When it comes to personal insurance, understanding what cover you need can feel daunting. We’re here to help you work through your options, but we also recognise that many people prefer to first build a general understanding of what types of cover are available.
To help with this, we’ve compiled a glossary of some of the main types of personal insurance policies. The definitions are intentionally high level and designed to give you a general overview only. Your actual cover will always depend on the insurer, the policy you choose, and the specific terms and conditions set out in your policy document.
If you would like to explore what cover may be right for you, click here to book a free chat with a member of our team.
| Policy types | |
| Life Insurance | Life Insurance pays a lump sum if you pass away or are diagnosed with a terminal illness. It can help protect your family or dependants by covering things like living costs, debt repayment, or future financial needs if you are no longer around to provide for them. |
| Health and Medical Cover | Health and medical cover (also called private health insurance), helps pay for the cost of private medical treatment. Depending on your policy and the cover selected, it can help fund everything from doctors’ visits and prescriptions, through to specialist consultations, major diagnostic tests, surgery, access to Pharmac and non-Pharmac (but MedSafe approved) drugs, and hospital care. It can allow you to access treatment sooner and earlier than relying solely on the public health system and may give you more choice over providers and treatment options. |
| Trauma Insurance | Trauma Insurance pays a one-off lump sum if you are diagnosed with a serious medical condition covered by the policy (such as cancer, heart attack, or stroke) or some severe injuries. The payment can be used however you choose, for example to support recovery, cover medical costs, reduce work hours, or pay down debt. |
| Total Permanent Disability Cover | Total Permanent Disability cover provides a lump sum if you become permanently disabled and unable to work or carry on your normal tasks if you are not working, due to illness or injury. It is intended to help cover long-term financial needs such as medical expenses, mortgage or rent payments, home modifications, employing a caregiver, and other bills that may arise. |
| Specific Injury Cover | Specified or Specific Injury Cover pays a fixed lump sum if you suffer certain defined injuries, such as fractures, burns, or permanent loss of sight or hearing. The amount paid depends on the type and severity of the injury and is designed to help with immediate expenses during recovery. |
| Income Protection Cover | Income Protection cover provides regular payments if you are unable to work due to illness or injury. The payments replace a portion of your income and continue until you return to work or reach the end of the agreed benefit period. This cover is designed to help you maintain your day-to-day living expenses while you recover. There are different types of income protection insurance including: Agreed Value, Indemnity Cover and Loss of Earnings. Each of these options differ in the way your cover amount is calculated at application and at the time of claim. You can insure up to 75% of your pre-tax income. |
| Mortgage Protection | Mortgage Protection is an agreed value based on your rent, mortgage or a portion of your income, at the time you take out the policy. It is not offset against other forms of benefits or unearned income in the instance your ability to work is impacted by illness or accident. Ensuring that you have money to pay towards your mortgage or rent payments and help protect your lifestyle from financial strain. |