Helping You Protect More Than Just Your Life

When people think about personal insurance, health & life insurance often comes to mind first. But there are other types of cover that are just as important when it comes to protecting your income, lifestyle, and your family's financial wellbeing.  At HealthCarePlus, we call these other types of protection "Life & Living" Insurance as they are often categorised along side life insurance.

This guide is here to help you understand three of the most important types: Trauma (critical illness) Insurance, Disability(Total Permanent Disablement -TPD) Insurance, and Income Protection Insurance.

So What is Life & Living Insurance?

If you experience a serious illness, the bills don’t stop. This can create significant financial stress at a time when you should be focusing on what’s most important. 

With Life & Living Insurance, you’ll have peace of mind knowing that if the unexpected were to happen, you and your loved ones will be looked after.  Life & Living Insurance includes:

• Life Insurance - in case of death or terminal illness
• Trauma Insurance - if you suffer from a defined illness or condition such as cancer, a heart attack or a stroke.
• Disability Insurance - if you become permanently disabled and are unable to work due to serious illness or injury.
• Income Protection Insurance - pays you a monthly amount to compensate for your lost income if you were to become disabled as a result of illness or injury.

Together, these insurances can provide a financial safety net during some of the toughest times in life: serious illness, permanent disability, or when you can't work due to injury or illness.

Listen to Nigel Latta talk about why its important in this video from NIB: 

1. Trauma or Critical Illness Cover

What is it?

Trauma insurance (also known as critical illness cover) is a type of insurance that pays you a one-off, tax-free lump sum if you're diagnosed with a serious medical condition like cancer, heart attack, or stroke. The money can be used however you need — to help cover medical treatment, take time off work, pay the mortgage, or support your recovery — giving you financial breathing room during a health crisis so you can focus on getting better, not just getting by..

Why does it matter?

It matters because a serious illness can strike anyone, at any time — and the financial impact can be just as overwhelming as the health impact. Even with public healthcare, many New Zealanders face unexpected costs like specialist treatment, time off work, or travel for care. Trauma insurance provides a financial cushion during this difficult time, helping to relieve stress, protect your family’s lifestyle, and give you choices in how and where you recover — so money isn’t yet another thing to worry about when your health is already under pressure.

Key Features:

• Lump Sum Payment - You receive a one-off, tax-free lump sum if you're diagnosed with a covered critical illness (e.g. cancer, heart attack, stroke).. The payout can be used however you choose - for treatment, bills, mortgage, or time off work.
• Covers a Range of Serious Conditions - Most policies cover 40+ defined medical conditions. Commonly covered conditions include: cancer, heart attack, stroke, major organ failure, and multiple sclerosis. Each insurer has their own definitions and list of conditions so it’s important to review these carefully.
• Quick Access to Funds - Claims are usually processed faster than other types of insurance (such as TPD or income protection), providing funds when you need them most, often during diagnosis and early treatment.
• Can Be Purchased Standalone or with Life Insurance - it can be bought on its own or as an add-on to a life insurance policy. Some policies offer the option to reinstate cover after a claim (useful if you want ongoing protection).
  
  
  

2. Disability or Total Permanent Disablement (TPD) cover

What is it?

Disability cover (often called Total Permanent Disablement or TPD insurance) pays you a one-off lump sum if you become permanently disabled and are no longer able to work in your usual job or any suitable work for which you're reasonably qualified. It’s designed to help you and your family adjust financially — covering things like mortgage repayments, medical care, home modifications, or ongoing living costs — so you can focus on living well, even if you can’t earn an income again.

Why does it matter?

It matters because a permanent disability can take away your ability to earn an income — often for the rest of your life — while dramatically increasing your day-to-day expenses. Whether it’s adapting your home, paying for long-term care, or simply covering basic living costs, the financial impact can be overwhelming. TPD insurance provides a lump sum that helps you and your family maintain stability, independence, and dignity if the unexpected happens — so a health crisis doesn’t become a financial crisis too.

Key Features:

• Lump Sum Payment - Provides a tax-free, one-off payment if you're permanently unable to work due to illness or injury. You can use the payout however you need — to clear debt, fund long-term care, modify your home, or invest for ongoing income. Can help fund long term support by assisting with rehabilitation, caregiver costs, or lifestyle adjustments after a major life change.

• Covers Permanent Disability - Pays out when a medical condition or injury leaves you unable to ever return to work in your usual occupation or any suitable work (depending on policy type). Covers both physical and mental health conditions.

• Own Occupation vs. Any Occupation - Policies may define disability based on your own job or any job suited to your training and experience. “Own occupation” offers broader protection but may come with higher premiums.

• Often Bundled with Life Insurance - TPD can be added as an optional extra to a life insurance policy or purchased separately. Some policies allow for partial or progressive payments based on the level of disability.

What is the difference between trauma insurance and Disability (TPD)

Disability cover (TPD) and trauma insurance are both designed to support you during serious health events, but they cover different situations and pay out under different conditions.

