Payment Protect for Borrowers

main computerThe unexpected can happen at any time, so make sure you and your family are prepared with Payment Protect.

Introducing Payment Protect for Borrowers

Introducing Payment Protect for Borrowers

The unexpected can happen at any time, so make sure you and your family are prepared with Payment Protect.

The unexpected can happen at any time, so make sure you and your family are prepared with Payment Protect.

What is Payment Protect?

From a borrower’s perspective, Payment Protect is a repayment waiver. It is an optional service you can choose to add to your loan when you accept the loan offer. You are not required to take out Payment Protect for your loan to be approved.

There are two levels of Payment Protect:

  • Partial cover. This covers death and terminal illness
  • Complete cover. This covers death, terminal illness, disability (due to illness, a medical condition, or accidental injury), and redundancy.

If you take out Payment Protect and you are affected by an event for which you are covered by Payment Protect and which impacts your ability to make your loan repayments, you will not be liable for payments covered that fall due after you have notified Harmoney and your waiver application has been approved.

The maximum amount waived depends on your level of cover and the nature of your event.

The table below outlines events eligible for Payment Protect cover if you have it and the terms governing repayment waiver applications.

If you have a co-borrower for your loan and one of you chooses to add Payment Protect, both of you must get Payment Protect. However, one of you could get Partial cover and the other Complete cover.

If you have Payment Protect it is important to contact Harmoney as soon as possible when an event happens that could activate your Payment Protect cover, so your repayment waiver application can be processed.

Please note: Payment Protect is not a type of insurance cover. It is a repayment waiver service designed to cover your loan repayments under specific conditions as outlined this table, below, and in the Payment Protect terms (contained in the Loan Contract).

We recommend you seek independent financial advice on whether insurance products are relevant to your situation.

Payment Protect information for lenders

Read the full Payment Protect terms contained in the Loan Contract.

LevelEventEmployment RestrictionsWaived repaymentsMaximum amount waivedStand down periods
Exclusions apply for all levels of cover – see section 7 of the Payment Protect Terms for a list of exclusions.
Partial & Complete Death - You die None All your remaining monthly repayments that fall due after we have been notified of your death No maximum None – immediate cover
Partial & Complete Terminal illness - You suffer or are diagnosed with an illness or accidental injury that is likely to cause your death within 12 months None All your remaining monthly repayments that fall due after you have notified us of your terminal illness No maximum None – immediate cover
Complete Disability - You suffer or are diagnosed with an illness or accidental injury that makes you unable to work You must be:
  • permanently employed for at least 20 hours per week when you suffer the disability; or
  • self-employed for at least 20 hours per week when you suffer the disability.
Your monthly repayments that fall due after you have notified us of your disability and before you are able to work again for 20 hours per week or more 24 months' repayments (combined total for all illnesses and accidental injuries)
  • Illness that starts or is diagnosed during first 30 days of Payment Protect: no cover
  • Other illnesses, and all accidental injuries: 14-day stand-down period (ie. repayments due during first 14 days off work after you have notified us of your illness or disability are usually not waived)
Complete Redundancy - You become unemployed due to redundancy You must be in permanent employment for at least 20 hours per week for at least three months immediately before becoming unemployed due to redundancy Your monthly repayments that fall due after you have notified us of your redundancy and before you are permanently employed again for 20 hours per week or more 5 months' repayments (combined total for all redundancies) No cover if, within the first 30 days that you have Payment Protect, you:
  • receive a redundancy proposal; or
  • receive a redundancy notice; or
  • become unemployed due to redundancy

Frequently Asked Questions

How much does it cost to get Payment Protect?

The fee for Payment Protect is charged at the rate specified on the Borrower Fees section of  Interest Rates and Fees.

The total loan amount is increased to cover this fee (ie the fee is capitalised) so that you, in effect, pay the fee down as part of your monthly loan repayments.

