Tuesday, December 23, 2014

Merry Christmas and Happy New Year from Spratt Financial.

The whole team at Spratt Financial Services wishes you an amazing Christmas and an extremely prosperous New Year! We hope that 2015 is the year in which all of your financial dreams come true. Stay safe on those roads and enjoy the special time with your families, whether you're at home or away.

Wednesday, December 17, 2014

Spratt Financial Christmas News Roundup (Part Two)

1. Tips to avoid becoming a Christmas burglary statistic. - Yahoo.co.nz

It's an unfortunate fact that burglary is rife during the festive season when many of us are away on holiday. Here are some tips to stop this from happening to you. Home and contents cover is a good start, but it's a good idea to be prepared, vigilant and take precautions to make sure your Christmas is as happy and stress free as can be.

2. Onepath life introduces new products to meet consumer demand. - Good returns

In the most significant product enhancement in years, Onepath has released two new income protection covers and one redundancy cover, including enhanced features such as new loss of earnings cover and 115% cover on mortgage repayments.

3. Rising housing costs hit wallets hard. - Stuff.co.nz

Average NZ incomes have not risen at a high enough pace to keep up with rising housing costs. Whilst incomes have risen 3.1%, the average spent on housing has jumped by more than double this figure, by 8.6%.

4. Why some people work on Christmas Day - BBC News

Spare a thought for those of us working on Christmas day, providing valuable service. Here are some of their stories courtesy of the BBC.

5. Forecasters predict a warm Christmas with a chance of rain. - NZ Herald

The last weeks, Auckland has experienced some horrendous weather on and off, the weather for Christmas is forecast to be warm, with a chance of rain. Fingers crossed it passes us by, surely we are due for some good stuff!

6. Top 10 hot items for Christmas. - NZ Herald

Statistics from recent Trademe searches reveal the hottest Christmas purchases for New Zealanders in 2014.

Wednesday, December 10, 2014

Spratt Financial News Roundup

1. Five minutes with the head of Zurich New Zealand Claims department. - Insurance Business Online

Here, Brian Chikanya related that he believes that insurance products are very often misunderstood and this is one of the things about the insurance industry he wishes to change. We do too, both by helping simplify the insurance process, as well as better explaining the benefits to clients and the public.

2. A Christmas treat for the needy in Wairarapa on Christmas. - NZ Herald/Wairarapa Times

Carterton residents who would otherwise be alone this Christmas, or those in need of a good Christmas meal can congregate at the Carterton Events Centre where for 14 years, volunteers have dedicated their day to providing a wonderful community experience. A nice story to put a smile on your face this Christmas season.

3. Kiwis warned not to leave valuables in their cars. - NZ Herald

One major car insurance company paid out $810,000 in car theft claims, and in the wake of a survey in which a third of New Zealanders admitted to leaving valuables in their car, Kiwis are warned to take valuable items with them this Christmas.

4. Aussies currently leading the way with Health Insurance. - NZ Herald

Only 12.5% of New Zealanders over 65 are covered by health insurance, as opposed to a comparatively huge 52% in Australia. Australian investors have become excited about health insurance, showing us in New Zealand a possible way forward for the industry.

5. Kiwisaver bill has first reading in parliament. - Good Returns

This proposal could have a huge impact for Kiwisavers as it would allow members to withdraw Government tax credits, as well as their own contributions, and also doubles the subsidy for first home buyers. We will keep you and all of our clients currently with Kiwisaver updated on the progress of the bill.

6. One in five New Zealanders possibly renters for life. - Stuff.co.nz

The harsh housing market, especially in Auckland, is leading Kiwis to accept the possibility that they may be renters for life. Even in the current market however, there may be finance options available to make first home buying a reality. Send us an enquiry and our mortgage/lending team might be able to make your dreams of owning a home come true.

Tuesday, December 2, 2014

The cast of Friends helps with your insurance decisions.

Ross, Rachel, Chandler, Monica, Joey and Phoebe. Everyone knows the cast of Friends and their crazy New York lives. Friends was easily the most popular and well recognised sitcom of the nineties and the early 2000s. But what on Earth does this have to do with insurance? One of the questions people tend to wonder about is, what type of insurance do I most need? So let's use the example of some of the characters most of us know and love to explore some possible answers. Maybe it will help you decide what cover you should be prioritising.

