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Keeping your insurance cover in financially unsettled times

Many New Zealanders are suddenly finding themselves worried about their finances and in these uncertain times cutting costs can make a lot of sense. While it is not a good time to cancel insurance, there are some things you can do to help manage the costs.

Why you should keep the policies you have

With so much uncertainty out there, insurance is one of the only certain things we hold, and this becomes an even more valuable asset in times like these.

Some insurance providers are also responding to this unprecedented crisis with changes to what is covered in some policies – which means the terms of any insurance policies you already have in place may be the best you will ever have. If you cancel policies now and intend to replace them at a later date, you may also find yourself with exclusions you don’t currently have. If you, or a family member, were to have a new health problem this could impact your ability to get coverage.

How you can reduce your insurance premiums

There are a number of mechanisms that you can use to adjust your premiums, and there are pros and cons to each. The best solution for you will depend on a number of factors, including your age, your financial situation and life stage. That is why we always recommend talking with your adviser, as they can work with you to find the best solution to suit your needs.

Premium Holiday

Some insurance providers allow you to take a premium holiday. This means that if you can show you are experiencing financial hardship, they may waive your premium for a period of time, during which time you are still able to make a claim.

It is important to note that this can only be done once in the lifetime of your policy. 

Premium Suspension

A premium suspension gives a break from premiums for up to 12 months. During this time you cannot make a claim, but you can pick your policy up again with the same terms at the end of that period. As with the premium holiday, you can only do this once in the lifetime of your policy.

Some providers have added on criteria specific to COVID-19, with a 20% loss of income sufficient to prove financial hardship.

Reduce sum insured

Reducing the sum insured will also reduce the premiums you need to pay.

This can be a good mechanism to use if you are younger, as there are built in special event increases in lots of policies that allow you to increase your amount insured in the future without further underwriting. These include things such as a marriage or civil union, birth or adoption of a child, taking out or increasing a mortgage, a child starting full-time tertiary study, an increase in salary or purchasing property. Read more here.

Increase excess

Increasing the excess on some insurance policies is an easy way to reduce the premiums, but if times are hard you need to be realistic about what excess you can afford in the event of a claim. It is also important to find out if you will be able to reduce the excess again in the future.

Increase wait time

For policies, like income and mortgage protection, you can adjust the wait period before you start to receive a payout, which will impact your premiums.

How is Covid-19 covered?

Just because every loss, frustration and stressor of COVID-19 isn’t covered by insurance doesn’t mean nothing is. These are some of the ways you may be able to claim on policies.

  • Life cover: If you have life insurance there are no changes to what is covered – this means if life cover is already in place and the insured person dies from COVID-19, they are still covered
  • ICU benefit: Some people who contract COVID-19 may spend some time in intensive care. Most trauma policies include ICU cover, which is triggered after a certain number of days in intensive care, regardless of the cause
  • Chronic lung failure: Some long term health impacts of COVID-19 could be covered by trauma insurance
  • Income protection: If you became unwell and were off work for an extended period this could be covered under your income and mortgage protection policies
  • Redundancy: Some income protection policies have redundancy cover

It should be reassuring to know from a claims perspective it is business as usual (even if everyone is working from home).

Before you cut and cancel, or assume something isn’t covered, talk to your adviser. We want to work with our clients to get them through this. We really are all in this together.

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Keeping you and your family safe over summer

When summer kicks off in New Zealand, so does the DIY and outdoor life that is an ingrained part of Kiwi culture.

Having the right levels of health insurance, income insurance and life insurance is an important part of caring for yourself and your family, but unlike a new bike or paddleboard they are a purchase you hope not to use. This means whatever your holiday plans, it is important to be aware of what you can do to keep you and your family safe.

Keeping children safe over summer

Keeping children safe is an obvious priority for parents all year round, but summer comes with unique hazards.

