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Meeting an adviser? How to get the most out of your meeting

When you work with an adviser to get the right insurance in place, we want it to be as easy and accessible as possible. This might mean we come to your place after hours, or that you come to our office – part of what makes working with an adviser so great is our flexibility. If you want to know how to prepare for meeting an insurance adviser there are a few things you can do to get the most out of the meeting, whether you are looking for life insurance, income insurance, trauma protection or just some good insurance advice.

Allow enough time

If you know exactly what you want, half an hour may be okay. However if you are using an adviser because you want to draw on their expertise and experience, you need to allow enough time to for them to get a good understanding of your current situation and how you see your life changing in the future. It is best if neither party feels rushed.

Be open with your disclosure

Disclosure is a key part of making sure we choose the right policy and making sure you really are covered when you come to claim.

Don’t hold back because you are concerned you won’t get cover – chances are it would come out when you try to make a claim and it could be denied. There are lots of different providers and policies available, and when we know the full picture we can choose the best provider, policy or combination of policies to get the most comprehensive cover for your circumstances.

Give us your full attention

Life is busy – and it can be hard to fit everything in. However, if we have a meeting together you need to be able to give us your full attention. You may find insurance boring, but it is important!

This means make sure the kids are in bed, turn the TV off, and put your phone on silent. This is a professional meeting, and even if it is at your kitchen table it needs to be treated as such – otherwise you may miss key information or forget to tell us something critical.

Be prepared

There are a few things you can have ready before we arrive. If you have existing policies, have those details ready for us. Having your personal income details or business accounts ready is good, as is a clear idea of your own medical history and that of your family.

Ask lots of questions

We absolutely love it when you ask questions and are open to learning more! This gives us a great idea of what you already know and what is important to you. We know our stuff inside and out, but we don’t expect you to, so there really are no dumb questions.

Make sure you can both be there

Whether you are getting insurance along with your partner in life or your partner in business, it makes sense for you both to be available, especially for our initial meeting. We need to know what is important to both of you, and we need to know about you as individuals.

After the meeting

After we have met with you, we may need more information or official documentation. Following up on this promptly and partnering with us to chase up third parties, such as your doctor, makes a big difference to how quickly we can get your cover in place.

Relax, we are a team

Lastly, remember that your adviser is on your side.

We are not there to sell you something you don’t want or need, we are there to work with you to put together a plan for your future. It is not about a particular insurance product, it is about the outcome for you if something goes wrong, and insurance is just one of the tools we use to get the best outcome for you. That is why we will likely talk to you about wills, trusts and enduring power of attorney as well.

Are you ready to get an insurance adviser on your team? Get in touch with one of our advisers today.

Prepare for your meeting with an adviser

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What should you do when income protection premiums rise?

With the nature of insurance underwriting and risk trends, as you get older your insurance premiums will rise. This is as true for income protection as any other type of insurance, but has the added complication of the cover  automatically being cancelled when you reach age 65*.

So when you are in your early 60s and nearing retirement, your premiums are rising and your  pay-out period is increasingly limited, what do you do?

It can be tempting to cancel the cover and hope for the best, reduce your sum insured, or extend your wait period (the period before the cover starts to pay-out, usually 4, 8, 13 or 26 weeks), however this may not be your best option.

What are the issues?

If you are paying higher premiums but have extended your wait period or reduced your sum insured the value you get back in a claim continues to diminish.

If you are unable to work because of an accident you will be covered by ACC, regardless of your Income Protection sum insured or stand down period. This tends to mean that Income Protection can sometimes be redundant when ACC cover is helping, because most Income Protection policies are subject to offsets.

However, if you are unable to work because of an illness, this is where Income Cover helps – but you will only get a pay-out if you are off longer than your wait period – if that is four weeks and you are off work for five weeks you may only get one week paid out. So in a scenario where you are having to extend the wait period to keep premiums down, and are having to consider eight or 13 weeks before receiving benefits, alternative options can be considered.