1. Monica Geller

Monica is a little bit obsessed with her environment. She needs to have everything in the right order, her possessions accounted for, stacked and in pristine condition. Someone like Monica would most likely not know what to do with herself if her stuff and her environment was damaged, stolen or broken in any way, shape or form. So, Monica's first priority really should be some good quality home and contents insurance so that she can replace all that important stuff if something should go wrong. Are your possessions your world? Secure your home and contents first.

Recommended Insurance: Home and Contents Cover

2. Ross Geller

And then there's Monica's brother Ross. Ross is a paleontologist and a university lecturer, and he also has two children to look out for, one from his ill fated first marriage and little Emma with Rachel. Thus, Ross has a lot of obligations that he needs to fulfill. Rachel may have a decent job with Ralph Lauren to help out, but he wouldn't want the whole burden to be placed on her should something happen to him. For Ross it may be a close call between Income Protection and some Life or Trauma Cover. Income Protection would ensure his money from his job would keep coming in if he was injured, disabled or sick. Life cover would provide his children a lump sum payment if Ross passed away suddenly. Perhaps both would be a good idea.

Recommended Insurance: Life Cover and Income Protection.

3. Joey Tribbiani

Joey is a fun loving aspiring actor who had one brief brush with fame playing Dr. Drake Remoray on daytime soap Days of our Lives. Since then though, roles have been sporadic at best, including playing opposite a remote controlled robot and being a butt double. Yes, a butt double. With an income that's not fixed, Income Protection wouldn't be the best option for our pal Joey, but with the way he eats and the lifestyle he leads, he should definitely first and foremost be looking at some health insurance. We all remember that time he got a hernia and had to act on through it!

Recommended Insurance: Health Insurance

4. Phoebe Buffay

Phoebe had a hard childhood and past, spending most of it getting an education on street living. She's a little out there and wacky, but in her heart of hearts is generous, giving and kind. For most of her life, she's had to make her own way in the world and depend on herself. To that end, Phoebe became a beautician and a masseuse to help her pay her way in the big city. Being a masseuse requires her to be fit and able at all times, so it would be a good idea for Phoebe to protect herself against a disabling injury which would stop her from practising her chosen profession. A specialised kind of TPD cover could be the best option, especially since this can be more cost effective.

Recommended Insurance: Total Permanent Disablement Cover (Own Occupation Option)

5. Chandler Bing

Being married to Monica, Chandler might not get the first choice of insurance in the household! However, after moving away from New York to hopefully start a family with his wife in the country, Chandler might want to look at protecting his new mortgage should anything go wrong with his health or if he loses his job. Mortgage repayment insurance combined with some redundancy cover would be a cheap and suitable option to get his new life off to the best possible start. Chandler's mouth sometimes gets him in trouble, so some health insurance couldn't be the worst idea either!

Recommended Insurance: Mortgage Protection, Redundancy Cover and perhaps some Health Insurance.

6. Rachel Green

In the early days of the series, having the right insurance cover was probably the last thing on Rachel's mind. Her rich father took care of her bills and her accomodation and most likely was her de facto insurance cover. Rachel came a long way since then though, becoming an independent woman with a job at Ralph Lauren and a beautiful baby girl to support. The top priority for Rachel now with a newborn baby should be getting her child covered so her medical expenses will be paid for if something should go wrong with little
Emma's health. If she acts quickly, within the first three months after the baby is born, any pre-existing conditions the child has will be covered as well.

Recommended Insurance: Health Insurance for herself and her child.

Always remember, if you need help or have any questions with what insurance could be right for you, you can ask anytime through the contact form on your right, or by email at enquiry@sprattfinancial.co.nz!

Tuesday, November 25, 2014

Insurance Claims Statistics and Facts

Below are a collection of facts and statistics around claims and policies which may help you navigating the tricky waters of insurance:

1. 16% of Life Insurance claims are paid out early for Terminal Illness.

Some may be unaware that your life insurance can be paid out before the policy holder's death in the event that they are diagnosed with terminal illness. This happens in 16% of life insurance claims and can assist the family in making important financial decisions and quickly ease the monetary burden during this difficult time.

