WealthDesign

Yes, that’s what some people revealed in a recent survey conducted about attitudes and aspirations of people in their 20s and 30s when it comes to buying insurance. Still more people thought cleaning out their fridge was going to be more fun than thinking about insurance.

True, it’s not as exciting as planning a holiday, getting a new phone or buying a better car – but if you spoke to people who have lived through a personal disaster, without the benefit of an insurance payout, I bet they would tell you that it’s vital to plan for the worst!

Many people (about two thirds of the people in the survey) either don’t take advice at all, or turn to the internet, or friends, or family before they purchase insurance. Often people think parent’s opinions are considered boring, predictable and old fashioned – go figure! Either way, the majority of advice sought is from people who have limited knowledge and experience, meaning the advice is poor, at best.

The remainder of the people surveyed have or choose to use an adviser. These people make the smart choice which means at claim time, odds are they’ll be covered – which is what insurance is all about. Plus, they’ve got the support of a real live person (as opposed to an 0800 number), who knows how to get the best outcome for them, as that’s their expertise.

Cheap and fast insurance solutions are not always the best. And if you’re paying anything for insurance, don’t you think it’s best to ensure you get the most bang for your buck? The thought of paying your premium for years to find at claim time that it was for nothing, surely would a bitter pill to swallow, more so than eating any live bug!

WealthDesign insurance advice. Comprehensive, affordable and, we don’t bite.

Regan Thomas

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A bankrupt’s KiwiSaver are off limits to creditors according to a recent Court of Appeal ruling.

This was tested in court recently when an official assignee tried to access two bankrupted KiwiSaver investor’s funds. The official assignee argued that the funds should be available under financial hardship but the Court of Appeal disagreed.

The key message of this ruling is that regular payments into KiwiSaver are protected for the intended purpose and are safe from creditors. This is a very important point as investor’s KiwiSaver balances start to become significant.

KiwiSaver is a really simple process, however, there is some important information that could significantly influence how successful your KiwiSaver is, which we know about and are keen to ensure you know too!  Planning prior to life’s events can make a big difference to your experience of life.  If you want to discuss the nitty gritty around KiwiSaver, give us a call.  

John Barber

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Recently I read an article quoting dairy farm sale prices have fallen by 12.1% over the past 12 months.  In my opinion, I think expectation of falling land values are over estimated.

I think we are going to see a recovery in dairy prices. The total New Zealand dairy supply is equal to the annual production variance in the US dairy production alone. We are also already seeing production fall in Europe as it is unaffordable for them to produce at these prices. I had a report that showed 25% of European dairy farmers would stop milking cows before the end of the year. We are also seeing New Zealand farmers kill any animal that they don’t see as viable (based on constitution – things like bad udders or lower than acceptable production). Dairy farmers are also taking advantage of high beef prices and reducing stocking numbers. All of this will flow into lower Fonterra volumes – you watch the news in about three months time as analysts work this out.

Interest rates along with how farmers think, will also hold up land prices. There are 70% of dairy farmers with strong balance sheets and money is cheap, so don’t expect all farms to fall in value. This assumption that land values will fall is based on the belief that farmers act in a logical, commercial way – they don’t. History shows that if the neighbouring farm comes up, farmers will do their very best to buy it. We know things are tight for our dairy farming friends and they have worked flat out over calving. You can be sure they often have a long term view of things, and they know this is just a season, and tough times come and go.

There are lots of positives out there but as usual, the press come out six months late and try and tell us how bad the world is.

Avoid the noise and look at the long term. Producing food is a vital industry and New Zealand is great at it.

If you are an investor, you need to be considering how you have exposure to this amazing part of the New Zealand economy.

John Barber

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Just like New Zealand dairy farmers, European dairy farmers are also feeling the heat.  I received an update on the state of farming in the EU recently.  The world wide dairy down turn is hurting everyone.  Swedish and Danish farmers are also losing money and if prices stay low, estimates are that 25% of European dairy farmers will stop production. 

In New Zealand however, we run a low cost, grass feed system and can survive where our international competitors struggle.  It won’t take much of a swing to change the dairy landscape, especially when you consider the volumes produced outside of New Zealand.

John Barber

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Recently ‘Fair Go’ ran a story on insurance claims being denied due to non disclosure of existing health conditions, and concerned WealthDesign clients who saw the show have been contacting me querying this.

Great query! 

Here’s what I know …

1. Once a policy is in force, you don’t need to tell the insurer if your health changes.

2. If you are taking out cover, you are obliged to tell them everything a reasonable person would disclose.

3. Once a policy has been going for over three years the non disclosure rules are more difficult for the insurer to decline a claim, unless it is clear non disclosure.

In over 20 years I have never had a claim declined over non disclosure. The problem normally arises with insurance sold over the internet or via the post.  They use short applications and ask limited questions.  (So people aren’t getting good quality advice.)  The onus is then on the client to read the small print and understand they must declare all relevant information.

The trick if you are changing insurers, make sure you tell them everything and never cancel your existing cover until the new cover is in place.

The key is to use a good insurer and an experienced adviser.

So in short, don’t worry; if you’re with WealthDesign, we have your back!

John Barber

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