In these scenarios, consider this: Given that ACC is there for accidents, your Income Cover becomes more about covering illnesses. If you have a long wait period such as 13 weeks, then the Income Cover only becomes effective in scenarios where an illness takes you out of action for more than three months. In most cases (although not all), these illnesses are likely to be conditions that are covered by trauma cover, such as cancer, heart attacks, strokes and so on.

How trauma cover can create a solution

For clients in this position we often recommend they consider trauma cover.

There are a number of reasons for this:

  • The entry rate of the premiums is lower
  • The pay-out is paid on the basis of a diagnosis, not on your ability to work
  • The benefit is paid as a lump sum so is paid out up front, without a wait period
  • You can use the pay-out however you see fit, it is not restricted in its use. It can be used to extinguish debt in one go, or support you as replacement income for an extended amount of time

So how could this work?

Let’s look at Andrew, a, 63-year-old lawyer. We’ve changed the name, but the figures are from a real client.

Andrew has income protection, with cover of $15,906 per month. He would get half paid out after an eight week wait, and the remaining half after a 13 week wait, but both only have a three month claim benefit. His premium is $223.67 per month.

This cover is mostly offset by any ACC payments available, so would only help by topping up ACC if Andrew can’t work because of an accident, only an illness.

The three month benefit period means he’ll only be paid for three months after his wait period (if he were off for that long) meaning his total potential benefit is just $47,718 – and he would need to be unable to work for a total of six months to receive that.

For a similar premium, $243.74 per month, he is eligible for $100,000 of accelerated trauma cover. This gives him more than twice the pay-out benefit, with no wait period and no requirement for time off work, as an up front, lump sum payment.

In addition to this, his income cover is going to expire at age 65, so the policy he currently has will cancel in two years. Trauma cover can be continued for life – so at this stage of his life and career with all the information available, Andrew may decide it is a much better use of his premiums.

The one downside we would make sure he was aware of is that the trauma cover has a list of specified conditions, whereas income protection is more of a catch all. However the list is extensive, and they tend to be the most common conditions.

What you need to know

You can have stand-alone trauma cover until age 70, however accelerated or linked-to-life cover you can have for life. Because you can have trauma cover for longer, you can get it on a level premium plan, so you know what it will be as a fixed expense which is great for budgeting in retirement.

Different types of insurance are better placed to meet your needs at different stages of life. Trauma cover is not superior to income protection and depending on where you are in your life or career, the best option is often to have both.

All types of insurance have upsides and downsides, and we want to empower our clients to make informed decisions.

It is always best to discuss your options with your adviser, they know the different types of insurance cover available, how to set them up to get the most out of them and what is going to suit you at different stages of your life and career.

 

*some providers offer “to age 70” options at an additional premium

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How to get your insurance claim paid

At a conference in February Nadine Tereora, the CEO of Fidelity Life, stated that their claims rating was 99.8%. All the insurance providers Plus4 work with have claims ratings of over 95%, which illustrates very clearly that insurance providers are paying out on the vast majority of claims that are made.

On the back of this evidence, and our own experience, as advisers we are often taken aback by the staunch belief of some people that insurance companies will do whatever they can to get out of paying out on claims.

If you are curious about that small percentage of claims that don’t get paid, read on, and find out what you can do to make sure you are in the 95% if you ever need to claim.

Disclose, disclose, disclose

Yes, all those forms are a pain to fill out, but doing it properly and taking it seriously is critical to getting that pay-out when claim time comes.

We believe the insurance providers we use pay out on all legitimate claims, but insurance providers need all the relevant information to be able to make the decision to underwrite a client’s insurance.

The main reason claims are not paid out is due to material non-disclosure.

Material non-disclosure means things that are relevant or pertinent to the claim. For example, if you have a skin cancer diagnosis but didn’t disclose your knee surgery that shouldn’t be an issue, however if you had previously had cancerous moles removed and didn’t disclose that, it is going to compromise your ability to make a successful claim.

