Tuesday, February 19, 2013

Insurance Advice: Why just Life Insurance may not be enough.

In our experience, there are several crucial mistakes that people tend to make when attempting to secure their own insurance plan. Some of these mistakes can result in catastrophic financial circumstances if something goes wrong with their health or they find themselves facing physical disablement. We definitely don't want to see that happen! A lot of these mistakes are based around incorrect assumptions about insurance and the true circumstances they may face with their health.

One of the most critical mistakes we often see is that people tend to assume that basic life cover, designed to pay out upon impending or actual medical death is sufficient to cover their financial needs. Coupled with this is an assumption that tragic health issues tend to arise quickly and result in a relatively quick passing, such as through cardiac arrest or in an accident.

Unfortunately, the official statistics provided by New Zealand Health Information Services  do not favor such assumptions. New Zealand has an official death rate of around 30,000 per year. Sudden deaths through accidents account for only 6% of total deaths per annum. This amounts to a mere 2,700 out of 30,000 deaths. A huge 94% of all deaths are due to medical problems or illness; a huge 28,200 out of 30,000 deaths.

As we can see from this graph, in the majority of cases, the reality of the process is much different than most people expect. At the point on this graph where one finds themselves disabled by illness and no longer able to work, typical life insurance designed to pay out on impending or actual death will not kick in, all the while you still have to face the crippling burden of a mortgage, rent, electricity, food and debt management with no regular income to depend upon.

There is a solution to this, it just takes a little time to sit down, plan out your real needs and design a plan that will cover your real needs, not just your assumed ones. Perhaps the solution is a broader plan, with lesser life insurance but added trauma cover or Total Permanent Disablement cover. There is no one size fits all solution, and that's why we recommend talking to a professional before you commit to purchasing insurance. We can take you through your personal financial situation and get you the right insurance cover to make sure you and your family are protected, for the most competitive prices on the marketplace. Our service is completely free and no-obligation!

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