If you choose to add Payment Protect to your loan, a Payment Protect fee will be added to your loan amount. The fee is calculated as a percentage of your loan, and then your monthly repayments will be based on your loan amount plus the Payment Protect fee. For example, if you take out a $10,000 loan for 36 months with Complete cover, the Payment Protect fee will be $575 (Note: all Payment Protect fees are rounded to the nearest $25).

If you need to make a claim, and that claim is successful, any waived repayments will be covered by the Payment Protect fee you have paid upfront.

How does Payment Protect work?

There are two levels of Payment Protect:

  • Partial cover. This covers death and terminal illness
  • Complete cover. This covers death, terminal illness, disability (due to illness, a medical condition, or accidental injury), and redundancy.

Below is an overview of the benefits that are offered. This is only a brief summary. Read the full Payment Protect terms.

What exclusions are there to Payment Protect cover?

"Terminal illness", "disability" (including "accidental injury"), and "redundancy” are specifically defined in the Payment Protect Terms as they appear in the Loan Contract. The mean of each event is set out in the section of the terms document dealing with that event:

  • Section B: Death
  • Section C: Terminal illness
  • Section D: Disability
  • Section E: Redundancy

For an event to be covered it must fall within the exact definition.

Section F of the Payment Protect Terms covers exclusions to the cover provided by Payment Protect. For example, there is no cover for pre-existing medical conditions.

A waiver application must also meet certain other conditions, such as (among other things):

  • You must be up to date with your loan payments
  • Events must happen within the original loan term. If your loan term is extended for any reason, events occurring in the extension period are not covered.

The specific conditions that apply to each event are set out in the section relating to that event. For example, the conditions for a disability waiver are set out in Section D: Disability.

Please note: If you took out Payment Protect prior to June 17, 2019 you will find previous Payment Protect terms relevant to your repayment waiver application here

Do I need Payment Protect?

Payment Protect is a repayment waiver. It is an optional feature you can choose to add  to your loan.

Payment Protect can help protect you against unexpected events that may affect your ability to repay your loan. These could include job loss, illness, disability, or death.

If such an event happens, having Payment Protect means you will not have to pay monthly loan repayments for which you have cover, that fall due after you have notified us of the event.

You are not required to take out Payment Protect as part of your loan, but you can take it out if you want to and you meet the application criteria.

How do I know if Payment Protect applies to my loan?

The loan disclosure will confirm whether Payment Protect applies to your loan and, if so, what type of cover you have and the fee for it.  If you are co-borrowers on a loan, the loan disclosure will confirm the type of cover that each of you have, and the fee for it.

What happens if a payment is waived under Payment Protect?

If a Payment Protect waiver application is approved, you will no longer owe the monthly loan repayments that are waived.

The number of payments waived depends on your level of cover and the nature of the event.

Harmoney will not charge overdue fees on waived repayments, refer them to a collections agency, take any court action to recover them, or report them as overdue to a credit reporting agency.   

Any repayments due after a covered event has occurred, but before you have notified us in writing, do not qualify for a Payment Protect waiver.  In cases of disability for which a 14-day stand-down period applies, only repayments that fall due 14 days after we have received written notice of the event, will be waived.

For example, if you fell ill on the 10th of the month the first repayment that could be waived after the 14-day stand-down period has finished is a repayment due  on or after the 24th of the month.

You are required to notify Harmoney of a disability, redundancy or terminal illness event within 60 days. There is no time requirement for notice of death.

Once Harmoney has been notified of an event, including death, all required information and documentation must be supplied within 30 days.

However, it is in your interests to notify us as soon as possible when an event occurs for which you have Payment Protect cover. This means your waiver can be assessed and, if approved, applied as soon as possible. 

What happens to the Payment Protect fee if I pay off my loan early?

If you repay the loan in full early, including if you take out a Harmoney Top Up, part of the Payment Protect fee will be rebated.

The calculation of your rebate is outlined in the Payment Protect terms.

A rebate will also apply if your Payment Protect cover is cancelled. In this case you will be entitled to a rebate on the Payment Protect fee that would have been payable for the period from the date of cancellation until the end of the loan term.

Could I be liable for further costs under Payment Protect?