When it comes to making a claim, it doesn’t matter whether the non-disclosure is accidental or deliberate, the claim could be denied.

If you feel tempted to hold something back because you are worried you won’t be covered, you should know that you could still get comprehensive cover, with some minor exclusions for pre-existing conditions. And for some conditions, after a symptom free period you can be covered. Working with an adviser and being honest with them about your concerns and history, means you will know where you stand, and be able to make informed choices about your cover.

Keep policies up to date

One of our Plus4 values is that we will recommend the best policy, but sometimes when we take on new clients and review their current insurance we find they have policies that are out of date, below current industry standards, or not from a provider we would use or recommend.

In these circumstances we would work to recommend a better policy to the client. We make sure the policies we recommend are at the top of industry standards for wordings, and make sure it still matches your current situation.

A potential concern with changing policies is the loss of any pre-existing conditions that were covered, however if we recommend a change there will be good reason to do so. When going through this process we are careful to not lose cover, by applying for the new policy before changing or cancelling the current policy. This provides continuation of cover, and also means that if the provider comes back with exclusions we can work with the client to weigh up their choices.

In addition to making sure our clients have the best cover, we want them to be informed and empowered when making decisions for their insurance.

Understand what you are covered for

Making sure your expectations are aligned with the ins and outs of your cover means you will know when you can make a legitimate claim.

One of the interesting contributors to the statistics on denied claims is a lack of understanding of what different types of insurance cover and claims being made that the policy doesn’t actually cover.

For example, if you have income protection and cannot work because of a health condition your income protection should cover you. However if your child has a severely broken leg and you cannot work because you need to care for them, unfortunately you cannot claim on your income protection.

Depending on your policy however, if you have trauma cover and your child becomes unwell with one of the listed conditions (such as cancer) you may be eligible for a lump sum pay out. When you are choosing your insurance policies, talking through different scenarios with your adviser to understand which policies come into play under which circumstances will help you make informed decisions.

If something happens and you want to find out if you can make a claim, get in touch with your adviser and they will help you understand which policy you should be claiming under will guide you through the claims process.

Work with an adviser

The absolute best way to get your insurance claim paid is to work with an adviser from the very beginning. Our job is to put you in the best claimable position at any given point.

  • Choosing a policy: We work with our clients to get the right policy for their needs and we know the ins and outs of every policy we sell. This may mean choosing a different policy for each spouse, depending on their personal and family medical history, lifestyle and industry.
  • Reputable providers: We are selective about the providers we work with, based on their financial strength rating, product rating and claims rating.
  • Disclosure: Our advisers are expected to go through the disclosure forms with you and be on hand to answer any queries that arise through the process. This is an important part of the applying for insurance, as we want our clients to be able to claim when they need to.
  • Claim process: Supporting our clients through the claims process is an important part of our role. Check out our blog post on how to make a claim to find out more.

A final note

If insurance companies regularly tried to get out of paying legitimate claims, stories like these would not be newsworthy. Insurance claim statistics are high, what drives them down is unsuccessful, non-legitimate claims.

However, New Zealanders are underinsured*, and we believe these sensationalised stories in the media, given without the full background information, are irresponsible because they discourage people from getting insurance.

Getting your insurance cover in place by working with an adviser, and maintaining an ongoing relationship with them, is a critical step in having good cover and making successful insurance claims. If you don’t have an adviser get in touch with one of ours today. If you have an adviser and would like to change to one of ours, you won’t to have to change your policies, though if we think you could have better cover, we will let you know.

*New Zealand has one of the lowest penetration rates of life insurance in the developed world (Massey University and Financial Services Council – Exploring under-insurance in New Zealand) and approximately 30 per cent of Kiwi households have life insurance cover. (NZIER – Resetting life insurance)

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Is the insurance industry bad news? Plus4 responds

It has been an interesting week for the insurance industry with the release of the Life Insurer Conduct and Culture report by the Financial Markets Authority New Zealand and the Reserve Bank of New Zealand.