  • Who is watching the kids? When you have a large group of friends and family together it can be so easy to assume someone else is watching the children. The simple act of communicating “I’m popping inside now, so you are in charge of watching the children,” can literally be a lifesaver.
  • Driveways. All parents know that driveways are a major hazard for children. With summer guests, and groups of families and friends congregating at the bach there is a lot more coming and going. There can also be different people looking after the children (including some who may have forgotten just how fast a toddler can move), and time spent in different houses without the safe set-up and routines of home. If you are visiting a house with children, or someone is visiting you with theirs, make sure you know where everyone is before any car moves.
  • Water. Swimming in the pool, a lake, a river, or the sea is such an integral part of summer for kiwi kids, and going out on a boat is a real treat. Remember to supervise children at all times, know the nature of the water before you enter (how deep it is, how strong the current is and so on) and know your child’s limits. Watersafe has some great tips for any water activity.

Avoiding food poisoning

Summer brings warm, moist conditions – the ideal environment for pathogens to multiply quickly and cause food poisoning. This means you need to take special care when preparing, cooking, and storing food. Follow the clean, cook, cover and chill rules; and take extra care, especially when barbecuing.  

The Ministry for Primary Industries have some great tips for avoiding food poisoning.

Avoiding exercise injuries

Whether the panic of impending swimsuit season after a cosy winter of inactivity, or a New Year’s resolution to get fit, summer finds plenty of people leaping unprepared into a new exercise regimen.

While improving your fitness is a great idea for your long-term health, to avoid injury it pays to be sensible about how you start– this also increases your chances of meeting your goals.

  • If you have any pre-existing health conditions or injuries, you need to speak to your GP or physio before you start a new exercise programme
  • Start gradually; don’t try and make your first run in five years 10 kilometres. Starting slowly not only reduces your chance of injury, but increases the likelihood you’ll keep at it
  • Warm up. This is a key feature of staying injury free. ACC Sportsmart has some good warmups to get you started
  • To help you stay on track, make a programme, stick to it and mix it up with different exercises

Safe DIY

New Zealanders love to indulge in a bit of home improvement around the house or the bach during the summer holidays. And ACC hears a lot about it when things don’t go quite according to plan.

Before you crack into a new project check out ACC’s prevention tips here.

Safer Road trips

For lots of people summer means more time travelling on roads that are less familiar. Time with the in-laws isn’t the worst hazard of a summer road trip. AA has four key tips on their website for safe driving.

Most pertinent to summer road trips are minimising distractions, which means putting some thought into keeping kids entertained and fed, and being aware of your own tiredness. This takes planning; when you will travel, who will drive and when you will take breaks.

Share the load and be aware of when you are starting to struggle. There is no harm in stopping for an impromptu ice cream or brief walk on the beach, to wake yourself up and give your passengers a break too.

Remember to slip, slop, slap and wrap and have a wonderful – and safe – summer. If you want to make sure your insurance is up to date, or need to make a claim do get in touch.   

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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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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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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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Who owns your policy?

Getting life insurance in place involves a lot of decision making, and choices around the ownership structure of your insurance policies are as important as any other. Keeping the ownership up to date as your life changes is equally vital.

A good insurance adviser will explain that the structure of the cover is just as important as the cover itself – this is because wherever the ownership is placed is where any pay-out will go.

These are some of the issues around the ownership of both personal and business insurance covers that you need to be aware of.

Ownership of personal insurance policies

All polices can be jointly owned, and it is a good idea to make sure they are – for example, an income protection policy can be claimed by a spouse if the policy holder is incapacitated.

It is particularly important for life insurance policies. If you are in a relationship it makes sense that your spouse will be an owner on the policy – this means the policy will be paid out quickly and easily when it is needed.

If you are the sole owner of your life insurance policy this means the pay-out will go to your estate. If you don’t have a valid will it can take some time to be released. As insurance policies are considered relationship property under the Relationship Property Act, it could also be held in probate for up to six months.

The most common issues around policy ownership come into play when there is a relationship break up.

Firstly, if a former spouse or partner is an owner on the policy and the premium is still being paid, they will receive the pay-out. Secondly, if the policy is paid into the estate and it is held in probate, a former spouse or partner can make a claim on it as relationship property.

We had a client who found out his ex-wife was still paying the premiums on a policy on his life they were both the owners of. She was legally able to do this, and to receive the pay-out when he passed as it would go to the remaining policy owner.