2. Life Cover Claim Reasons:

26% Heart Related (Cardiac Arrest, heart disease etc)
26% Cancer
12% Pneumonia
6% Stroke
2% Self Inflicted
1% Diabetes
1% Accident
11% Other
15% Unknown Causes

3. 50% of Trauma/Critical Illness Claims are due to Cancer

Heart related illness in this category accounts for 16% of claims, whilst Angioplasties and Strokes account for 5% each. Trauma cover is a separate form of cover which pays out a sum assured upon your diagnosis with a critical condition.

4. Muscular and Limb Injuries account for 47% of Income Protection Claims from one leading insurer.

5. The average age where Income Protection policies are cancelled is 46.

An extremely unfortunate fact, in light of the fact that...

6. The average age that Income Protection policies are claimed on is 47.

As we get older, we get more susceptible to injury and illness. Think carefully before making any big decisions about your insurance because being left without an income and a family depending on you can be a crippling financial burden.

Any questions about your insurance? Try out our new contact form!

Wednesday, November 12, 2014

Staying Healthy: Losing Belly Fat.

Staying healthy is always a good idea. Not only can it lead to a longer time on this Earth with a far better quality of life, it can have financial benefits too. The better shape you're in, the less you'll be paying for your insurance as your lessened risk to the insurer results in lower premiums, more cover being available to you and less exclusions for certain health conditions.

In this edition of our staying healthy series, we're going to look at effective ways of ridding yourself of that troubling belly fat. An ample waistline puts you at higher risk of serious health conditions including heart attacks, high blood pressure, diabetes and strokes. Excess abdominal fat triggers a change in the bodily hormone which controls blood vessel contraction, increasing the risk of dangerously high blood pressure, strokes and cardiac arrest. That's reason enough to shed those pounds right there.

Men are at higher risk for heart disease than woman, based on higher incidences of stomach fats.

1. Change your diet.

The calories your body consumes from protein are far more easily burned than the ones consumed from carbohydrates. In fact, up to 30% of the calories you consume from protein will be burned during the process of digestion. White meat from poultry and seafoods are good sources of leans protein for snacks and for meals. Try to substitute as many carbs as possible for healthier proteins and you'll make the task of burning that belly fat a whole lot easier. 

2. Stop over-eating.

It sounds like the simplest thing in the world, but our meals are often way too big, and if you're eating more calories than you're burning, you're gaining weight. It's as simple as that. Try using smaller dinner plates to avoid filling up; if it can't fit on your plate, you won't be eating it! Fill up your smaller plates and leave the rest as leftovers for another day. Also, try drinking a lot of water before eating. The water takes up space in your stomach so you won't have to consume as much to feel full. Eat little nutritious snacks in between meals so you won't feel the need to gorge at lunch or dinnertime. 

Smaller plates means less chance of over-eating. Try it out sometime!

3. Start walking!

Walking is an easy, low impact form of exercise that targets a broad variety of muscle groups, gets you active, burns calories and nearly everyone can do it! I personally have been walking a lot the last few months, over 25 km a week. Start by doing a half hour or a set distance per day at a time suitable to you (I find right when I get up before work is my preferred time) and then gradually build up over time as your fitness level improves. Apps like Runkeeper can be great motivational tools as they track your walk and tell you the distance travelled, amount of calories burned and a bunch of other cool stats.

4. Get the right amount of sleep per night.

A selection of studies have shown that the ideal sleep to prevent gaining of visceral belly fat is usually between 6 and 7 hours. People who got less than 5 as well as people who slept for more than 8 hours per night showed more visceral fat gain over a five year period.

Aim for 7 hours of sleep per night - that seems to be the weight loss sweet spot!

5. Don't just do crunches!

I know that when I start gaining a bit of weight around the middle, my first instinct is to start doing crunches. Whilst this may result in stronger abdominal muscles, it won't do much to handle the layer of belly fat on top. Better exercises are ones that work multiple muscle groups at a time. Try planking or the aforementioned walks or runs.

6. Manage your drinks intake.

Minimise soda, sugary drinks and milkshakes. Maximise water, tea and diet soda. Just a simple step like cutting out that can of Coke from your day can have an impact on your calorie intake and your weight loss. Everything counts!

Other entries in our Staying Healthy Series:

Sunday, November 2, 2014

New Zealand Insurer Brings back Full Replacement cover for houses.

