Monday, October 19, 2015

Insurance Advice and Tips

Insurance works best when it is used as the foundation for a plan that will protect a business, family or estate that is confronted by the disablement process. If you already have an insurance package (or you're looking for insurance) and you want to know whether your insurance will really be sufficient for your needs, here are the questions you should know the answers to:

1. What Will You Need The Cover For?
We recommend that you grab a pen and paper and write down what your insurance claim proceeds will need to be used for when it is paid out. If you can't do this now before tragedy strikes then you may be facing trouble later. Having this list in place can give you a reminder of where the money needs to go when it comes time to claim. With insurance, it's always better to be safe than sorry. 

2. Will You Be Able To Claim Soon Enough?
Life Insurance pays out in the event of actual or impending "medical death". However, in 94% of cases in New Zealand, deaths are due to medical conditions not accidents. 65% are these are due to degenerative medical conditions such as cancers, heart disease and strokes which can kill slowly over what may be an extended period of time. During this time, unable to work and unable to support yourself, your family or your business, you will be facing tremendous financial strain which your insurance may not cover for. Will the bank or your creditors wait until you are terminally ill before your life insurance cover pays out? This is perhaps the most crucial consideration to take into account when assessing your insurance. We can help you ensure that you are fully covered financially in the face of these worrying statistics as unfortunately, basic life cover is most of the time, simply not sufficient.

3. Is The Sum-Assured of Your Insurance Enough?
It may sound strange, but a $250,000 insurance claim may not be enough to repay a $250,000 debt. You may have additional interest payments, penalties for being in arrears and you may need to pay a Solicitor, Trustee or your Accountant to carry out these transactions for you. It is crucial that you set your sum assured at the right amount to cover your debt and provide adequately for your family and dependants should something happen to you. Take into account all factors, costs and if necessary, talk to us and we can help you find the amount you need.

4. Do You Have The Right Insurance?
If you have income protection insurance - do you have the right kind? If you have health insurance - what does your health insurance actually cover and what do you need it to? If you have permanent disability or critical illness insurance - how are these insurances structured within your overall portfolio of insurance and how will they work if something happens to you? The bottom line is, you need to figure out what risks you are most likely to face, take into account your lifestyle and your financial situation and then select the right insurance to meet your individual needs. This is why it's so important to have robust insurance advice from insurance professionals like us - we can find out what's right for you. Sometimes having the wrong kind of insurance is almost as bad as having no insurance at all.

5. Are You Making Assumptions About Your Insurance?
Making assumptions about your insurance without proper and solid research and planning is always a mistake. Even assuming that you or someone close to you will be physically, mentally and emotionally capable of applying the claim proceeds to your predetermined targets is not supported by our experience of dealing with over 200 insurance claims. Question everything, and get a second opinion from insurance professionals to make sure you've got it right.

6. What Should You Do?
We recommend that you use experienced professional advisers to not only design and review the underlying plan, but to execute it and carry out the tasks they are best suited to handle. If you don't have a plan now, prepared with clear-headed purpose, then any insurance you do have may well be insufficient or not adequately fit to your unique needs. Remember that if in doubt, you can always use our experienced professionals if you need guidance or advice - our service is completely free and no obligation, so you have nothing to lose!

Monday, October 5, 2015

Insurance Frequently Asked Questions (FAQ)

Spratt Financial Services presents our new and updated list of the most common insurance questions we receive and our answers to them. 

1. Do I really need risk insurance?

Health Insurance: Although it may seem easy to adopt a standpoint of ‘it won’t happen to me’ as it relates to insurance, it is an unfortunate statistical fact that you will require hospitalisation, surgery or medical procedures at some point in your life, in many cases more than once. Within the current medical system, the only way to ensure that you and your family will receive the treatment you need promptly and without throwing your finances into turmoil is by taking out health insurance.
Life Insurance: If you are the breadwinner of your family, or you want to make sure your loved ones are supported in the event of your passing, some form of life insurance is a necessity. Unless you have an extremely significant amount of savings to cover all of your debt and provide for your dependants as long as they will require, we believe that you should always have a life insurance policy in place. The risk is not worth taking.