The key is to keep your policies up to date and touch base with your adviser when you have any life changes, as they will know what needs to be done to make sure what you have in place still meets your needs.

Another issue to be aware of is insurance policies purchased through a bank. When you take out insurance with a bank, sometimes they own the policy, which means all the anniversary correspondence goes to them – which can make it hard for you to keep track of ownership, and if the policy is still relevant to your needs.

We recently carried out a review with a client who believed he had an income protection policy with a bank, but on closer inspection it was actually a debt protection policy. He was paying for a certain sum to be insured, however the wording of the policy was that “In the event of a claim we will pay you the lesser of the policy or the debt you owe us”. When we spoke with him he hadn’t owed this bank any money for six years – this policy was out of date and totally irrelevant to him, but he had been paying the premium the whole, time and would have received nothing.

Ownership of business insurance policies

There are some key issues around the ownership of business policies as well.

Where there are multiple shareholders in a business, those parties will often take out life policies for each other to the value of the shares. On the event of a shareholder’s death, their shares will pass to their estate, and the life insurance pay-out to the business will allow the remaining business owner to buy the shares back.

In theory, this works very well. In practice there are a few issues to be aware of, and systems you can put in place to prevent them.

While the shares pass to the estate, the directorship does not. This means there may be one director left, who is now solely in control of the company, and of course all its assets. And while the life insurance pay-out was intended for the company to buy back the deceased’s shares, if the premium has been paid by the company the sole remaining director is in control of that asset, and can quite literally ‘take the money and run.’ This can be true even if there is a shareholders agreement in place, because not all agreements deal with what is meant to happen to an insurance pay-out.

To mitigate this risk, the company needs to set up a ‘Buy/Sell Agreement’ and should set up an independent trustee to own the insurance on behalf of the business.

Keeping up to date

Families can fall out, and so can business partners. Who owns a policy and how it is structured are just as important as the cover itself.

Our Plus4 advisers have seen almost every scenario play out, so they have potential issues front of mind when they are helping you set up your policies. Having your insurance structured appropriately from the get-go is the easiest way to avoid issues.

It is also important that you see your adviser as part of your support network and get in touch whenever life changes. Doing so means you won’t end up paying for policies that you don’t need, or that won’t do what you want them to when you need them.

If you want to review your policies to make sure they are meeting your needs, get in touch with one of our knowledgeable and compassionate advisers.

Who owns your policy

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What is ACC Cover Plus? And ACC Cover Plus Extra?

In New Zealand we are lucky to have ACC, which provides us all with no-fault comprehensive injury cover no matter where you are when you are injured.

ACC covers most physical injuries if they are caused by an accident, a condition that comes on gradually because of your work, medical treatment or sexual assault or abuse. ACC provides a definition of a physical injury on their website here.

However, once you move into the self-employed space things can get a little trickier and that is where ACC Cover Plus and ACC Cover Plus Extra come in to play.

ACC Cover Plus

ACC Cover Plus is basically the self-employed version of ACC cover. The rate of cover provided, what is covered and the services available are all the same as ACC. What changes is how you pay your levy and how your cover for lost earnings is decided.

When you are an employee your ACC levy is automatically deducted from your income, however when you are self-employed you are invoiced each year by ACC according to your previous years income and your industry. This means your ACC invoice can vary from year to year depending on your income or if you change industries.

When you are an employee and you lose your income due to an injury there is a very clear line as to what that lost income would be – your wages or salary. Self-employed incomes can fluctuate dramatically from month to month or year to year and this can cause some challenges and uncertainty when trying to get covered by ACC.

New Zealanders are lucky to have access to ACC, and with ACC Cover Plus even as a self-employed person you are covered. However there are two areas that ACC Cover Plus can be challenging. The first is with the levy based on the previous financial year’s income there is uncertainty each year as to what it will be. Secondly the uncertainty around cover with a fluctuating income can leave self-employed people more vulnerable.

This is where ACC Cover Plus Extra comes in.

