CoverPlus Extra can be extremely beneficial for self-employed and shareholder/employees instead of the usual CoverPlus in the unfortunate event of an accident.
With the default Cover Plus you must prove your income at the time of your claim and this can be difficult and time-consuming. Your latest accounts may not be prepared or you may be out of action because of your accident. Changes in earnings patterns can be detrimental.
The maximum payout is 80% of your earnings less tax.
CoverPlus Extra allows for much greater flexibility and you receive 100% of cover less tax. The cover allows for certainty because it is pre-agreed using average income over the past three years. Or you can choose how much of your income you want covered. This can be up to 30% above what you earned the previous year up to the maximum figure set by ACC, currently $99,242 (80% of $122,063).
On the other hand as a self-employed or shareholder/employee you may wish to minimise the cost (and also the cover) by paying on the minimum currently $25,376 pa (i.e 80% of $31,720). This suits many including those over 65 years old still working.
If you decide you are ready for a gradual return to work CoverPlus Extra allows you to receive your full benefit as long as you don’t exceed 30 hours per week. The same does not apply to the default CoverPlus.
You can also be better off if your personal income is not a true reflection of your actual earnings. This can arise if your income is split with a partner for tax purposes. Example: If you are a couple earning $100k between you with a 50/50 income split and you are in fact the main breadwinner, CoverPlus will grant you only $40k compensation (80% of $50). Clearly the hardship would soon kick in.
CoverPlus Extra is definitely worth considering. To find out more and how it may work for you, contact us by phone or email.