Income Protection and Disability Insurance: People sometimes operate under assumptions that severe illness will result in recovery or a relatively quick passing away. Unfortunately, that is most often not the case. The large proportion of cases of serious illness (heart attack, strokes, cancer etc) result in a protracted period of physical disablement, during which time you will be unable to work and maintain the income necessary to cover your expenses - which will not be on hold until you to get better! This is why income protection and/or permanent disability cover can be essential if your family depends on your income to maintain their way of life. With the right cover, you can have the peace of mind that your income will be maintained in the event that tragedy strikes.

Key Person Insurance: If you run a business and your business prosperity relies on several key employees or directors, key person insurance is a very good idea. It will provide compensation for their loss if they are disabled through illness or injury and support your business financially until an adequate replacement is found and the business is back on its feet. In some instances, proper key person insurance can be the difference between a business surviving or having to shut down.

Although cover may seem unnecessary from a short sighted mindset
, the alternative of having to bear the burden of excessive treatment expenses, leaving your family without a solid income or unable to maintain their life in the event of your passing makes the cost of premiums a small price to pay.

2. What types of insurance can you provide?

Spratt Financial Group can offer all types of risk insurance for both individuals and businesses/corporations, no matter what the size. This includes: 
  • Life Insurance
  • Medical/Health Insurance
  • Trauma Insurance
  • Income Protection and Redundancy Cover
  • Mortgage Protection Insurance
  • Key Person Insurance Cover
  • Total Permanent Disablement Insurance
Spratt Financial Group can also provide a full range of fire and general insurance, including home, contents, vehicle insurance, business stock/vehicle/building insurance, pet insurance, travel insurance and liability cover.

3. I can't afford every type of insurance - which ones are most important?

For most people, it is simply unfeasible financially to have every possible form of risk insurance available. As such, it becomes a question of discerning which ones are most important for you to have. The answer to this will differ based on your personal situation and our team can discuss this with you more fully at any time if you wish. However, in most circumstances, we recommend at least a basic combination of medical insurance (to insure that any medical procedures you need are covered) and life insurance (to provide for your dependants if something should happen to you). If you have room for more in your personal budget, trauma insurance and/or income protection can provide you with good peace of mind if you were to suffer a protracted illness that renders you unable to earn a living.

4. Are there any cheaper forms of risk insurance?

If you are looking to save money on your insurance, there are certain more specific and less costly options available to you. For example, if you cannot afford a full income protection policy, redundancy cover is a cheaper alternative (although it will only cover your lost income due to being made redundant). Another less expensive option is mortgage repayment insurance, which will cover your mortgage payments if you are disabled and cannot earn an income. As you can see, these are more specific forms of insurance, but they do come with considerable savings in premiums compared to regular income protection or trauma insurance policies. 

5. Are there any other options to save money on my insurance?

Yes there are. Spratt Financial Services can offer you many avenues to save money on your insurance. Firstly, with our healthy relationship with New Zealand's top insurance providers, we can often negotiate better deals for your cover than you will find alone. Also, many people can end up paying more than they need to be for their insurance by not having the right sum assured or the right type of cover for them altogether. Our insurance brokers will take the time to find out your personal circumstances and secure the right cover for you at the lowest prices available.

6. Health Insurance: Which type of Health Cover is best?

The primary benefits of having health or medical insurance are guaranteed protection from the risk of having to pay for your own treatment, as well as obtaining the best possible care with the least amount of delay or stress. In general, for most cases, a hospital and surgical combined with a tests and specialist policy will provide you with a basic and effective level of cover. We also specialise in more specific insurance plans covering optical and dental expenses, and also routine GP visits and checkups. As to which specific plan is the best for you, there are a number of variables which our advisers are more than capable of explaining personally in a thorough and understandable way. Feel free to get in touch with us and we can talk you through the options that are best for you.