ACC Cover Plus Extra

With ACC Cover Plus Extra you agree with ACC on a level of cover for lost earnings, to suit your personal circumstances. This means if you make a claim there is no need to prove your earnings, as the weekly compensation has already been agreed. It also means you know what your ACC levy will be each year which makes financial planning smoother.

Moving on to ACC Cover Plus Extra puts you back in control of your premiums, puts you in control of what you get paid at claim time and gives you peace of mind regarding what you will get paid.

Is there a better way of managing risk for the self-employed?

ACC is an expensive type of cover when compared with private insurance. There are some gaps with regards to illness and degeneration, and moving onto ACC Cover Plus Extra is the first step to make things easier.

We then tailor your ACC cover so it is right for you. This may be by reducing the cover and taking on income protection and mortgage protection to top it up, or we could recommend you increase it.

There are three main benefits to taking this approach.

  1. ACC only covers accidents – taking this approach means you will also be covered in case of illness, and if ACC declines to cover your injury on the basis of degeneration.
  2. More cover for less – you can save money on premiums.
  3. Peace of mind – you know how much cover you have, and you know that you are covered regardless of the circumstances of your lost income.

We have had clients who have income protection in place, but are also paying the default ACC Cover Plus Levy – essentially doubling up and paying twice. You can only claim on one of these so you shouldn’t be paying for both of them.

It is important to remember that reducing ACC Cover Plus Extra also reduces the entitlement for accidental death cover. This is where talking to one of our advisers is important so they can advise you of all the implications and how to best cover yourself.

Try our five question ACC survey here and receive your FREE risk management report.

If you are ready to review your ACC levy and make sure you have the most comprehensive cover in place, get in touch with one of our team.

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Getting the most from your income protection

Income protection insurance is one of the most important insurance covers you can have. As we have said before, your ability to earn an income is your greatest asset.

Many income protection policies also come with add-ons. These vary between providers – some are included in the policy, whereas others carry an additional premium. To make sure you are getting the most from your income protection policy, it is worth knowing what add-ons are available.

Dependent Caregiver/Relative Benefit

When you take out income protection, you are insuring your ability to earn an income. While it is obvious that this is dependant on your health and wellbeing, none of us exist in isolation. Having a relative suddenly needing care can impact your ability to work.

This is where the Dependent Caregiver Option comes in. As an example, the Partners Life policy will pay out six months of your cover if you need to care for a parent, child, sibling, grandparent, grandchild, mother-in-law, father-in-law, spouse, de facto partner or civil union partner.

There are restrictions and differences between providers, which is why it is always best to speak with your adviser to find the policy that best suits your needs.

Retirement Protection

Income protection covers you until you are 65 years old, which is great for an income throughout your working life. However, if you start to claim relatively early in your working life, what happens after you reach the age of 65?

If you choose the Retirement Protection Option add-on, you can choose to have 2 percent, 4 percent or 6 percent of your pay-out contributed directly to your Kiwisaver fund. It could mean your retirement savings do not languish when you are unable to work.

Inflation Protection

If your income protection claim covers a long period of time, you will need to protect your pay-out from inflation. While $5,000 a month may be fine right now, it may not be sufficient in 20 years.

Including inflation protection in your policy means the pay-out will rise in line with the CPI adjustment for inflation.

Payment Term Restriction Option

Some providers will include a restriction on mental health or certain physical conditions. For example, Partners Life has a Mental Health Restriction and Fidelity Life offers a Spine or Mental Disorder Restriction.

These are common conditions that are claimed on income protection, so if you opt in to a restriction you can save on your premium. If you were a Fidelity Life client and you opted in to the restriction, you would only get two years paid out on a spine or mental health claim – but you would save 20 percent on your premium.

Booster Option

If you include the booster option when setting up your cover, you can boost the benefit by 30 percent for the first three months of the pay-out. Most claims are completed in 3 to 6 months, so this is a great option to get more from your pay-out when you do claim.

Specific Injury Benefit

Many income protection policies have a list of specific injuries and illnesses that they will pay a certain amount of your policy before the waiting period is up. These can include (but are not limited to) fractures, loss of a digit or limb, organ failure or burns.