The report feeds back to the market both positive and negative findings. We welcome this report and are glad that it brings greater transparency to the industry. While we recognise that the insurance sector isn’t perfect and there is progress yet to be made, we believe the media coverage of this report has been largely (and unfortunately typically) one-sided. The media coverage about the report paints an unbalanced picture of the industry we are passionate about and proud of.

At Plus4 we absolutely believe that poor conduct in the industry should be called out, and that there is a small minority of bad players that tarnish the good work of our advisors and the majority of our peers. New Zealand already has an under-insurance problem and uncertainty from consumers about why obtaining the correct insurance is important, and we have concerns about the damage that irresponsible media reporting on this report could do.

We would like to take this opportunity to answer some of the coverage of the report, reassure our clients that they are in safe hands with Plus4, and outline some ways in which all consumers can make good decisions when buying insurance.

The difference between advisers and providers

The report was tasked with looking at the conduct and culture of the insurance industry, in particular that of life insurance providers.

It is important to understand that while advisers work closely with a range of different providers and sell their products, we are not insurance providers. There is an important distinction between the two.

Insurance providers sell to consumers in three different ways:

  1. There are those that only sell directly to consumers (often through call centres or over the internet) without meeting with clients. This includes banks that sell insurance. The challenge for consumers buying insurance directly is that it is very hard to compare the wording in different policies to know if you are getting value for money and what exactly you are covered for. There is also little if any ongoing support and contact.
  2. Then, there are providers that do both – they sell directly to consumers, but also sell their products through advisers.
  3. Lastly, there are providers that sell only through advisers.

The report reviewed 16 life insurance providers in New Zealand, including some that sell directly to consumers, others that sell through advisers, and those that do both.

Insurance advisers, like Plus4, work with many different providers to find the best product for you and our other clients. At Plus4, we even use independent research to make sure the providers and products we work with are the best available. Providers (including banks) that sell directly to consumers are able to avoid this level of scrutiny.

Commissions and incentives

One of the points of concern raised in the report and amplified by the media was around commissions (paid to advisers when they sell a provider’s product), incentives and rewards. Insurance is a sales-based industry and as such has historically been incentivised.

In particular, the report was concerned about advisers being financially motivated to choose a product for a client based on the commission or incentive they could receive, not on the merits of the product, and whether these commissions were disclosed to clients.

It’s important to note that:

  • Commissions are paid for by the insurance provider, not you as the consumer. These commissions ensure we can continue to supply you with high-quality insurance advice without having to charge large fees to cover the extensive time involved. This helps keep quality insurance advice in NZ easily accessible and affordable for consumers to engage in.
  • Our advisers disclose any commissions in the disclosure documents we provide you. This isn’t required by law yet, but at Plus4 we believe that this level of transparency is important.
  • When we recommend a product to you, we write a report outlining why we have chosen that policy. We must justify why this is the best product for your unique circumstances, and that has to have a basis in the technical wording of a product. This process means our advisers will naturally recommend different products to different clients, depending on their specific needs.
  • All the insurance providers we work with provide very similar commissions and incentives – this means they are unlikely to influence our behaviour at all.
  • The commission we are paid by the insurance provider isn’t charged to you – if you were to buy the exact same product directly from the provider, or through our advisers, your premiums would be the same.
  • Commissions are paid up front, but this payment also helps pay for future service, such as regular reviews, claims assistance, administrational updates and so on for years into the future– at no cost to the consumer. This is our service commitment to you.

We believe all New Zealanders should be able to seek high quality advice on insurance – it is an important purchase and getting it wrong can cost you when you need it most.

We also believe that insurance advisers deserve to make a living, like anyone else. Individual advisers take on significant financial risk with the advice they give, and are on call for their clients – we promise to be there and be available for our clients when they need us.

Beyond best practice

The law around disclosure can be loose, however there are industry best-practice standards that most of the industry follows. At Plus4 we have committed to a standard that is much higher than that required by law.