7. Health Insurance: Are there alternatives to Health Insurance?

Not really. Although it may be tempting to think that you could save the money you would normally pay into a medical insurance policy for possible future use, the levels of medical inflation means that an investment would need to grow at an unrealistic rate to keep up. Obviously there is a chance that you could go through your entire life without ever making a claim (which would be a good thing) but there's also the possibility that you need to make several significant claims.

8. Trauma Insurance: Which medical conditions will allow me to claim?

In our experience, many New Zealanders who have trauma insurance could make a substantial claim which could help their finances tremendously and are unaware that they qualify. Your trauma insurance policy will tell you exactly what claim you are entitled to and which conditions will make you eligible. For the most specific list of these conditions, please consult your policy wordings. A list of conditions could include:

Cancer (including malignant tumors), angioplasty, aortic surgery, cardiomyopathy, coronary artery bypass surgery, heart attacks, cardiac arrest, alzheimer's disease, coma, dementia, encephalitis, major head trauma, meningitis, motor neurone disease, multiple sclerosis, muscular dystrophy, stroke, paralysis and loss of functionality, loss of hearing, loss of sight, loss of speech, loss of use of limbs, advanced diabetes, liver failure, lung disease, renal failure, HIV, major burns, major transplant surgery.

If you're unsure what these conditions entail or if you qualify, you can ask us anytime and we'll be happy to help.

9. Which Insurer provides the best Health or Life Insurance policy?

The answer to this question will vary depending on your own personal needs from your insurance plan. There are a number of factors which need to be taken into account when choosing a provider. Every company is slightly different in the way that it structures its cover. For instance, some companies base their premiums on the age of the youngest adult covered, some have ‘per-child’ premiums, whilst others have a flat rate no matter how many children are covered.  Companies also differ in the way they process claims for procedures (health insurance) or in the event of the policy holder's death (life insurance). This is why the service we provide can be so beneficial to you, as our knowledge of each company is unmatched, and taking your personal situation into account, we can quickly and easily find the best insurance option for you.

10. Should I choose an excess?

Adding an excess to your policy can have practical benefits in the long run, as most companies offer a discount on the monthly premium for doing so. This saving, over time, can add up to a significant total over the course of several years. Furthermore, it is an unfortunate fact that premiums will continue to increase over time. Adding an excess is one of the options we can provide you in order to mitigate these increases, keeping your insurance costs manageable and saving you money.

11. What if I need to make a claim?

We pride ourselves in providing the best and most comprehensive claims service in the country. We know that the paperwork and procedures involved in claims can be burdensome, especially during your most stressful times. Fortunately, you can leave all your claims in our capable hands and we will get you the results you need in the quickest and easiest way possible for you. We promise that with us, your insurance claim will be as easy and stress free as possible.

12. How much will my insurance premiums increase over time?

This will depend on the choice of company, and will be taken into account in our initial consultation with you. Some have age-related premiums increasing each year, whereas others calculate premiums on five year age bands. Regardless of how often these age-related increases are applied, you can expect to receive an increase every year or so to reflect higher than expected claims (company wide rather than specific to you) or to take the rise in medical costs into account. Factors that contribute to higher claims costs include:
  • Restricted access to public health care.
  • New medical technology (more costly to provide).
  • An aging population (with higher average claims amounts).
  • Rising medical inflation (increasing consultation, treatment and equipment costs).
Increasing premiums are a necessary fact of life in terms of insurance, however we can provide several strategies in order to lessen these costs. These strategies can include adding an excess, shifting insurance providers or making policy adjustments, always ensuring your best interests are our top priority.

13. I'm applying for insurance - do I need to remember details of my medical history?

It is necessary that you can recall as much as you can of your significant medical history. The main thing when completing an application for insurance is to disclose as much as possible of any past medical treatment or consultations. Failure to do so could impact claims on your insurance policy.

14. How do I get started?

For more information on how Spratt Financial's team of insurance brokers can assist with managing your insurance programme, use our contact form here or contact us by email at You can also call us any time at 09 307 8200.