Again, it is important that you know what your policy covers so you can get the most from it should something happen.

How long should you keep your income protection policy?

Income protection is one of the most expensive covers, which means when expenses are cut back it can be the first to go. Recent research by Asteron showed that the average age of income protection claims was 47 years old, and the average age of cancellation was 46 years old.

Working with your adviser, who knows the providers and policies in great detail, means you can work out how to reduce your premiums while maintaining some cover. You will find there are different things you want from your policy in your 30s compared to your 50s.

There are also benefits built in to income protection cover (more than we are able to list here) that may mean you can reduce your other insurances instead, while maintaining income protection cover.

If you want to know more about income protection and the benefits and add-ons available, contact one of our advisers.

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The Four Pillars of Plus4 Insurance Solutions

At Plus4 we have a promise we make to our customers: “Choosing the best of the best for you”. This promise represents our point of difference, is the statement that we live by, and has remained unchanged since Plus4 was founded.

In addition, our practice is founded on four core principles or pillars, Best for You, Advocacy, Local but National, and Relationships. These principles four pillars guide us in choosing the best personal and business insurance cover for each individual client.

Best for You

We select the best for you – by using independent research combined with the collective experience of Plus4 Advisers. We believe this gives us a level of transparency, which means you can trust our advisers to give you independent advice.

We start by assessing the independent product rating. This gives us an indication of how the different policies stack up against each other, by looking at their policy wording at an in-depth level. Insurance is only as good as the fine print that it is written with, which is why we use independent research to qualify the products we use. It means our selections are not based on our opinion, or the relationship we have with providers.

We use independent research houses, including QPR, Iress, and Plantech, which research all the products on the market and give an unbiased analysis of the features of each.

It is worth noting that while insurance houses open their products to these independent reviews, there are a number of banks who provide insurance, that do not. In our view, this is because ‘in-house’ bank insurance products often rate very poorly in these independent reviews.

The second element we examine is the provider’s financial strength rating. This is rated by A.M Best, and Standard & Poor’s (Australia) Pty Ltd, and gives an indication of an insurance provider’s solvency and ability to pay out on claims. There is no point in us helping you get good coverage if the provider can’t pay out at claim time! It’s worth noting that there is also legislation ensuring insurance providers are able to cover their claims, and this was tightened after the Christchurch earthquakes.

Lastly, we look at the claims rating of a provider, which means how many claims they have approved versus how many they have turned down. For example, Sovereign pay 96% of all claims, which is considered a very high rating. It is most likely that the bulk of the 4% they didn’t accept were claims that shouldn’t have been made.

If a provider has a low claims rating, it is an indication that they may have non-industry standard clauses in their fine print, or less-than-stellar business practices. We want the best coverage for our clients, so this means we will avoid these providers.

Advocacy

Through the strength of Plus4, we are able to help achieve the best possible policy terms during the application process and deliver the most successful outcome at claim time.

If we believe a claim has been unjustly denied, our Claims Advocacy 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, at no cost to the client. We have had tremendous success in this space, in the rare event that we do experience claims issues.

Read more about our Claims Advocacy Team in our article here.

Local but National

From Whangarei to Invercargill we have 44 advisers, working from 28 locations. This means not only is there is an adviser near you, but that adviser is also supported by our head office and the entire national team.

Relationships

Of utmost importance to the way we operate is developing trusted relationships that last. Providing you with confidence in your choices and at claim time, we are your personal insurance advisor and are with you to help throughout every stage of your life. This means when your circumstances change we are there to make sure you still have the best coverage, and should need to make a claim we are there to help you through it.

Lastly, overarching and supporting our four pillars is the independent best practice review process. We engage a company to conduct an annual review of Plus4 advisers to ensure we are complying with legislations, regulations and codes of conduct. This is not a requirement of the industry, but something we take on voluntarily because we believe it provides another layer of transparency and assurance to our clients.

To make sure you are getting the best insurance coverage, from a passionate and professional adviser, contact one of our team today.

The circumstances of every claim are unique, so always talk to your adviser about your circumstances and your policies when making a claim – we are here to support you through this process. 

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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.

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Our Clients Agree

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