Tower Insurance has gone against the prevailing wind of house insurers to offer a full replacement option for houses destroyed by fire. Most insurers in the industry moved to a sum assured model at the beginning of 2013, meaning that they would pay out an agreed upon value (the sum assured) if the house was damaged or destroyed by fire. The sum assured model often sometimes not provide sufficient funds to totally replace the value of the house, just going most of the way.

“Being able to provide full replacement for fire means one less worry for homeowners in the traumatic event of a fire,” Tower CEO David Hancock said. “Tower can guarantee your home will be fully rebuilt if it’s destroyed by fire, regardless of the cost or the sum you’re insured for.”

Providing a full replacement option should set Tower apart in the fire and general insurance marketplace and give customers another option for covering their houses which is always a good thing. Tower says that they made the move to bring back full replacement in light of comments from their customers who found the sum assured format confusing. “People want to know that if the worst happened they can at least know that they will get their house back the way it was.”

If Tower's move proves successful, and they can maintain affordability, it will be interesting to see if other insurers follow suit. What do you think of Tower's move? Do you find the current home insurance confusing? Would you rather go with a full replacement option?

Thursday, October 23, 2014

Spratt Financial Newsletter (October/November 2014)

To check out our official Spratt Financial Newsletter in PDF form, click here.

This October/November 2014 issue contains:

- How to maximise your Kiwisaver results.
- Information on the Hospital Stay Benefit on Income Protection and how it can benefit you.
- Ways to save money on your Insurance.
- What's new with the company?

Monday, October 6, 2014

News: Onepath Life Insurance to become truly One.

Onepath Life Insurance has announced that it will be consolidating its two life insurance companies into one. The move is primarily about simplification, and will not result in any changes to its existing insurances. Currently, Onepath has one company which services advisers and brokers and one company which directly sells their life insurance product, distributed through banks.

The process has begun, subject to approval from the Reserve Bank. There is anticipated to be no issue moving forward, and the merger is expected to be approved and completed. Onepath says that the merger will enable them to avoid two companies worth of compliance costs and streamline their services, ultimately aiming to provide a future benefit to customers.

Onepath is also planning a major product relaunch next month which will feature a focus on income protection. We will keep you posted with what this entails, what changes could be made and how this could benefit you as news emerges.

Changes are on the path ahead for Onepath.

Sunday, September 28, 2014

Hospital Stay Insurance Benefit - How it Works

Hospital. That smell, those beds, that food. Trust me, as a regular visitor to one, I know the drill. It sure isn't my favourite place in the world to visit. But if I was to get re-imbursed for it, that sure might make it a heck of a lot more tolerable. That's what we're talking about today, a benefit on your insurance that could result in just that.

If you have an Income Protection policy you likely already have this benefit (although it always pays to read the policy wording and check, because different providers and policies can vary). Basically, what it means is that if you suffer an illness or accident that necessitates a stay in hospital, you can claim on your hospital benefit. The benefit is designed to protect you whilst you're in hospital, aren't earning an income and possibly can't manage the bills such as your mortgage/car payments/rent etc.

The costs of a hospital stay on your life can be mitigated with Income Protection.

For instance, let's say Mike has a policy with a hospital stay benefit and suffers an illness which lands him in hospital for two weeks. The way the payout is usually calculated is that you will receive 1/30th of your agreed upon monthly income protection payout for each day you are in the hospital. Mike's monthly sum assured is $5,000. 1/30th of $5,000 is $166. That means Mike will receive $166 for each day of his hospital stay. Since Mike stayed two weeks, he is eligible for a total payout of $2,333.

We're trying to draw a bit of attention to this benefit, because recently we have had clients unaware of the fact that they were eligible for a claim on hospital benefit until we told them. So take a close look at your policy wordings and if you've had a hospital stay in the past, you might be eligible for some financial help.

Visit us online at www.sprattfinancial.co.nz for more info.

Wednesday, September 17, 2014

How to save money on your insurance.


1. Think about your sum assured.

The sum assured of your insurance policy is the amount that the insurers will pay you when you have to make a claim. As the sum assured of your insurance increases, so will the premiums that you pay. Take the time to do some research and think about what circumstances in your life could arise. Plot out a set of possible costs and ask the right questions (for instance, 'If I were to be diagnosed with cancer, how much money would I need to keep my family going and support them?). When you have come up a figure as best you can, add to the figure a bit and take that as your ideal sum assured. Rather than just assuming costs and selecting a round figure such as $200,000 which could be too high, taking the time to plan could end up saving money on your insurance. For a deeper insight, you could always consult a financial adviser who can plan out exactly what you need your insurance cover to be.

