Some need to know, with a bit of WealthDesign nice to know thrown in.

Insured is not always insured

So you think you’ve got insurance and that you’re covered, right? People often think of insurance a bit like pregnancy – you either are, or your not. Not true, unfortunately.

When you sign up for your insurance policy, you don’t tend to read the policy wording – small print isn’t interesting, and we often think it’s just, well small print. Well that small print can become very LARGE instantly, come claim time, and an illegal act has been committed.

We all think we’re law abiding citizens, and that our insurance will give financial security to our family if we were to die in an accident. Just because you have a policy (and have been paying the premiums year in and year out), it doesn’t mean your claim will be approved when called upon.

Here’s an example. A claim was recently declined under the illegal acts exclusion, when a passenger in a car died because she had not put on her seatbelt. Mere forgetfulness can lead to claims being declined.

Here’s an example of some illegal acts that you may recognise from your own driving history:  straying over the speed limit, drifting out of the correct lane, failing to give way, and not to forget failing to wear a seatbelt.

Here’s an example of exclusions, straight from a New Zealand bank’s policy wording:

This Policy will not operate, and the bank will retain any premiums paid, if the Insured dies (directly or indirectly) or develops a Terminal Illness (directly or indirectly) as a result of:

  • An injury or an illness arising from an act which was intentionally self inflicted, within 13 calendar months from the later of the Commencement Date or the Date of Reinstatement;
  • The Insured’s involvement in an unlawful act whether or not the Insured is charged or convicted of an offence in respect of that act; participation in war (whether war is declared or not), warlike operations, insurrection or civil commotion.

I’m not picking on banks, nor am I implying that it was a bank policy that was declined in the example above, but I’m highlighting that not all insurance policies are equal, and people need to be aware of what can happen if you use the wrong insurance provider, with substandard policy wording.

All of this can be avoided though, by using an insurance provider with more consumer-friendly policy wording in their policies.

WealthDesign works from claim time backwards! We would never recommend a policy with such a large ‘get out of jail’ for the insurer. If you have a policy with this exclusion, I recommend you consider reviewing your insurance portfolio, as soon as possible.

Give us a call – we work for you, to get you the best possible outcome, in every situation.

john copy

John Barber 
WealthDesign – a life well planned

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Inspired for life – in 2017

Well done everyone – Sunday December 25th is in sight! The frenetic pace of life is soon to be replaced with chill time, relaxation and doing what takes our fancy for a while. Whew! 

Here’s a neat little tool that may help you to reflect on what you want to experience and achieve in your life – both in 2017 and beyond. If you’re looking to transform your world, try this bucket list idea. Focusing your mind in a different way, turns your brain into a ‘heat seeking missile,’ and opportunities appear to head you in the direction of life you want to live.

Inspired for life

So we suggest you print it, then find a sunny spot and grab your favourite cuppa/glass of ……., and create your bucket list.

Here’s our chance to wish all of our awesome WealthDesign clients the most amazing Christmas possible. Thank you for choosing WealthDesign to be part of your financial team in 2016. We are privileged to work with you and revel in the opportunity to help you get to where you want to go in life.

May your days be merry and bright! 

 

WealthDesign
A life well planned

 

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An ETF or Exchange Traded Fund is like a unit trust but listed on the stock exchange such as the NZX or the ASX.  The great thing is these investment tools are a cheap way to invest into diversified assets without the expensive fees attached to many unit trusts (let alone the performance fees some investment outfits slip in as well).

ETFs can invest into anything from commodity indexes or share market assets to listed property assets.  The ETF assets are directly linked to the underlying assets and don’t have the problem that some listed investment companies have. In some cases listed investment companies can either trade at a premium or discount to their underlying assets. With the structure of ETFs this can’t happen as the under lying asset value and dividends, flow directly to the investor.

I see these funds as a good way to get exposure to assets, that historically, would have required people to use unit trusts (run by big New Zealand institutions) to access . Now investors can access global investments and have the transparency of knowing where their money is invested, and the peace of mind that they can access their cash when they need it.  All of this is backed up by independent research.

Give me a call to learn more.

john copy

John Barber
WealthDesign – a life well planned

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Young investors look to the share market

In today’s environment of low interest rates and the need to have a substantial deposit to buy a home, young investors are looking to the share market to invest.  We are seeing people coming out of university with a desire to save and are now looking at clever ways to get more than a puny 3.6% on their term deposits. Even worse, that 3.6% is before tax and inflation.

Starting isn’t as hard as one expects and it can be really profitable.  What these young investors are doing is drip feeding into the Australasian share market and mostly buying companies that pay solid dividends.

The first thing an investor needs to do is set up a share broking account with a firm listed on the NZX.  This normally takes a bit of time thanks to the AML/CFT legal requirements. This requires proof of identity and address.

The share purchases can be bought on a direct platform, normally run by a bank or via an adviser.  I’m biased as I am an adviser and I believe advice is important. Why reinvent the wheel and make the same mistakes others have made in the past? 

Once the share trading account is set up, I always recommend a separate bank account for the investments. This creates a paper trail and makes tracking things easy.

Often investors like to have an app on their phone to track their investments. These apps are great but only track the capital movements and don’t report on the dividends, hence can be slightly misleading. There are a number of investment strategies an investor can follow. It can be either looking for growth stocks or sticking to solid dividend producing companies. The strategy can also aim to benefit from currency movements between the New Zealand and Australian dollar. Either way, the shares are held in the investor’s name and the dividends can either be paid out to their bank account or reinvested in additional shares.

There is plenty of information available; probably too much! Who do you trust and what information is to be believed? I’m biased and I always suggest finding someone experienced who will mentor and provide quality (written) advice. Often this won’t even cost, as there are lots of advisers who will happily share their investment experiences; both good and bad.

We now have a number of our clients doing just this and can highly recommend  the process. Investing isn’t only for the old and grey and can be fun and profitable.

If you are interested and would like to have a chat about how this works, give me a call and arrange a time.

 

john copy

John Barber
WealthDesign – a life well planned

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