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When life changes, make sure your insurance does too!

Change is the only constant in life, and as we move through life events and milestones we adjust and keep moving forward. But have you given any thought as to how changes in your life impact your insurance covers, and when you need to make changes?

At Plus4 it is important to us that you have the right insurance at the right level for each life stage – this includes making sure you are not over insured or paying for cover you won’t be able to use. To this end, we send out a letter every year to touch base with our clients to make sure their cover is still meeting their needs, but you don’t need to wait for the reminder.

What life changes should trigger an insurance review?

These are the changes we see most commonly; however it isn’t an exhaustive list – which is why it is always key to speak with your adviser to discuss if a recent change is a reason to adjust your type or level of cover.

Mortgage

Have you increased or decreased your mortgage? Your mortgage is often a starting point for deciding how much life or income cover you need, so if you have dramatically reduced your mortgage or had an increase it is time for a review with your adviser.

Relationship change

If you have a new relationship, or have ended a relationship, there are a number of ways this can impact your insurance covers. For example – who owns your life policy? Is the person that will be receiving the pay out still appropriate?

Increase or decrease in dependents

If your teenager has left home, a new baby has arrived or a dependent parent has moved in these are all worth discussing with your adviser, to review whether your cover should be increased, reduced or structured differently.

Employment

If you move into a dramatically different occupation it is worth touching base with your adviser to see how this may impact your covers and premiums. Likewise if you become self-employed, or become an employee after self-employment the types of policies you have and the way they are structured are going to need a review.

A change in income

If you have income protection, your premiums and pay out are based on your income, so a significant change means a discussion with your adviser is essential to make sure you aren’t disappointed should you need to claim.

A reduction in income may also mean you are struggling to pay the premiums and it can be tempting to cancel policies. Taking the time to discuss this with your adviser means you can work to find a solution so you can still have some cover in place.

Special events increase

Making changes to keep your cover up to date doesn’t need to be arduous. Most life insurance policies have a built-in ‘special events’ increase which means you can increase your existing cover, without further medical underwriting. The specifics vary between providers which is why it is important to discuss with your adviser, and discuss your future plans when you first get your cover in place.

Some providers also give you the opportunity to increase your cover on certain policy anniversaries or allow you to purchase a future insurability option, which allows further increases to cover each year without further assessment (up to certain limits).

Need to discuss whether your cover is still best meeting your needs? Call one of our advisers today.

When should you change your insurance

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6 Insurance Myths – Busted!

Like any industry, there are some persistent myths and misunderstandings around insurance. We are absolutely passionate about what we offer as advisers, and the products that we select for our clients, so we’d like to clear up some common misconceptions.

Myth # 1: Insurance firms don’t pay out

The idea that insurance firms are trying to get out of paying claims is the biggest, baddest myth of them all. It seems to stick around, despite overwhelming evidence to the contrary.

Insurance firms do pay out, and the insurance providers we work with will pay 100% of legitimate claims.

If this is the case then, why do providers not pay out on all claims? Why is there a percentage that are rejected? The key word is legitimate – insurance providers must record all claims made and some will not be covered. The main examples are people trying to claim something that their policy doesn’t cover – either deliberately or through misunderstanding.

We are also guilty of contributing to these statistics. If you are unable to work and have income protection, we may advise you to start processing your claim before the stand-down dictated in your policy. However by the time that stand down has passed, it may have turned out that you are actually ready to return to work. That’s no problem for anyone involved, but statistically this will be categorised as a ‘declined’ claim.

These days there are multiple protections in place for consumers, and insurance is a very transparent industry. One of our insurance providers, Partners Life, even say “If it is grey, we will pay”. We often have the insurance providers give us tips on how to progress a claim so that it will be paid.

Myth # 2: I can’t afford insurance

When finances are tight it can feel like insurance is just another expense. However, what you really need to consider is if you can afford to not have insurance. Ask yourself, if you lost your ability to earn an income, how quickly would you be in trouble? How long would you be able to pay your mortgage?

One of the key advantages of using an insurance adviser is that we can work with you, and your budget, to get you the cover you need the most. Check out our blog here on which insurance you really need.

Myth # 3: If you don’t have an income you don’t need insurance

A common scenario we see is the main income earner has income protection and a non-earning spouse does not. While society sadly undervalues unpaid work, it contributes enormously to a household in different ways. The very real financial ramifications of a non-working spouse being taken out of action is something that should be considered.

Check out our blog, Are you both insured? Here is why you should be, for a breakdown of the whys and hows of insuring a non-income earning spouse.

Myth # 4: I am too healthy to need health insurance

Health insurance can seem unnecessary when you are young, fit, healthy and in the prime of your life.

We have two words for you: Pre-existing conditions. When you take out a new policy the provider will generally not cover you for something you already have. This could be conditions like skin cancers, a heart problem or diabetes. If you take out health insurance when you are in the best shape of your life your premiums will be relatively low. But, more importantly, when things do start to deteriorate you will be covered for them.

Myth # 5: You don’t need health insurance in New Zealand

This can be a tricky topic, and we are really lucky to have the healthcare system that we do in New Zealand.