2. Scour the marketplace or get a quote from several brokers.

Every insurance provider is different, with different waits, different conditions and different policies. It is crucial that you take the time to go out into the marketplace and find the best deal possible. Jumping at the first offer could leave you paying premiums you don't have to. If you wish to go it alone, compare the major insurance providers plans and offers. An insurance broker can help you complete this process with even better results, as reputable brokers generally have deals in place with major insurers and can get you even better rates. Get quotes for your insurance from several brokers to compare and then select the one that offers you the best deal to save money. Also take into consideration the ongoing service they offer as well as the quality of the cover they are offering.

3. Think about adding an excess.

If you are looking at a medical or fire and general insurance policy (such as home, contents or vehicle insurance) adding an excess can reduce premiums significantly. Adding a $500 excess for example, means that the first $500 of any incurred medical or damage costs is agreed to be paid by you, with the insurer covering the rest in their claim. Having an excess can be inconvenient, but if you claim rarely, it can more than pay for itself with the savings in premiums.

4. Extend your wait period - Income/Mortgage Protection/Redundancy Cover.

In an income protection or mortgage insurance policy, the wait period is the amount of time you agree to wait after your claim is accepted for insurance payments to begin. For instance, with a 13 week wait, you will begin receiving your income protection payments 13 weeks after your claim is accepted. The longer your wait period, the cheaper the premiums you will pay become. If you are part of a working couple who can sustain themselves on one income for a period of time or if you have savings set aside for a rainy day, this could be ideal in saving you money.

5. Select the right optional benefits.

Many policies can include optional benefits or extras. Medical policies for instance can be more basic or comprehensive, including such things as hospital cover and GP costs. Think about the benefits you are truly likely to need and which ones are not required. An adviser can help with this process, setting out all the benefits against your current personal financial situation.


1. Review your insurance regularly.

We review our clients insurance annually, and the reason for this is that things change, both in life and in the insurance marketplace. A new product may have come on the market, your life circumstances may have changed or better deals may now be available. If you have your own personal insurances that are not through an insurance broker, be sure to take the time to review your cover on a regular basis. Ask yourself how well it is working for you, if anything has changed in your life that may allow you to reduce your cover and search for new deals that are out there. If you are with us, we can do all this for you. A regular review can save you money in the long run.

2. Are you a smoker?

Keep in mind that if you were a smoker at the time of taking out your insurance policy, you can save a considerable amount of money on your premiums by quitting. Several of our clients in the past have neglected to inform us that they quit smoking years ago when their policy was continuing under an assumption of smoking. Once you have quit for a certain period of time, your policy can be changed to non smoker, and you will be shocked at how much money each month you are saving.

3. Think about the cheaper, more specific covers.

If you really need to save money on your insurance, you can think about replacing some of your insurance with their more specific, less expensive versions. Income protection can be more costly when compared to both Mortgage Insurance and Redundancy Cover. So, if you are mainly worried about covering your mortgage payments or maintaining an income in the face of redundancy, these cheaper policies can be better than a full on Income Protection policy. Discuss your options with a professional and make an informed decision.

Want a free, no obligation review of your insurance needs? Email enquiry@sprattfinancial.co.nz or call 09 307 8200 today.

Thursday, August 14, 2014

Insurance Advice: Avoiding Non-Disclosure

When it comes time to secure your insurance, most of us are familiar with all the forms we're asked to fill out and tests we're expected to undertake. These processes are on the part of the insurer, who is attempting to determine 'level of risk' that you represent to them as a business. Basically, if you are in tip top physical health at a young age and you're applying for life cover, you don't pose much of risk for an insurer to pay out a huge amount in the near future. Thus, your premiums will be lower and your policy will have less exclusions and no loading.

On the other hand, if you have gone through significant health issues in your life or are of a more advanced age, you are more of a risk to the insurer and thus premiums will be higher, exclusions may apply as well as some loading.

