Why do we need insurance if we have ACC?
It’s a common question that gets asked by New Zealanders when it comes to getting health insurance sorted - after all, why should you pay for something that you can get for free? But the reality is not as black and white as that. There are many occasions where ACC just doesn’t fit the bill, and it’s not designed to. That’s where personal insurances like health and life cover come in.
What is ACC?
Accident Compensation Corporation (ACC) is a government-funded initiative where medical treatment and any compensation required is paid for in the event that you get injured and need medical attention, or you can’t work.
It’s designed to fund treatment and recovery while you’re injured and off work, paying up to 80% of your salary. This benefit is actually not ‘free’ per se, rather it’s paid for via a levy that every employee and small business owner is required to contribute.
The important thing to note with ACC is that it only covers injuries, it does not cover illnesses or degenerative conditions. It can also be very restrictive, with any claims needing to relate to a sudden, specific injury, not something that occurred as a result of a pre-existing condition.
Because of these restrictions, many claims are often denied - you’ve probably heard of, or know someone, who has had an ACC claim denied for one reason or another.
Whilst ACC has its place in ensuring New Zealanders are safe, it only goes so far, and that’s why it’s important to have a more solid protection plan in place.
How insurance differs
Personal insurance differs from ACC in a variety of ways. You have a lot more control over what you’re covered for, and the extent of coverage offered spans far wider than just an accident.
There are several different types of insurance that are designed to give you peace of mind so you don’t need to rely solely on ACC. Income protection insurance is one. With this type of cover you’ll receive a percentage of replacement income not just in the event of an accident, but also if you’re diagnosed with an illness that’s not covered under ACC.
Life insurance is another option to keep your family protected should anything happen to you. If you die as the result of an accident or illness, you’ll receive a lump sum payment to help with your family’s financial future. You can also get life insurance that provides extra support if you’re diagnosed with a critical illness or a permanent disability.
Although ACC has similar payout options, they only come into play if you die from a sudden, specific accident. Because you’re more likely to die from an illness than an accident, it’s important that you get proper insurance sorted.
So while you think you’re absolutely fine relying on ACC, think about what would happen if you were to be diagnosed with an illness. Or what the outcome would be if you made a claim for an event that was then denied by ACC.
It pays to weigh up all of your options and have a plan in place should the worst happen. That’s why we’re here to help you get it right. We can go through all of your options, even looking at what cover you might like to have to work alongside ACC, so you can rest assured you’re doing the best thing for yourself and your family.