If Harmoney incurs medical, investigative, legal or others costs in verifying or assessing your entitlement to cover, we will bear those costs unless, as a result of that process, we determine you are not, or are no longer entitled to the cover. In that case those costs will have to be paid by you.

When can Harmoney refuse a Payment Protect repayment waiver application?

Harmoney can refuse to waive any payment, alter your Payment Protect cover, or cancel your Payment Protect cover if you, or any person on your behalf, gives us false or fraudulent information or documents in your application for the loan, your application for Payment Protect to apply to the loan, or any Payment Protect claim you make.

Am I eligible to add Payment Protect??

Payment Protect is an optional addition to your Harmoney loan. Approval for a Harmoney loan is not conditional on taking out Payment Protect.

If you wish to add any kind of Payment Protect repayment waiver, you must be:

  • aged between 18 and 65
  • a New Zealand resident

And to be eligible for Payment Protect Complete cover you must be:

  • Permanently employed for at least 20 hours a week and have held that position for at least three months, OR
  • Self-employed for at least 20 hours a week.

What repayments cannot be waived?

Payment Protect does not cover the waiver of repayments that fall due before you have given Harmoney written notice that an event for which you are covered has occurred.

Only repayments that fall due after you have given Harmoney written notice will be waived. This is assuming your claim meets the requirements set out in the Payment Protect terms.

It is therefore important to notify an event to Harmoney as soon as possible even if you do not yet have all the supporting documents ready.

You can provide the supporting documents later, provided Harmoney receives all supporting documents and any additional information it requires within 30 days after notification of the event has occurred.

If a payment falls due after you have provided Harmoney written notice, but before you have provided all required information and documents, that repayment will be waived. This is provided you have provided information within the required time period and your claim meets the requirements set out in the Payment Protect terms.

If you give Harmoney written notice an event has occurred before midday on the day on which a monthly repayment is due, we will treat the notice as received in time for that monthly repayment to be waived. This is assuming the waiver application meets all other requirements.

After midday, that day’s payment cannot be waived.

If the payment due date falls on a non-working day, you have until midday on the next business day to file your waiver application.

Please note: in cases of disability for which a 14-day stand-down period applies, only repayments that fall due 14 days after we have received written notice of the event, will be waived.

For example, if you fell ill on the 10th of the month, the first repayment that could be waived after the 14-day stand-down period has finished is a payment due on or after the 24th of the month.

Does Payment Protect cover me if my loan is extended?

Your Payment Protect plan does not cover events that occur after the original loan term has ended.  This is because the fee you have paid is calculated on, and covers only, the original loan term.

This means that if the term of your loan is extended for any reason, such as following an  unforeseen hardship application, you have cover only for events occurring during the original loan term.

Note that if you opt for Harmoney Top Up, that does not count as extending your loan. Harmoney Top Up means your original loan is paid off and a completely new loan is written for a new amount. Your Payment Protect does not automatically renew with Harmoney Top Up. You can decide if you wish to include Payment Protect on your new Top Up loan when you apply.

Are there Payment Protect exclusions for pre-existing health conditions or risks?

Payment Protect does not cover you for repayment waivers if you have pre-existing conditions that relate directly or indirectly to the event that causes you to make a claim.  

These can include illness, injury, congenital or degenerative condition(s), or other medical condition for which you sought - or could have reasonably been expected to seek - advice or treatment before the plan start date.

Can I claim repayment waivers if I am working overseas?

If you are made redundant while working overseas you are not eligible for a repayment waiver with Payment Protect, even if you return to New Zealand and remain unemployed here.

Does Payment Protect cover me while I am travelling overseas?

Payment Protect only covers you for events, such as death, terminal illness, disability or redundancy that happen in New Zealand.

For example, if you use your Harmoney Loan to go travelling and you have an accident overseas that causes a disability preventing you from earning income to make your repayments, you are not eligible for a waiver.

Can my Payment Protect be cancelled?

Your Payment Protect plan may be cancelled by Harmoney if it becomes apparent that you, or someone acting on your behalf, has provided us with false or fraudulent information or documents in connection with an event resulting in a repayment waiver request.