This process requires complete honesty on the part of the person applying for insurance, because unfortunately, insurance is a business and purposefully or unintentionally misleading the insurers on your health status or past conditions you have had can sometimes be deemed a violation of your contract, resulting in the insurer refusing to pay your claim or paying a reduced amount.  If it comes out during your application for a claim that any of these conditions were present and not disclosed to the insurer, you risk losing your payout entirely.

When it comes to informing your insurer of your health conditions and history, silence definitely is not the best policy.

So when you're filling out those forms, how do you know what to disclose and what not to? Surely you don't need to mention the leg cramps you had when you was 18? Well, the safest thing to do is simply declare everything you can think of. Not the fact that you had a cold or got the flu, but ailments, conditions, injuries, allergies that you have suffered throughout your life. If you have any doubt whether to include it, include it! At the very least get in contact with our team and ask, and we can tell you with our insurance knowledge whether or not this is something you need to declare or not.

Never assume something is irrelevant. The insurer may have a differing opinion and it could cost you a great deal. If in doubt, ask us, or contact your insurer directly. We have seen non-disclosure ruin claims and leave people in financial ruin. The good news is, with vigilance and honesty, you don't have to worry about it happening to you.

Thursday, July 24, 2014

Just For Fun: Alien Abduction Insurance? Yes, it exists!

When we think about the events likely to befall us in life and the things we should consider protecting ourselves against, most of us probably would consider ill health or car accidents. Perhaps even violent crime or theft. I wonder how many of us would consider that they need protection for an alien abduction?

Apparently, the answer is, enough for a renowned insurance provider in the UK to offer it as an option.

Simon Burgess, the former Managing Director of British Insurance has put the option to the public; an insurance policy redeemable if the insurance person is abducted by aliens. "Of course, the burden of proof lies with the claimant", Simon says. Well naturally. I do wonder what would constitute such proof though. A spaceship in the backyard? Some alien fingerprints on the clothing?

Well, the good news for potential buyers is, alien abduction insurance is cost effective. A whole $1.5 million worth of cover will only cost the discerning citizen $150.

Remarkably, Simon is not the only one to have offered this. The very first company to offer UFO abduction insurance was the St Lawrence Agency in Florida. The company says it has actually paid out two claims! They also say that over 20,000 people have purchased the insurance, including a former Harvard professor who had written on aliens. Lloyds of London however, have taken a rather dim view of view saying that the extreme majority of those buying the policy are "feeble minded".

Should we be taking this more seriously? After all, it's a big universe out there and several UFO claims are well verified by extremely credible individuals. Maybe it is a good thing that some insurers out there are providing the option. On the other hand, I personally would like to think if you're getting abducted by aliens, getting some sort of  financial compensation for it probably isn't your greatest concern!

What do you think? Would you get protected from ET, or is all of this just a type of silliness that's out of this world?


Probably not a bad alien to be abducted by.

Probably a VERY bad alien to be abducted by.

Sunday, July 6, 2014

Lack of life insurance leaves Christchurch family in dire straits.

Original Article can be found here: http://www.stuff.co.nz/the-press/news/10211442/Mums-death-leaves-siblings-struggling

A 43 year old Christchurch woman recently tragically lost her battle with a very aggressive and fast acting form of cancer. She had a house, a mortgage of $150,000 (which she falsely believed to be closer to $75,000) and two children who relied on the family home to survive. One of her children even had a child of her own, leaving two generations of dependants relying on the family home and finances and unable to support themselves.

Worst of all, she had no life insurance or mortgage protection. Upon her death, those left behind not only had to deal with the life consuming grief of losing their mother before her time but also the financial struggles of having to sell the family home, $8,500 funeral cost, outstanding bills and $7,000 credit card debt. Her siblings Kate and Bryce have set up a crowdfunding page to help them out in their desperate times which can be found at http://www.givealittle.co.nz/cause/KateandBryce (we definitely urge anyone who can to help).

Unfortunately, though it was of course not intentional on this mother's part, investing in life insurance could have averted all of the financial burden on the next generation after the tragedy occurred. We are personally extremely sad whenever we hear of a story like this, as we feel that we could have done something about it. Life insurance, especially for a mother in her early 40s in otherwise good health, doesn't have to be expensive, and this case demonstrates just how much it can help. When others rely on us, we can't just continue to assume that nothing will happen and things will work out, we need to put every safeguard in place that we are able to. It's not about money, it's about people.

