower premium.
Not every provider offers every one of these, and the mix is part of what we weigh when we recommend one over another for you.
If you own the practice, two more covers apply
Income protection covers you. It does not cover the practice.
Key person cover answers a different question: if the partner who generates the list is off for a year, what pays the people who keep the doors open? The financial hit lands on the business, not on the individual's household budget, and that is a separate policy. Our guide to key person insurance covers how it is sized.
Business expenses cover reimburses the fixed running costs of a practice, rent, staff wages, equipment leases and locum cover, while an owner is unable to work. It is short term by design, usually twelve months, and it is what keeps a practice worth returning to.
Sole practitioners and partners can hold both alongside personal income protection. Salaried registrars and consultants generally need neither.
What it costs
Premiums for a doctor are driven by age, gender, smoker status, the monthly benefit, the waiting period, the benefit period, and whether you take stepped or level premiums. Occupation matters too, and medical occupations usually rate well because the claims experience is good.
The honest answer is that quoting a range here would be guesswork about your situation. Two doctors the same age can be 40% apart on price because one took a 13 week wait against the other's four.
Two things worth knowing before you look at numbers:
- Loss of earnings premiums are generally tax deductible, which changes the real cost meaningfully at a top marginal rate. Our note on tax deductible income protection explains how that works.
- A longer waiting period is usually the cheapest lever you have, if your sick leave or savings can genuinely carry the gap.
Run your own numbers below, then bring them to a conversation. The estimate is the starting point, not the recommendation.
How we compare it
We hold the current policy wordings for our preferred insurance providers and compare the clauses above line by line, rather than comparing brochures. Where a wording is silent on something, we tell you it is silent instead of assuming.
Which provider wins depends on your situation, so we do not publish a single ranking. A salaried registrar, a partner in a private practice and a locum with an uneven income are three different recommendations from the same five insurers.
As your insurance adviser we handle the application, the underwriting questions and, if it ever comes to it, the claim. There is no adviser fee to you.
Also worth reading: income protection versus ACC, our income protection guide, and the equivalent article for dentists.