However, we still believe you are better off with health insurance. The changing nature of our demographics indicates a significant future strain on our public health service. We’ve written more about it here. And, as we mentioned in Myth 4, covering yourself before you have problems sets you up for better coverage in the long term.

Myth # 6: It is easier to have insurance with my bank

All insurance is not created equal, and we are very cautious of policies offered by (and, at times, pushed by) banks. The policies offered by banks often fall short of the standards we expect from the providers we recommend to our clients. This includes non-standard exclusions in the fine print, a lack of transparency, a rushed application and disclosure process, and the sub-standard definitions of covered conditions, making them harder to claim on.

We have written here about the pitfalls of buying insurance based on short term incentives.

As insurance advisers we want the best for our clients, and we know insurance inside and out. If there is any aspect of personal insurance that you have questions about, get in touch with our advisers today.

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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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What is Key Person Insurance?

If you are a small business owner, you need to think about Key Person Insurance. In fact, it may well be a better and more useful insurance option for you than income protection insurance.

Key Person Insurance is ideal for small businesses who have one or two staff who are key revenue generators, or whose work is vital to fulfilling contracts and keeping the business running.

Their absence, whether by serious illness or injury, could have a devastating impact on a company’s financial wellbeing. Key Person Insurance ensures you are well protected, should this situation occur.

While income insurance is vital for those in paid employment, if you are a business owner, key person insurance may well be a better option.

 

How is Key Person Insurance different to Income Protection?

Key Person Insurance, also known as locum replacement cover, pays the sum insured to the business to cover the cost of a replacement staff member, while income protection insurance is designed to cover your personal income.

Key Person Insurance is an agreed value, whereas income protection has an offset clause – meaning if you claim ACC, you cannot also claim income insurance.

With some income insurance policies, you also need to prove your current income to the insurer at claim time. This can be a challenge for business owners and those self-employed who, on paper, can appear to have a relatively low income. Key Person Insurance pays an agreed value.

 

When is Key Person Insurance a better option?  

To decide if Key Person Insurance could be appropriate for you, you must identify the vulnerabilities in your business.

Imagine you are suddenly unable to work because of an illness. You need to take four months off running your company to recover. Will your business survive without you and still be there when you are ready to get back to work?

  • If the answer is yes, then income insurance protection is likely to be the most appropriate insurance option
  • However, if the answer is no, then Key Person Insurance may be more suitable

Key Person Insurance would allow you to hire someone to replace you while you are incapacitated. This means your business would be kept running, and you, as the business owner, will still have an income.

 

Who should be identified as a Key Person?

Key people tend to be business owners, specialists, or personnel responsible for critical customer relationships. A business can take out Key Person Insurance on any employee they consider to be a key person, within certain parameters.

ACC has a table showing replacement cost for a wide range of professionals, updated yearly, here. This can be a good tool to use to make a case to an insurer for the level of coverage you need for a key person.

 

Talk to the experts to find out the best option for your business

Deciding which insurance cover to get can be complex, and if you are paying fixed premiums you need to know exactly what you are getting at claim time. The best way to take care of this is to talk to a professional adviser. We can work through different scenarios and we know the products available inside and out, and can work with you to get the best cover. Call one of our advisers today.

Key person insurance

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Why you need a will, and how to write one

Everyone knows that having a will is really important, but it can seem overwhelming and hard to start the process of creating it.

Like having life insurance, health insurance and trauma insurance, the benefits of a will are easy to appreciate. It is all about looking after the people we care about should something happen to us. It also makes things easier by ensuring both your assets and any taonga are allocated as you wish, and without any unnecessary delay.

How to write a will

If you don’t have a will we strongly recommend getting one in place as soon as you can. There are a number of ways you can go about this.

  • Visit a lawyer
    Most lawyers create wills for their clients but, as they are charging by the hour, this can be an expensive process.
  • Trusts
    Many trusts, like Public Trust, will offer to help you write your will for free. This can be a great service, as they do they really know their stuff. But, be aware that they can come with a heavy administration fee – so make sure you know all the details first.
  • Do-it-yourself
    There are a number of DIY options, from booklet style kits to online templates. If your will is likely to be straightforward, one easy and legally sound option is the online tool My Bucket List, developed by New Zealand lawyer Mai Chen.

At Plus4 Insurance Solutions, we provide our clients with a template they can use to help them identify what they want their will to include. There are two good reasons to use this template. Firstly, you can go over it in detail in the privacy of your own home and hash out the details. Secondly, once you have done that you can then take it to a lawyer. As you have already done most of the decision making, it will save you time (and therefore money) on legal fees.

What you should consider

Before you write your will, there are a few issues to understand and consider. While it can be unpleasant to deeply consider the consequences of our own passing, it is important to remember that your will is not for you, but for the people you love.