Please think about helping out Kate and Bryce and if you want to see just how affordable and beneficial life insurance can be, give us a call, we can help.

Sunday, June 29, 2014

Important Health Insurance Facts from Southern Cross

Last week at the Spratt Financial offices, we received our annual presentation from higher ups at Southern Cross, New Zealand's biggest health insurance providers. Some of the facts mentioned were really interesting so we decided to share!

  • A lack of medical insurance is according to statistics the biggest contributor to mortgagee sales in the country. Mortgagee sales for those who don't know, refers to the bank or lender selling a home from underneath the owners when they are unable to make mortgage payments. Unexpected medical, surgical or health costs when someone doesn't have insurance is the main contributor to people losing their homes and that was the most shocking fact of all to us.
  • The majority of claims to Southern Cross come from those aged 65. 
  • If you drink less than 2 glasses of alcohol per day, are a non smoker and exercise 3 times per week you can receive a 10% discount on your health insurance premiums. 
  • The cost of the most common procedures used to treat the following disorders are as follows (based on Southern cross' 2012 claims data):
    - Heart Disease: $38,000 - $57,000
    - Skin Cancer: $800 - $3,900 for removal of lesions.
    - Osteoarthritis: $19,000 - $25,000
    - Prostrate Cancer: $15,000 - $21,000
    - Digestive Problems: $400 - $1,800 for Gastroscopy.
    - Breast Cancer: $7,000 - $12,000 for unilateral Mastectomy.
    - Cataracts: $3,100 - $4,700
    - Endometriosis: $6,000 - $14,000
  • For every one dollar paid to Southern Cross in premiums, Southern Cross pays back an average of 90 cents to their members in claims (based on the previous 5 years figures averaged).
  • Southern Cross has no shareholders or overseas owners. We were told this is because they would rather service New Zealanders than be beholden to any outside financial interests.
  • During the 2013 financial year, Southern Cross paid out $639.1 million in claims.
  • Southern Cross currently services 817,822 members in New Zealand.
  • In a worrying industry wide trend, Southern cross' member numbers decreased in 2013. Southern Cross numbers dropped by 0.5% compared to an overall trend in the industry of 0.7%. SC are attempting to draw attention to the negative consequences of not having medical cover (including the mortgagee sales example above) to reverse this trend.
  • Southern Cross has an A+ financial strength rating given by Standard and Poor's.

Interested in Health Insurance?  Call us on 09 307 8200 or email enquiry@sprattfinancial.co.nz

Sunday, June 8, 2014

Does Generation Y need Insurance?

Today in the office, a conversation came up in which the question was raised, which type of people need insurance the most? Is it mature, middle aged men and women with steady incomes, who have already accumulated some valuable assets that need protecting? Is it older men and women, who may be facing impending medical issues in which health insurance could save them huge fees? Perhaps not many people would answer that it's Generation Y who needs insurance the most. After all, just out of school and starting their lives, they likely don't have much risk of ill health or the loss of any hugely valuable assets. They probably are renting or flatting and don't own a home, and their car might be cheap and second hand.

However, these assumptions might need revisiting. It might just be that the very fact that Generation Y (20-30 year olds) have lower assets and incomes that means they need it the most. How so? Well those with accumulated savings, assets (such as a home or business) have more options available to them if something goes wrong. They could sell the house, sell their shares in the business or fall back on life savings to keep them and their families going. Those without these assets won't have this option.

Let's say critical illness strikes. Generation Y is statistically the most likely to be living pay cheque to pay cheque. With no assets to support them, they'll likely have no way of meeting their cost of living without falling back on relatives or other forms of support that might not even be available to them. Without anything behind them, Generation Y could be one unforeseen mishap away from financial dependance or worse, having nowhere to live or being unable to afford medical treatment or surgery.

What do you think of when you think of Gen-Y? Could they have more use of insurance than older folk?

On the other hand though, living pay cheque to pay cheque doesn't leave much disposable income to spend on insurance premiums. This can make insurance seem like less of a priority. So, what they need is insurance that will protect them, without breaking the bank. Is it possible? And just what insurance should Gen-Y invest in first? We have some suggestions:

1. Health Insurance

Health Insurance should be first and foremost. If you are young enough, you may still be covered by your parents policy, but as soon as this lapses, getting health insurance of your own should be priority number one. Between the ages of 21 and 28 I've been spared more than $15,000 of medical costs because I had insurance. Plus, if you invest in it while you're young and healthy, your premiums will be as small as possible, rather than leaving it until later when pre-existing conditions may have developed, leading to increased costs and complications.