Our partners are held to that standard and any adviser that breaches our standards would be asked to leave the group.

How can consumers feel safe when buying insurance?

It is only natural that when a report like this comes out, or the insurance industry get bad press, that people wonder how to protect themselves. Insurance can be a significant expense, and isn’t something anyone enjoys buying. Here are some ideas on making sure you get the most out of it.

  • Don’t buy direct: We strongly recommend buying insurance though an adviser, not directly from the provider. Non-aligned advisers (advisers who are not connected to an insurance provider) should be comparing a range of policies across providers to find the one that best suits your needs. If a provider doesn’t sell through an adviser, you should ask yourself why.
  • Cheaper isn’t better: If you are saving money buying directly because it is cheaper, it may cost you significantly down the line, through non-standard clauses, poor wording, poor payment history or a lack of ongoing support.
  • What you need to know about advisers: Not all advisers are equal so do some basic research first. Key things to look out for include:
    • Do they belong to a group? If your adviser belongs to a group it is likely there are standards above those required by law that they must adhere to, and there is a higher level of oversight that they are meeting those standards.
    • What is the process they use to choose policies? They should follow a robust process (which they can explain to you clearly), and be able to substantiate and justify why they recommend a certain provider or cover.
    • Do they encourage regular reviews? Regularly reviewing your policies is a critical part of saving you money, making sure your chosen policies continue to meet your needs as your life changes, and making sure you have claimed on any claimable events.

If your adviser follows these steps you can rest assured, you have a good adviser.

If you want to talk to any of our Plus4 team, want to make sure your insurance is up to date, or have concerns about your current insurance, please call us.

FMA RBNZ LIfe Insurer Report

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How well does your medical insurance cover cancer?

Cancer is a scary diagnosis and it is important to have an accurate understanding of the role health insurance can play in access to different treatments.

The cost of cancer treatment can be high, and not all the medications that are available are currently funded by Pharmac, New Zealand’s Pharmaceutical Management Agency. That means people can be left to pay privately for the medicines that may give them their best chance.

You may have seen, or even contributed to, private campaigns to raise money to help fund cancer treatments not covered by Pharmac. Some of these medicines can buy people a little more time, however others may make the difference in actually beating the cancer.

While we do have good access to cancer screening and treatment in New Zealand, and generally expect treatment to be covered by the public system, the media coverage these fundraising campaigns have received has made us more aware that this may not always be the case. Pharmac, is a government agency that decides which pharmaceuticals to publicly fund. The reality is that they are not going to be able to cover everything for everyone.

When reading these stories and contributing to private campaigns, those among us with medical cover probably feel quietly relieved that, should we find ourselves in this situation, we will not have to rely on donations from strangers to afford the medicine we need.

Unfortunately, it isn’t actually that simple.

Some medical insurance providers do cover cancer treatments that aren’t funded, however many don’t. Whether your insurer will or won’t provide this kind of cover will be in the fine print of your policy. If you are buying your insurance through an adviser, they will know which do and which don’t – here at Plus4 Group we only sell those that do.

Most policies have an upper policy limit of $200,000 per claim per year and will be covered if the treatment is recommended by a specialist.

There are a number of health Insurance policies that have low limits for non Pharmac medications and limits for chemotherapy and radiography. Your Plus4 adviser will be able to identify for you the policies that are available and what will best fit your circumstances.

There may be times that a policy with different limits will work best for you, such as your employer offering cover as part of your salary package. With Plus4 it is all about finding you the right covers.

It isn’t just medical cover that can help out with a cancer diagnosis; trauma cover can pay out a lump sum which can make a big difference with medical expenses and lost income.

As insurance advisers it is our job to know the ins and outs of every policy so we can help you get the very best cover, with no disappointing surprises at claim time. If you want to discuss your medical cover, or any other cover, get in touch with one of our advisers.