Trauma insurance pays out when you’re diagnosed with a specific serious illness (like cancer, heart attack, or stroke), regardless of whether you recover or return to work. It's about helping you cope financially during treatment and recovery.

Disability cover (TPD) only pays out if your condition results in permanent disability — meaning you're unable to ever return to work in your usual role or any similar occupation. It’s focused on long-term loss of income due to a permanent condition.

In short:

Trauma = Serious illness (but you may recover)
Disability = Permanent inability to work (you won’t recover fully)

Having both can give you broader protection across short-term recovery and long-term life changes.

3. Income Protection Cover

What is it?

Income protection insurance pays you a monthly income if you're unable to work due to illness or injury. It helps replace a portion of your lost earnings (usually up to 75%) so you can keep up with essential expenses like rent or mortgage, bills, groceries, and childcare while you recover. It’s designed to provide financial stability during uncertain times, giving you breathing room to focus on your health — not your finances.

In short: it’s like a financial safety net that keeps your income flowing when your health puts life on pause.

Why does it matter?

It matters because your ability to earn an income is one of your most valuable assets and it can disappear in an instant if illness or injury stops you from working. Most people rely on their income to pay for everyday essentials like rent or mortgage, groceries, bills, and childcare. Without it, even a short-term health setback can quickly lead to financial stress. Income protection helps ensure that you can maintain your lifestyle, support your family, and recover at your own pace — without the added pressure of lost income. It’s peace of mind that your finances are covered, even if your health isn’t.

How does it work?

If you get sick or injured and can’t work, your income protection policy will start paying you a regular monthly amount (usually up to 75% of your normal income) after a waiting period — typically 4, 8, or 13 weeks, depending on the option you chose when you took out the policy. These payments continue for a set benefit period, such as 2 years, 5 years, or until age 65 — or until you're well enough to return to work.

The money is yours to use however you need: paying the mortgage, rent, utilities, groceries, or even helping with rehab or childcare while you recover. It’s especially valuable for self-employed people or anyone without sick leave entitlements.

Key Features:

• Monthly Income Replacement- It pays up to 75% of your pre-tax income if you're unable to work due to illness or injury. Paid monthly to help cover everyday living costs like rent/mortgage, bills, and groceries during your recovery period.  As it's pre-tax the income will be taxable.

• Waiting Period - You choose how long to wait before payments begin (commonly 4, 8, or 13 weeks). Shorter waiting periods cost more but provide faster support.

• Benefit Period - Payments continue for a set period (e.g. 2 years, 5 years, or until age 65), depending on the policy you choose. The longer the benefit period, the more comprehensive (and costly) the cover.
  

What's the difference between Income cover and TPD?

The key difference between income protection insurance and Total Permanent Disablement (TPD) insurance is how and when they pay out, and what they’re designed to protect.

Income Protection Insurance pays a monthly income (usually up to 75% of your earnings) and is designed for when you’re temporarily unable to work due to illness or injury.  The payments continue while you recover, up to a set period (e.g. 2 or 5 years, or to age 65). It helps cover short- to medium-term financial needs like rent, bills, groceries, and rehab.

TPD (Total Permanent Disablement) Insurance pays a one-off lump sum and is designed for when you become permanently unable to return to work in your usual occupation or any suitable work. There is no ongoing payment, just a single payout. It is intended to cover long-term or life-long expenses, like paying off the mortgage, modifying your home, or funding care

In short:

Income protection = Monthly pay out to help while you recover and return to work
TPD insurance = Lump sum payout to help when you can’t ever return to work again

4. Summary of key differences

5. Which Type is Right for You?

Everyone’s needs are different. The right mix depends on your lifestyle, income, dependants, and financial commitments.  See this short video from Fidelity Life for more information:

That’s why it's important to discuss this with a certified financial advisers who can review your circumstances, discuss your individual needs and budget before you make any decisions on what cover suits you. 

For over 30 years Monument has been HealthCarePlus’s appointed business partner to provide that financial advice to HealthCarePlus Members on life and health insurance.  

There are four key benefits to booking a meeting with a Monument adviser to discuss your life & living Insurance requirements :

Choice of Insurers - they have access to all New Zealand's major health and life insurers

Making Informed Decisions - they will give you an honest view as to whether life & living Insurance is right for you.  And they will help you decide what plans are best suited to your needs and budget.

Help make things easy - they will always be there to help - not only when you apply but also be there to help manage any claims that happen.

10% discount for the life of the policy (not just the first year) - if you agree to go ahead and arrange your cover through a Monument financial adviser you'll get a 10% discount for the life of the policy (not just the first year) for each policy.

Its worth booking an appointment and find out what's best for you 

6. FAQs

Q: Do I need all three types of insurance?

A: Not necessarily. It depends on your stage of life, income, and responsibilities. A qualified adviser can help you choose the right mix.

Q: Can I combine these covers in one policy?
A: Yes. Many providers allow you to bundle life, trauma, TPD, and income protection into a single plan.

Q: How much cover should I get?
A: That varies. It’s best to base your cover on your financial obligations — mortgage, income needs, debts, children’s education, etc.