WealthDesign

This week a good friend of mine called with some tough news. She has breast cancer and will need an operation and time off work.

About four weeks prior, she had been in the bank and had been told by a bank worker that her insurance package was ‘a rip off’ and she should cancel it. Fortunately she came to see us before she did anything, and after talking to her, we found we could add the non smoker discount as she had given up smoking 12 months ago – with the reduction in premium, it didn’t alter the covers.

The outcome of this is that her trauma cover is going to provide her with much needed cash while she has time off work to get well. This is why we believe our clients need to have a good insurance schedule.  We always work from claim time backwards and design a plan accordingly.

Research shows that people often cancel their insurance at just the wrong time (and we see it all too often). This is done without coming back to talk to us (as people can feel awkward) and often it is on the spur of the moment. It can be triggered by off-the-cuff comments from people in the industry, but who are often not qualified, such as the conversation my friend had with the bank worker. 

At least once a month we see someone in a situation that insurance is going to make a huge difference to. We know how insurance portfolios should be planned and we know which companies pay the claims without causing you hassles. BEFORE you cancel your insurance, come and have a chat.  Every decision, even a decision to stop paying insurance, needs advice.

Our door is always open and we love nothing more than having a chat about what’s up in your life. We’ll listen, we won’t judge and we’ll give you good, quality advice.

John Barber
WealthDesign – a life well planned

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Every week, one of our clients is unfortunately in the office organising the paperwork to claim on their health insurance, to cover their medical costs.

We’re a fan of medical insurance – as we’ve seen what happens to people without it.

Check out these examples of the current costs of some surgeries:

Cataract surgery                           $4,300 – $5,200
Endoscopic sinus surgery         $12,000 – $37,000
Wisdom teeth extraction               $3,000 – $5,000
Angioplasty                               $17,000 – $27,000
Single valve heart surgery        $48,000 – $60,000
Heart by-pass                           $35,000 – $50,000
Mastectomy                              $12,000 – $15,000
Hip replacement                       $20,000 – $27,000
Robotic prostatectomy             $30,000 – $45,000

New Zealand has an amazing health care system, but unfortunately, it is under pressure. Health insurance allows you to by-pass the waiting list, and this could be vitally important to your health at some stage in the future.

If you don’t have health insurance, give us a call. And if you do have health insurance, then let us check your premiums, to ensure they aren’t running away on you.

John Barber
WealthDesign – a life well planned

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The shape of our families in 2017 looks somewhat different than the family shape in 1977. Today many families are blended families and often with more than just one set of children.  Blended families can make financial planning just a little complex!  Often there are issues around how assets are split if one or both partners die untimely. 

We are now seeing KiwiSaver scheme balances getting up to the stage that they need to be considered within the estate planning process too.

There are legal issues and often people don’t want to open the door and play the ‘what if game’, but from my experience, planning for the worst and expecting the best is always best done before a crisis.

Once you can articulate what you want to happen, planning requires an input from lawyers. One of the largest issues we see is that people get the first two parts right, but never finish the paperwork. The outcome can be a basket full of pain, despair and wasted money.

As financial planners, we have experience in organising this process, and understand where insurance can play an important part.

Expect the best and plan for the worst – give us a call today – we make the complicated simple. It’s just what we do.

John Barber
WealthDesign – a life well planned

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I see it happen regularly. People have a habit of cancelling their insurance just before they need it.

Statistics show:

The average age of a death claim is 62, yet often the people cancel their cover at around age 50.

Trauma cover is often cancelled at age 44, yet the average claim is paid out at age 52. 

With income protection, the story is the same. The average claim is paid to 47 year olds, yet the average age when people cancel is 44.

If you are 50 plus, you are in the ‘transition phase’ of your life. You should be getting yourself set up for retirement and your KiwiSaver scheme balance should be starting to grow nicely, BUT don’t ignore your risk management plan.

Before you ever think of cancelling your insurance, come and have a chat. We won’t try and talk you out of anything, but we will give you some BIG picture considerations. This may make a very big difference to you and your family’s life in the future.

Life changes and so do your insurance needs. The best plan of action is to have annual reviews – they cost you nothing – but keep you on track, at each stage of life.

Don’t become one of these statistics – make sure you and your family are sorted, if misfortune happens to knock on the door uninvited!

John Barber
WealthDesign – a life well planned

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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 Barber 
WealthDesign – a life well planned

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