A wider cover for the self-employed

I commend the Accident Compensation Corporation for introducing the ACC Cover Extra, which would benefit a large number of self-employed people.

I believe it is a great initiative, which provides a wider choice for cover, enabling owner-operated enterprises and small entrepreneurs to enjoy the benefits of a flexible product.

A great feature of the ACC cover plus extra is that you do not have to prove your income while lodging a claim.

You agree on an amount upfront and pay levies for only what you will be entitled to claim. In most other types of insurance cover, self-employed persons must prove their income at the time of claim and provide the last full financial year-end income as evidence.

ACC covers us for accidents, but statistically we are more likely to suffer from critical illness than an incident on the road.

ACC Cover Plus Extra allows you to lower your levy and spend that money on Private Income Cover, which provides insurance for accident and illness.

According to Statistics New Zealand, about 211,000 people were disabled due to disease or illness in 2006, about 29% more than those involved in accidents.

If you are looking for insurance cover with low premium, you must be aware of the level of cover a private insurance company will be able to offer first.

An insurer offering illness cover will usually underwrite the cover, meaning health questions and or medical tests will be required.

Another point to note is that ACC Cover provides accidental life cover of approximately 50% of pre-disability income to the surviving partner for a maximum of five years and approximately 20% for children until the age of 18.

Before making any move in lowering your ACC premium, you should ask an insurance advisor to prepare a comparative analysis of the pros and cons of replacing this with private income cover.

Hamish Patel is an insurance adviser for mortgagesonline.co.nz Phone:(09) 6254693; Mobile: 021-625693 Email: hamish@monline.co.nz

ACC CoverPlus Extra

You can tailor the level of cover for lost earnings to suit your own personal circumstances, subject to ACC underwriting.

If you make a claim, there is no need to prove your earnings, as the weekly compensation has already been agreed. This means you may receive your weekly compensation quicker.

You will receive 100% of the amount of the agreed lost earnings compensation until you are fit for full-time work.

ACC CoverPlus and ACC CoverPlus Extra

The key difference is the amount of lost earnings compensation you receive.

With ACC CoverPlus Extra, you get 100% of the amount you negotiate. Because you have agreed cover, you may begin receiving compensation more quickly.

Whichever option you choose, ACC will provide assistance with treatment and rehabilitation costs.

ACC CoverPlus Extra is an optional product that lets self-employed people and Non-PAYE shareholder employees negotiate a pre-agreed level of lost earnings compensation. They would know how much they would receive while off work due to injury, whether such injury was work-related or not.

If you choose ACC CoverPlus Extra, this will replace your standard ACC CoverPlus product.

Source: Accident Compensation Corporation

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