Protect Your Lifestyle

 

Trauma insurance

We all know someone who has suffered from a stroke, cancer or a heart attack. Life is not “black and white” when you are dealing with this type of critical illness. Everyone is different in terms of how they want to deal with their changed circumstances but most want to spend time with loved ones.

A lump sum of money gives you the choice as to how you deal with your situation. It can remove financial uncertainty and stress so that you can focus on your recovery. You may choose to pay off debt, take time out to “smell the roses”, seek alternative treatments – the choice is yours.

Trauma cover provides you with a lump sum of cash if you suffer from a pre-determined condition and survive for 14 days

Some commonly asked questions

What conditions are covered?

90% of the claims relate to cancers, strokes and heart conditions – however some companies cover up to 42 different conditions such as blindness, benign brain tumours, serious burns etc. Our job is to understand the different offerings and ensure you have cover that pays out.

Why do I need trauma insurance?

You may be diagnosed with a life threatening illness but due to advances in medical technology, you survive it. The time you spend battling your illness may mean you cannot earn a living but the bills keep coming in. A lump sum of money into your household gives you choice as to how you deal with your situation and your return to health. It may be that you do not return to good health and a sum of money to clear your mortgage for example gives you more financial freedom in the future.

57% of adults diagnosed with cancer will survive up to 10 years 51 of people a day are diagnosed with cancer here in New Zealand 21 New Zealanders a day have a stroke – 5 of them will be aged under 65 (sourced from Tower trauma document)

How bad does it have to be for me to be paid?

To meet the claim criteria for some of the covered conditions (such as osteoporosis or lupus), you will need to have suffered a significant impairment. There may be a long time between diagnosis and becoming that impaired. The reality is this diagnosis can still place financial strain on you and your family. A number of insurance companies recognise this and will make a partial payment.

Do you want to read the policy documents and “get your head” around these conditions – that is our role and we are happy to help you.

What about my children – are they covered?

If your child was diagnosed with a critical illness such as cancer, you would want to spend all of your time and energy with them, helping them to become healthy again. Many households now rely on 2 incomes. A lump sum payment to your family at a time like this would help to remove financial stress at what is already a difficult time. This cover is available to you and we can explain how it works – with some insurers it is available at no cost to you.

 

Income protection insurance

How long could your household survive without your income?

Your ability to get up each day and earn a living is your greatest asset. If you could not work for 3 months, 6 months, 12 months, 5 years – what impact would this have on you and your family’s lifestyle today and in the future? All of the people I meet with insure their homes and their motor cars – yet the chance of your home burning to the ground is so very remote. The chance of being disabled due to an illness such as cancer or stroke is so much higher – 1 in 3!

If you are the main breadwinner for your family and you have limited savings, you need to protect your income.

Some commonly asked questions

How much of my income can I insure?

There are 3 main types of income protection policies…

  • 1. They will pay you a monthly benefit based on 75% of what your income was prior to going on claim ( indemnity). The benefit is paid to you as a gross amount so you need to pay tax on that figure, and the premiums are tax deductible. You will need to prove your income at claim time.
  • 2. The monthly benefit is agreed upon at the time you take out the insurance. It is paid as a net amount and the monthly benefit is based on 55% of what your income was at the time you set the policy up. The premiums are not tax deductible.
  • 3. A Loss of earnings – the insurance company recognises the loss at claim time. For those clients who have dialled down their ACC benefit with ACC Cover Plus Extra – this type of policy can make a significant difference to their income at claim time.

What is the best option for me?

We can discuss the different options with you and tailor the protection to suit your situation and to ensure you have certainty at claim time.

How long do I have to wait to get paid the benefit?

You decide – the question is – how long could you manage without your income? If you have savings, you and your spouse have a similar earning capacity, or if you have family support then you may choose a longer stand down period. The length of stand down period can have a big impact on the premiums. We can help you to make this decision.

If I work part time will they pay me any benefit?

If you suffer an illness or are in an accident and cannot work for a prolonged period of time, it is unlikely that you will go from not working at all to working in a full time capacity. As such we would always recommend protecting your income with a policy that will pay you in the event you can work part time. This ensures you return to work at a realistic pace and do not jeopardise your health by feeling financial pressure and returning to full time work too quickly.

What do I have to provide at claim time?

You need medical proof that you are unable to work. You may also need to prove of income depending on the type of contract you have. In this situation your accountant may need to assist you in getting up to date financial information. We will help you at claim time to make sure we get the necessary information to the claims team as quickly as possible.

How long will I receive a benefit?

It is your choice – the policy can be set up with a 2 or 5 year benefit, or payable to age 65 or 70. We would recommend that you have a benefit through to the age of 65 or 70. If you suffer from a debilitating illness in your early 40’s, and are unlikely to ever work again, how would you manage with just a 2 year benefit? You would then be forced to manage on a sickness benefit for the rest of your working life. (The sickness benefit is currently $229 gross per week).

 

Total and Permanent Disablement

To be told you will never be able to work again would be devastating. It is the worst possible thing to happen to you financially – statistically it is the least likely thing to happen to you.

Given it is not a common type of claim, the premiums are relatively low.

How disabled do I have to be to make a claim?

This depends on the type of policy you have and how they have defined your disability.

Unable to ever work again in your own occupation.
Unable to ever work again in any occupation for which you are qualified or experienced.
Unable to carry out 2 of the 5 activities of daily living.

Clearly the first definition provides a greater level of protection. Some trauma policys will also pay out in the event you were totally and permanently disabled.

We can explain the different options and look at how the premiums compare for you.

 

Mortgage protection insurance

It is a fact of everyday life that for the vast majority of people their mortgage is their biggest debt.

If you were unable to work, who would pay your mortgage? Do you want to risk losing your home if you were unable to work due to ill health or an accident?

Some commonly asked questions

Is this a monthly benefit or a lump sum payment?

It is paid to you as a monthly amount and that amount is based on your mortgage payment at the time of setting up the policy.

You may have a life insurance policy that would pay out (a lump sum), sufficient upon your death to clear your mortgage but this policy pays a monthly benefit in the event you are alive but unable to work.

Will the money be paid to me or to my bank?

How much of the mortgage payment will be paid to me each month?
Ideally you would protect as much of your income as possible and the mortgage may only be a percentage of this. As such you need to consider all of your options to ensure that your protection plan gives you certainty and as many options as possible when life is no longer black and white.

How long do I have to wait to get paid the benefit?

You decide – the question is – how long could you manage without your income? If you have savings, you and your spouse have a similar earning capacity, or if you have family support then you may choose a longer stand down period. The length of stand down period can have a big impact on the premiums. We can help you to make this decision.