Does your health insurance cover cancer

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Income protection cover to the rescue

If Beverley Main could tell people one thing about insurance, it would be that even if the premiums feel expensive, it is worth it, because you never know what is around the corner.

Beverley has had a long relationship with Plus4, so when she got a new job with a salary raise and decided to take out income protection insurance, her Plus4 adviser helped her find the right policy.

However, after 15 years in a stressful job as Chief Executive, she found herself facing burnout, anxiety, and heart problems. Unable to work, she had to leave her job and come to terms with the realisation that she would never work again.

Beverley rang her adviser, Grant Uridge, to cancel her policy, as she no longer had an income to cover. To her surprise, he urged her to make a claim.

“It didn’t occur to me that I would be able to claim, but with Grant’s encouragement I went ahead, and it has honestly changed my life,” said Beverley.

Beverley had updated her policy as her income changed, and so had three income protection policies with Sovereign, and found her claim was covered by all of them.

When she left her job, she expected they would have to sell their home and downsize.  With her claim accepted she will be receiving the pay-out until she is 65, which has bought her five years to rearrange her life, and give her a quality of life she wasn’t expecting to have when she no longer had an income.

Beverley is enthusiastic about the help she received from Plus4. “I was very fragile when I called Grant to cancel the policy, and he was incredibly supportive. After what I had been through with my employer it was so nice to have someone who was on my side. He didn’t make any promises that my claim would be covered, but encouraged me to make the claim and see what would happen,” said Beverley.

She also speaks highly of Sovereign. “I had some preconceived ideas about insurance companies so I was blown away by the treatment I received from Sovereign,” said Beverley. “I expected everything to be a battle, but it was the complete opposite, they were so supportive and took away the stress.”

In order to have her claim covered, Beverley needed an assessment from a psychiatrist. Sovereign flew her and her husband to Auckland for the assessment. They also offered her three months of counselling and three months with a Pilates personal trainer. “They wanted to give me my best chance to get back into the workforce, however there was no pressure to do so if I wasn’t able. I felt so looked after, and I felt that they gave me my dignity back,” she said.

Beverley’s policies had included a premium waiver, which means that she doesn’t need to pay the premium on the policy while she is receiving the pay-out. “I had considered cancelling this two years before, but had been advised against it, and I am so glad I listened,” she enthused.

Beverley also recommends that people review their insurance regularly. “Because I reviewed my insurance every few years, and increased the cover accordingly, I am getting paid almost as much as I was earning. I think it is important to have more than just the bare minimum of cover,” she says.

If you want to make sure you have the right income protection for your needs, contact one of our advisers today.

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Do you know about our Claims Advocacy Team?

When you get your life insurance, trauma cover, income protection insurance or health insurance though a Plus4 adviser, you automatically have access to the Plus4 Claims Advocacy Team. This is a great benefit, let us explain why.

If we believe a claim has been unjustly denied, this team will get together and take a closer look at the wording of the policy, the circumstances of the claim and appeal to the insurance provider on your behalf.

While this isn’t a legal service, it provides another layer of accountability to the insurance providers, and is a good first step before escalating a claim dispute to the ombudsman (the Insurance and Financial Services Ombudsman Scheme resolves complaints about insurance and financial services.)

Our Claims Advocacy team are rarely assembled, as we find our customers seldom have claims denied. There are a few reasons for this:

  • Insurance providers pay out
    It might sound a bit simple, but it is true. If everything in your application is in order, and the event is covered in your policy, insurance providers pay 100% of all legitimate claims.
  • Our customers have bought their policies through an adviser
    A simple way to increase your chances of having a claim covered is by buying insurance through an adviser – just like Plus4. We read the fine print, so we always confirm that what you are buying covers your circumstances. This means you are unlikely to have a nasty surprise at claim time.
  • Our customers didn’t buy their policies through a bank
    If you have bought your insurance through an adviser, it means you didn’t buy it through a bank. We have written before about our reservations regarding buying insurance from banks, including non-industry standard exclusions, which can lead to claims being denied when they may have been otherwise covered.
  • The importance of full disclosure
    On the rare occasions claims are denied, it is usually the result of a lack of disclosure. When we help clients choose a policy, we also guide them through the paperwork for the application. The paperwork can seem like a hassle at the time, but the effort pays off when it comes to making a claim.