  • Beneficiaries. There are two types of beneficiaries – primary and contingent. The primary beneficiary is your first choice to inherit your estate, such as your spouse. The contingent beneficiary is the next option, if the primary beneficiary has died or cannot be located, such as your children or a sibling.
  • Bequests. A bequest is a gift given in a will. This could be a sum of money donated to a favourite charity, or to a person who is not a beneficiary of the will. It could also be an item, such as jewellery or heirlooms, you wish to be given to a specific person.
  • Guardianship. Deciding who gets your grandmother’s piano is far easier than choosing who will care for your children in your absence. You can appoint someone in your will to take over guardianship, if your children are under 18 years of age. This person is a testamentary guardian. It is important to note their role doesn’t include the day-to-day care of the child, or children, but they can make major decisions about how they are brought up, and by who.
  • Financial planning. If you are responsible enough to be making a will, we hope you also have life insurance in place. In setting up your insurance you need to consider various scenarios and where this money would end up. For example, if you have given someone guardianship of your children – how will you fund that?

If you want to discuss your life insurance, or would like a copy of our will template, contact one of our advisers today.

Why you should have a will

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7 steps to getting the best insurance cover

Want to get the best insurance cover for you and your family? Here is how you do it:

Using an adviser is always going to get you the best life insurance, income protection and health insurance to suit your budget, lifestyle and life stage. However, some people can be put off by thinking it is a service they pay for, or just not understanding how it works.

The first thing to note is that you don’t pay us for our services. We don’t want getting the best cover to cost our clients so we don’t charge you. Instead, we are paid by the insurers.

Here is our process to break it down for you.

  1. Find an adviser

We get most of our clients through word of mouth. Finding someone who is local makes it easier for you – it is good to be able to meet in person. We have advisers all over New Zealand, check here and find an adviser near you.

  1. The first meeting – Relationship Building

This usually takes under an hour and is a “Getting to know you” session. We want to have a really good understanding of your situation to ensure we can give you the best advice. This includes your budget, your lifestyle and what you want to happen should a crisis arise.

This initial meeting can take place at our offices, at your workplace, or we can come to your home – we’re even happy to come by in the evening after you have put the children to bed!

  1. The Research Phase

After the initial meeting, we have a good idea of what you are after, and we go into research mode.

This means we look at the offerings of a range of different providers, to find the one that best suits your and your circumstances. The independent research we carry out is a key way that we add value to our clients. We then drill down into the fine print to make sure it all stacks up and that we can substantiate our recommendations to you.

  1. The second meeting – Presenting the Plan

We get back with the client and present the plan we have put together.

We need to allow at least an hour for this meeting (and again we can meet wherever suits you best), as we present the plan and then go through the application process. The time it takes to fill out the application can vary – for example, if you have any health issues that need to be considered.

We also fill out payment forms at this meeting, so everything is ready to go once your application is approved.

  1. Approval

If everything is clear-cut, we hear back from the provider and give you a call to say it is all ready to go. Sometimes, as a result of the information provided in the application, the provider may come back with questions or variations to the policy. This is something that your adviser will talk you through.

  1. Claim time

While we all take out insurance hoping to never use it, at some stage you may need to make a claim. We have written a blog on what happens at claim time (you can read it here), but what you really need to know is that if you have your insurance through an adviser, when it comes time to make a claim we will be there to support you, walk you through it and advocate for you.

  1. Follow up

So, we have set up the best policy for your current circumstances, allowing you to get on with life knowing you are covered. However, life changes. To make sure your policies keep up with your life, we check in with you to find out if anything has changed and make sure you still have the best policies to meet your needs. (Here are some of the life changes that might lead to policy changes).

Are you ready to get the best insurance cover? Or do you have questions about how it works? Give one of our advisers a call today.

how-an-adviser-works-with-you

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Welcome changes to the Financial Advisers Act

In a recent press release our Group General Manager, Peter Standish welcomed the planned changes to the Financial Advisers Act (FAA) announced recently (13 July 2016) by the Commerce and Consumer Affairs Minister Paul Goldsmith.

Plus4 Group General Manager Peter Standish said, “The proposed changes are a step in the right direction and we look forward to seeing the detail of the new regulatory regime when the bill is introduced to Parliament later this year.

“Replacing the confusing adviser designations (AFA & RFA), introducing the requirement that advisers put their client’s interests first and provide advice only where they are competent to do so are particularly welcome.”

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Under the proposed changes, the current adviser designations will be replaced with those providing financial advice being known as either a ‘financial adviser’ or an ‘agent’. The changes also herald a universal consumer-first obligation on all those providing advice to put the interests of the consumer first.

“Currently only some advisers have this obligation and these proposed changes are entirely consistent with Plus4’s embedded position around putting the client first. We consider that if you’re an adviser as opposed to a ‘salesperson’ you have a fiduciary responsibility to ensure that the advice you give puts your client’s interests ahead of their own.

“The advice driven process adopted by Plus4, as opposed to a sales and product driven process, means we are very well placed to implement the impending changes as does our ethos of using independent research to choose the ‘best-of-the-best’ when recommending product applications to mitigate personal financial risk with clients. This ethos is also entirely consistent with the recommendations in the paper,” Peter Standish said.

Established in 2008 in Nelson, Plus4 Group members work predominantly with small to medium sized enterprises, their owners, and their accountants.  The group, which has 56 advisers across New Zealand, has no affiliation with any specific provider and uses independent research to identify solutions that best meet their individual and business clients requirements.

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