The cancellation will be made by notice to you and take effect from the date specified in that notice.This date cancellation takes effect may be earlier than the date of the notice.

Is the cost of Payment Protect refunded to me if I don't make a repayment waiver claim during the course of my loan?

If your loan goes the full term and you do not use your Payment Protect service we do not refund the payment protect fee.

The Payment Protect fee is paid upfront and in full for the full term of your loan. Should you repay your loan early, you will be rebated a proportion of the Payment Protect fee for the remainder of the Loan term.

How do I notify Harmoney of an event and apply for a repayment waiver?

If an event occurs for which you want to apply for repayments to be waived with Payment Protect, you must supply Harmoney with:

  • written notice of the event (this can be done via your borrower dashboard or email to customerservice@harmoney.co.nz);
  • a completed claim form, (this will be sent to you by Harmoney)
  • all documents to support your application for repayment waiver.

The documents required for different events are outlined in the Payment Protect terms. The requirements of each event are set out in the section of the terms document dealing with that event:

  • Section 2: Death
  • Section 3: Terminal illness
  • Section 4: Disability
  • Section 5: Redundancy

What happens if you receive notice of an event the same day repayment is due?

If you give Harmoney written notice an event has occurred before midday on the day on which a monthly repayment is due, we will treat the notice as received in time for that monthly repayment to be waived.

This is assuming the waiver application meets all other requirements.

After midday, that day’s payment cannot be waived.

If the payment due date falls on a non-working day, you have until midday on the next business day to file your waiver application.

How soon do I have to notify Harmoney so I can have repayments waived?

In the case of disability, redundancy or terminal illness you must provide Harmoney with written notification within 60 days of the event occurring.

In the case of death there is no time limit for supplying Harmoney with written notice of the event. Once Harmoney has been notified, all documents and information must be supplied within 30 days.

If Harmoney does not receive all the documents and information required within the required time frames after the event occurs you will not be entitled to have any repayments waived in respect of the event.

It is a good idea to contact Harmoney as soon as possible after an event has occurred for which you are covered by Payment Protect, so if your application for waiver is approved, your repayments can be waived as soon as possible.

Payment Protect does not cover the waiver of repayments that fall due before you have given Harmoney written notice that an event for which you are covered has occurred.

How will I know if Harmoney needs more information for my Payment Protect waiver application?

Should Harmoney require further documents or information to assess your waiver application we will notify you.

If you receive notification that further information is required, you must supply that information to Harmoney within 60 days of the event occurring, except in the case of death.

In the case of death there is no time limit for supplying Harmoney with written notice of the event.

Once Harmoney has been notified all documents and information must be supplied within 30 days.

If Harmoney does not receive all the documents and information required within the required time frames after the event occurs you will not be entitled to have any repayments waived in respect of the event.

Please contact Harmoney on customerservice@harmoney.co.nz or 0800 427 666, if you need any guidance about:

  • whether you qualify for a repayment waiver in particular circumstances,
  • how to apply for the repayment waiver
  • how the repayment waiver process works.

Does Payment Protect apply to a co-borrower?

If you have a co-borrower for your loan and one of you chooses to add Payment Protect, both of you must get Payment Protect. However, one of you could get 

Partial cover and the other Complete cover.

If your spouse or partner is not liable to pay monthly repayments on the loan under his or her Payment Protect plan  (eg. because of his or her disability if he or she has Complete cover), you are not liable for those monthly repayments during the period the repayments are waived.  

This is the case even if you and your co-borrower have different types of Payment Protect cover.

Read the full Payment Protect terms.

How do repayment waivers work for co-borrowers?

If both you and your spouse or partner have Payment Protect on the same loan and something happens to them for which they are entitled to a repayment waiver, you will not be liable for those payments.

For example, you have Complete cover and your spouse or partner has Partial cover. If they become terminally ill or die, you will not be liable for any payments, because those payments will be covered by your partner’s Payment Protect Partial.