If you want to know more about our Claims Advocacy Team, or talk about making sure you are covered come claim time, get in touch with one of our advisers.

Plus4 Claims Advocacy team

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How does your mortgage influence your insurance choices?

Getting adequate insurance cover is an important part of the getting-a-mortgage process – and one the bank wants taken care of before things go further. This includes life insurance, trauma insurance, income insurance and, of course, mortgage insurance.

Often when insurance advisers discuss personal insurance needs with a client we use their mortgage as a starting point – which of course is not to say it is the only factor to be taken into consideration. But your mortgage does influence the types of insurance you choose, and how much insurance cover you need to have.

Here is a break down of the different personal insurance types and how they relate to your mortgage.

Life insurance

The size of your mortgage is a really good place to start when deciding how much life insurance cover to get. Knowing that, should something happen, those left behind do not have to worry about mortgage payments and losing their home provides significant peace-of-mind.

From there you need to think about your lifestyle, any debts that need to be covered and how long the beneficiary needs to be able to live on the insurance.

Income insurance and mortgage protection

There is a perception that income protection is expensive, but you don’t actually need to cover your entire income. We have written before that your greatest asset is your ability to earn an income and recommend you read that blog to grasp the importance of income protection, but in relation to your mortgage you should also think about mortgage protection.

You cannot claim income protection and ACC at the same time – this is because the Insurance Act states that you cannot be better off on insurance than you would be if you were working.

However, mortgage protection is a subset of income protection designed to cover your mortgage repayments should you be unable to work. Importantly it has no offset clause – this means if you are unable to work you will receive your mortgage cover payments, regardless of whether you are also covered by ACC or by your income protection.

When you set up a mortgage protection plan you can choose how quickly you want the cover to start, such as four weeks, eight weeks or twelve weeks, and how long you want the cover to continue – anything from three months to the end of the cover term.

It is important to note that more providers are now offering rental cover as well which works along the same lines as mortgage cover.

Trauma Cover

Trauma cover can also be used to cover your mortgage payments. The key advantage of trauma cover is that it is a once off pay out for a traumatic medical event (read more on our blog post here about how it works) and you can use it how you best see fit.

The main point to remember is that everyone’ s circumstances are different, and sitting down with a adviser and talking about your mortgage and lifestyle will help them come up with the package to best suit your personal needs. So call one of our advisers today to discuss getting the best insurance cover for your mortgage.

relationship-between-insurance-and-mortgage

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Is that short term incentive really best for your long term insurance plan?

We are all keen for a bargain when we can get one, and getting personal insurance cover is no different.  But the reality is that jumping on board with a policy because of a special offer is rarely a good move in the long term, and as we have discussed before personal insurance, be it income protection, life insurance or health insurance, is a long term game.

The famous Stanford marshmallow experiment of the 1960s looked at delayed gratification. A child was offered a choice between one small reward provided immediately or two small rewards if they waited for a short period. One third of the children were able to delay long enough to get their reward.

While we would like to think that we are all smarter than a child offered a marshmallow, one of our brokers recently confessed to refinancing their mortgage because they wanted the TV that was on offer. The immediate, tangible reward or saving right in front of us is hard to ignore for savings further down the road.

There are issues we come across again and again where people have chased the bargain and set themselves up for higher premiums or less thorough cover when they need it. While some of it we have said before, it is important enough that it bears repeating.

Beware the banks

We have heard of banks offering a discount on a mortgage rate if the mortgagee takes out their home, contents and personal insurance with the bank. At a time when you are looking at committing to a mortgage that is a fairly compelling offer.

But is it worth it?