2. TPD (Total Permanent Disability Cover)

The premiums for a TPD policy tend to be much cheaper than a Trauma or Life insurance policy, and it can come in handy if you suffer an accent which renders you unable to return to your job. Since accidents and injuries may be more likely for a younger person than a critical condition diagnosis, TPD could protect you from issues Gen-Y is more likely to face, at a fraction of the cost.

3. Redundancy Cover

Similar to the above, redundancy cover is a cheaper form of income protection policy (previous articles have dealt with this form of insurance in detail), which will protect your income if you are made redundant or leave your job involuntarily. It can also cover mortgage payments if you are paying off your first home, making it a sound investment for not so high a price.

4. Life Insurance

Perhaps not as essential, but depending on your situation, it could be a very good idea. For those with no dependants relying on them and no debts, life insurance is more than likely surplus to your current requirements, but if you have a young family, debt or someone depends on your income to provide for them, life insurance for Gen-Y is a good idea. The younger you are, the cheaper your premiums will be, even moreso if you have a clean bill of health and are a non smoker. So as soon as you have people relying on you or a considerable debt to pay off, think about life insurance as a way to ensure everything is taken care of in the unfortunate event of your passing.

Thursday, May 29, 2014

Five Sticky Situations Insurance Could Bail You Out In

1. Being diagnosed with a chronic condition.

As described in one of our earlier posts, at the age of 21 I was diagnosed with Crohn's Disease. Luckily, my conscientious mum had organised me health insurance cover before this happened, and all of my surgery and specialist costs since then have been completely taken care of by Southern Cross. Doing some loose calculations, those costs would have been upward of $20,000 so far, with unfortunately more to come in the future. If I had waited and investigated getting insured after I was diagnosed, I would have either had to cope with a large policy loading or my pre-existing condition may have been excluded entirely. So, having insurance already, before I was diagnosed kept my premiums affordable, and spared me a debt in the tens of thousands.

2. Being disabled in an accident and being unable to work.

Some accidents or conditions can be lived with and managed, and won't affect your ability to earn a living. But many of them will, either for a finite period of time or you may be unable to return to your profession indefinitely. If you have Total Permanent Disablement Cover (which is very affordable in terms of premiums) or Income Protection, you won't have financial burdens adding to your stress during already trying times while you recover. You can focus on getting well, and your family will be secure while you do.

3. Losing Your Job/Being Made Redundant

Unfortunately, it happens everyday. People lose their jobs or are made redundant and left with a whole bunch of worries, including meeting the bills, paying the rent all while finding another job quick smart. As covered a little while back, redundancy cover is a cheaper form of income protection which can protect your income while you search for new employment after being made redundant. As long as leaving your employment wasn't voluntary on your part, you can be covered! Read More Here.

4. Having a crucial person within your business fall ill.

Some of us have more to worry about than just themselves. If you own or manage a business, you may be relying on many key people underneath you to keep your business running, keep it profitable and ensure its managed properly on a day to day basis. If one of these people, say a co-director, a production manager or a reliable member of staff suffers a serious illness, condition or injury, you could be just as stuck as if one happened to you yourself. Key Person Insurance Cover is designed for this circumstance to protect your businesses profits if one of your most crucial employees goes down. 

5. Being stuck overseas due to flight cancellations, injury or natural disasters.

Another one that happened to me recently! After American Airlines cancelled my connecting flight back to Los Angeles, I was left stranded in Pensacola, Florida with no way to make my flight back from the States to Auckland. My case was comparatively minor to cases of people in my life I've known of, but paying for the extra nights hotel, meals and transportation would still have set me back close to $1,000 without travel cover. Other's I've known have had it far worse as the Icelandic Volcano eruption a few years back grounded flights all over Europe for the better part of a week, forcing them to watch as their extra costs skyrocketed. Trust me, being overseas hoping that your plans and schedules will all fall into place seems a lot more of a stretch to me than it did before. 

Thanks for reading! Visit www.sprattfinancial.co.nz for more info.