However, if, for example, you have complete cover and your spouse or partner has Partial cover, and your partner becomes disabled, neither you or partner are eligible for repayment waiver as their Payment Protect Partial does not cover disability.

In the case of redundancy or disability, if both of you have Payment Protect Complete and you are both unemployed due to disability or redundancy, each of you will separately receive the payment waiver during that time after you have notified Harmoney.

The repayments waived during that time will be taken into account against each of you in calculating the maximum number of repayments for which you each have cover.

For example:

You are unemployed due to redundancy from 1 March to 30 June. Your spouse is unemployed due to redundancy from 1 June to 31 July, the same year.

Each of you notifies Harmoney on the morning your respective redundancies take effect. The repayment falling due in June of that year, will be waived in favour of each of you.

You will be treated as having received the redundancy waiver for four months (March, April, May, and June), so you will have cover for one further repayment if you are made redundant again.

Your spouse will be treated as having received the redundancy waiver for two months (June and July), so he or she will have cover for a further three repayments if he or she is made redundant again. 

What are my rights as a Payment Protect customer?

The Payment Protect terms, included in your loan contract (or provided to you as a separate document if you took out Payment Protect before 17 June 2019 if you choose to take out Payment Protect, includes your rights as a Payment Protect customer.

You may also have rights under New Zealand's consumer protection laws. We will operate Payment Protect in a way that complies with those laws. 

Is Payment Protect an insurance product?

No. This is a repayment waiver and not an insurance product. The agreement is only to waive the right to collect repayments, and does not provide you with additional funds. However the terms of the policy have some similarities to loan repayment insurance.

What does Payment Protect not cover me for?

As comprehensive as Payment Protect cover is, there are certain things you will not be covered for. It would be advisable to review the full list of exclusions under Section F in the Payment Protect Terms and Conditions.

Does Payment Protect cover my spouse or partner?

We have two options for you. You can take the Payment Protect for yourself if you are the only person named on the loan. If you have a co-Borrower on your loan, you are each able to take out Payment Protect so you are both protected. If there is a co-borrower on the loan it is not an option for only one of you to take out Payment Protect. Both you and the co-borrower must take out Payment Protect.

Am I eligible to add Payment Protect?

To be able to apply for Payment Protect, you have to be over 18 (but under 65); a citizen or permanent resident in New Zealand; and for Complete cover either you need to be Permanently employed for at least 20 hours a week for at least three months before becoming unemployed due to redundancy; or self-employed for at least 20 hours per week and have had your business for at least two years.

If I already have income protection insurance, do I still need Payment Protect?

Income Protection benefits and policy terms differ by Insurer and we are unable to give you advice on this. However, Payment Protect covers you for your Harmoney loan in case of an unexpected life event. Payment Protect does not cover other loans or credit you may have with other companies. Please read the full terms and conditions.

What if I pay off my loan early?

If you repay your loan early, including taking out a Top Up, you will be rebated a proportion of your Payment Protect Fee. The calculation of this rebate is specified by the Credit Contract and Consumer Finance Act.

Who manages the claims process?

The claims process is managed in house by Harmoney’s claims specialists. This ensures that your experience is consistent and that the process is compliant with the Payment Protect Terms and the law.

What if I Top Up my loan and I already have Payment Protect on the first loan?

Because we re-write loans when you top up, we would pay back the first loan in its entirety and rebate you for the Payment Protect unused portion.   We would then write you a new loan and you are then able to take Payment Protect on your new loan for the new term and payment levels. NB: You cannot top up if you are in a waiver period or have a Payment Protect claim in progress

Can I make a Payment Protect claim if I am in arrears?

No. You must not have any Payments that are in arrears when you make a claim. Please read the full terms and conditions.

What happens if I make a Repayment that later qualifies to be waived?

If the Repayment is made because an automatic payment or direct debit instruction is not cancelled or adjusted in time, the Repayment will not be refunded to you. However it will not be included when calculating the maximum number of repayments that you do not have to make. e.g. If you made a successful redundancy claim you would still be eligible for 5 months of repayment waivers.

More questions?