Banks in particular have a less than stellar record with insurance. ANZ for example has a 36 month exclusion for suicide*, which is three times longer than the industry standard of 12 months, and an unlawful acts exclusion which is not an industry standard.

Insurance policies sold through banks also tend to cost you more in premiums than policies bought through a broker.

Watch out online

Buying insurance online can be appealing because it can be faster and seem more straightforward than visiting an insurance broker, and there are often promotions that look good. However the cover provided by online insurance companies rarely stacks up to that offered by brokers and the premiums are often higher. If you sign up during a special offer they can increase dramatically after a set period.

When you get a quote on personal insurance from a broker you will get a ten year projection on the premiums, so you have a good idea of what you are getting yourself into.

Ideally you should be changing policies as little as possible, as anytime you have to reapply you may have exclusions added as the result of changes in your health or lifestyle, which means you shouldn’t just jump from special offer to special offer.

The devil is in the details

While all the ins and outs of a policy are right there in the fine print, even if you read it do you know how it compares to other policies? We do. When you get a quote from us we know what is in the fine print of each of the policies we recommend for you, and can talk you through how these can impact you.

If something sounds too good to be true, or appears dramatically cheaper than other options there is usually a reason for that. If you feel you are being pressured into buying insurance from the bank take the time to talk to a broker about your other options. While you will end up with better quality of coverage through a broker you may find by looking at the ten year projections you save more than you would have through a lower mortgage rate anyway. Remember, there is a fine line between financial coercion and a financial incentive, one of which is illegal.

If you want to talk to someone, who has read all the fine print, about getting the best personal insurance cover for your circumstances, call one of our brokers today.

* As stated in “ANZ Life & Living Insurance Policy Document, 13 September 2015”

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Should you get health cover for your children?

With GP visits free to children under 13, getting medical cover for your healthy, active children may seem unnecessary.

There are a number of reasons we think it is worth considering.

In our previous blog on health insurance (you can read it here) we described health insurance as doing something your future self will thank you for. The same concept stands for insuring your children – you are setting them up for later in life, in a time when our public health system may look very different to what it does today.

Protection against pre-existing conditions

One of the problems adults find when they go to get health insurance is the limits placed on them by pre-existing conditions. A pre-existing condition is a health problem that exists before you apply for a policy – insurance companies are businesses and as such they are concerned about their bottom line. This means if you have a pre-existing condition they are likely to exclude cover for that condition, charge a higher premium or impose a waiting period before that condition is covered.

If you insure your children while they are young, fit and healthy, and they keep the policy when they reach 18 or 21 (depending on the insurer), they will not have any pre-existing conditions as the cover is already in place. This includes big stuff such as cancer or heart problems, but also smaller things such as allergies or asthma.

Pre-existing vs Congenital: An important distinction to be aware of

It is important to understand the distinction between pre-existing conditions and congenital conditions as most insurance policies do not cover congenital conditions.

A congenital condition is something that you are born with, whereas a pre-existing condition is something that you have developed since birth. For example, a tongue-tie correction needed on a baby will generally not be covered, as that is something they were born with. A child that needs grommets inserted (one of the most common procedures for children, which helps prevent persistent ear infections but often has long waiting lists) can be covered.

Access to healthcare, no matter how public funding changes

With New Zealand’s aging demographics the way we are able to access public healthcare may well change in the future. The government currently spends 20% of its budget on healthcare and we have 10 workers (i.e. paying tax to fund the government budget) for every old age dependent, however in the next 20 years that number is going to shift to four workers for every old age dependent. That future healthcare burden raises some questions around the sustainability of our public system.

While we don’t know exactly what the future looks like, it is likely that private medical insurance will play more of a role in getting the healthcare you need when you need it.

Want to talk to someone about insurance for your family?

If you need some help weighing up the pros and cons of having medical insurance for your children, get in touch with one of our brokers today. They can talk you through some of the ins and outs of the policies available and help you find one that best suits your family’s needs.

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