Calculate the Total Permanent Disability (TPD) insurance lump sum cover needed to protect your family if illness or injury permanently prevents you from working. TPD pays a tax-free lump sum when you can never return to work, covering both accident AND illness (which ACC does not cover).
According to Stats NZ Household Disability Survey 2023 (released 27 February 2025), 17% of New Zealanders (851,000 people) are disabled. AIA paid over $23 million in TPD claims in 2024 alone. Most cases of permanent disability in working-age adults are caused by illness (cancer, multiple sclerosis, motor neurone disease, Parkinson's, severe mental illness, stroke) - conditions not covered by ACC.
This calculator models your cover needs based on outstanding debts, home and vehicle modifications, carer costs, lost KiwiSaver contributions, and long-term income replacement. It estimates premium based on age, gender, smoker status, occupation class, and cover structure (own occupation vs any occupation, standalone vs accelerated). Rates reflect current 2026 pricing from AIA, Chubb Life, Fidelity Life, Partners Life, Asteron Life, and OnePath.
Released 27 February 2025, the first major Stats NZ disability survey in a decade:
For working-age adults, illness is the primary cause of permanent disability. ACC covers only accidents - leaving a large gap that TPD insurance fills. AIA paid $23 million in TPD claims in 2024.
Total Permanent Disability (TPD) insurance pays a tax-free lump sum if illness or injury permanently prevents you from working. Unlike income protection (which pays monthly during temporary disability), TPD addresses the catastrophic scenario where you can never work again. The lump sum is yours to use however you need: clearing the mortgage, making home accessible, buying a modified vehicle, funding long-term care, or replacing lost income.
Most NZ TPD policies cover permanent disability from any cause. Conditions that typically trigger automatic payment (without occupation test) include:
This is the most important decision when buying TPD cover. The definition directly affects when you can claim.
| Aspect | Own Occupation | Any Occupation |
|---|---|---|
| Claim test | Cannot work in your specific pre-disability job | Cannot work in ANY job suited to education, training, experience |
| Example: Surgeon loses fine motor control | Claim accepted (cannot perform surgery) | Claim often declined (could work as medical consultant or administrator) |
| Typical premium | 30-50% more expensive | Baseline |
| Availability | Only occupation classes 1-3 (professional/office) | All eligible occupations |
| Best for | Professionals, specialists, skilled trades whose income depends on specific abilities | General workers, budget-conscious, high-risk occupations |
Many NZ advisers recommend own occupation as default where budget allows. The premium difference is significant but so is the difference in claim triggers. For a surgeon, pilot, musician, or programmer, own occupation can be the difference between a paid claim and a devastating decline.
Many insurers offer Modified TPD for homemakers, stay-at-home parents, retirees, and others not in paid employment or ineligible for occupation-based cover. The claim test is usually:
Modified TPD is typically 25% cheaper than Any Occupation cover and is the appropriate choice where the insured does not have an earned income.
| Feature | TPD | Trauma | Income Protection |
|---|---|---|---|
| Payout form | Lump sum | Lump sum | Monthly income |
| Trigger | Permanent inability to work | Diagnosis of defined condition | Temporary inability to work |
| Waiting period | 6 months (permanence test) | None (paid on diagnosis) | 4 weeks to 104 weeks (your choice) |
| Pays if you recover? | No (must be permanent) | Yes (paid on diagnosis) | Only while still disabled |
| Best for | Worst-case permanent scenario | Medical treatment + recovery buffer | Ongoing income support during recovery |
| Typical cover | $500K to $2M+ | $100K to $500K | $3K to $15K/month |
These three covers address different scenarios. Many families hold a combination: TPD for the catastrophic scenario, trauma for the diagnosis gap (medical + recovery), income protection for ongoing income during any extended off-work period.
The comprehensive formula includes:
ACC (Accident Compensation Corporation) provides no-fault injury cover but has significant limitations:
If you develop an illness that permanently prevents work (cancer, MS, severe mental illness, stroke complications), your only government support is Supported Living Payment from Work and Income - typically $380-$480 per week depending on circumstances. This is far below most working-age New Zealanders' pre-disability income.
Most NZ insurers exclude or heavily load TPD cover for high-risk occupations due to claims history. Excluded or high-load occupations typically include:
If you work in one of these, check with a specialist adviser for workplace group schemes or specialist insurers before assuming cover is unavailable.
Certain hobbies may result in specific exclusions on your policy (claims related to these activities will not be paid):
For personal TPD insurance in New Zealand:
This tax treatment aligns with life insurance and standalone trauma insurance. It differs from income protection where premiums are typically deductible and benefits are taxable. For business-owned TPD (key person cover), different tax rules apply.
If you hold accelerated TPD (linked to life cover) and make a TPD claim, your life cover reduces by the TPD payout amount. Most insurers offer a Buy-Back Benefit that allows you to restore the full life cover amount after 12 months, without new medical underwriting. This is valuable because your family still needs life cover after a TPD claim, especially if you are now higher-risk due to the condition that caused the TPD claim.
TPD insurance is a life insurance product regulated in New Zealand by:
Duty of utmost good faith applies. Non-disclosure of material health or occupation facts at application can void claims.
Sources: AIA Living TPD product disclosure statement and Claims Compass 2024. Chubb Complete Disablement Cover brochure. Fidelity Life, Partners Life, Asteron Life, OnePath product wordings. Stats NZ Household Disability Survey 2023 (released 27 February 2025). Stats NZ Labour Market Statistics (Disability) June 2023 quarter. ACC Permanent Injury Compensation information. Policywise, MoneyHub, QuoteHub NZ market research April 2026.
This calculator provides indicative estimates only based on NZ market research and does not constitute financial or insurance advice. Actual TPD premiums depend on full medical and occupational underwriting, family medical history, hobbies, and insurer-specific factors. Definitions and conditions covered vary significantly between insurers. Always obtain personalised quotes from multiple insurers or through a qualified insurance adviser and carefully review the full policy wording before purchasing cover.
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