The Public Healthcare System in New Zealand and What it Means for Your Private Insurance Decisions

New Zealand's healthcare system is renowned in the rest of the world for its comprehensive public healthcare services. However, is it as rosy as some people may think?  This article aims to shed light on how the existing public healthcare system should affect your private health insurance choices and why having additional cover can be beneficial.

Understanding New Zealand's Public Healthcare System

New Zealand operates a publicly funded healthcare system. This system provides residents with access to essential health services free of charge or at a subsidized cost. Funded primarily through taxation by the government, it covers a wide range of services, including hospital care, emergency treatment, and primary healthcare through General Practitioners (GPs).

While the public system offers significant benefits compared to other places in the world; there are still areas where private health insurance can provide substantial advantages.

The Role of Private Health Insurance

Private health insurance in New Zealand complements the public system by covering services and treatments that are either not fully covered or come with lengthy wait times in the public system. Here are some key areas where private health insurance makes a difference:

Reduced Waiting Times: 

One of the primary benefits of private health insurance is the reduction in waiting times for elective surgeries and specialist consultations. As we have seen over the past few years, patients can face wait times of several months for procedures in the public system, which can seriously impact outcomes and quality of life. Private insurance allows for almost immediate access to these services when and where you need them.

Access to a Broader Range of Treatment Choices:

Private health insurance covers treatments and medications not available through the public system. This includes advanced medical procedures, specialized surgeries, and cutting-edge drug therapies.

Choice of Healthcare Providers:

With private health insurance, individuals have the freedom to choose their preferred healthcare providers, including their own specialists and surgeons. This flexibility can often lead to a more personalized and satisfactory healthcare experience.

Real-Life Examples

Case Study 1: Sarah’s Knee Surgery

Sarah, a 45-year-old Auckland resident, experienced chronic knee pain and was diagnosed with a condition requiring surgery. The public healthcare system estimated a wait time of 6 months for her surgery. Concerned about the impact on her daily life, Sarah opted for treatment through her private health insurance provided by Southern Cross. Through her Wellbeing policy, she was able to schedule the surgery within a month, significantly improving her quality of life and recovery time.

Case Study 2: A $169,000 medical claim processed by Spratt Financial Services.

The claim in question involved a myriad of medical and surgical procedures, a hospital stay, recovery and scans each carrying a substantial price tag. The breakdown of the expenses serves as a testament to the diverse and expensive nature of the care you may need at any time that you may not be able to afford out of your own pocket: Read more specifics of this case here.

Key Facts and Figures

• According to the New Zealand Ministry of Health, only 30% of New Zealanders have some form of private health insurance.
• A study by Health Funds Association of New Zealand (HFANZ) revealed that private health insurance funds paid out over NZD 1.4 billion in claims in 2022, highlighting the extensive support provided to policyholders.
• The Commonwealth Fund ranks New Zealand’s public healthcare system highly for its efficiency but notes the challenges in wait times and access to specialized care.

Making Informed Health Insurance Decisions

When considering private health insurance, it’s crucial to evaluate your specific needs and how they align with the services covered by the public system. Here are some tips:

1. Assess Your Health Needs:

   • Consider your current health status, family medical history, and any potential future health concerns. This will help you determine the level of cover you need.

2. Compare Policies:

   • Not all health insurance policies are created equal. Compare different plans to find one that offers the best coverage for your needs at an affordable premium.

3. Seek Professional Advice:

   • Consult with a financial advisor or insurance broker. At Spratt Financial Services, our experts can guide you through the process, ensuring you make informed decisions that provide peace of mind.

Conclusion

New Zealand’s public healthcare system provides a strong foundation for health services, but private health insurance offers valuable enhancements that can significantly improve access to care and overall well-being. Understanding the interplay between public and private healthcare options is essential for making the best health insurance decisions.

At Spratt Financial Services, we are committed to helping you navigate these choices with confidence. Contact us today to learn more about how we can tailor a health insurance plan to meet your unique needs.

Contact Spratt Financial Services:

• Phone: 09 307 8200
• Email: enquiry@sprattfinancial.co.nz
• Website: www.spratt.co.nz
  
  

Securing Your Family's Future: The Role of Life Insurance in Financial Planning

Life can be unpredictable, and while we can't foresee every twist and turn, we can certainly do something to prepare for them. One of the most vital steps in ensuring your family's enduring financial security is incorporating life insurance into your financial planning. This might seem like a daunting task, but it’s more straightforward than you might think especially with the right advice. Let's break down why life insurance is crucial and how it can secure your family's future without breaking the bank.

Why Life Insurance?

Life insurance is about more than just a policy that pays out to your loved ones or dependents in the event of your passing. Knowing that your loved ones will be financially secure if something happens to you can be a tremendous relief in the here and now, and let you enjoy the precious times with less burden and worry on your mind. Here are a few reasons why life insurance is a cornerstone of sound financial planning:

• Financial Protection: Life insurance provides a safety net that ensures your family can maintain their standard of living, cover daily expenses, and pay off debts like mortgages or loans.
• Debt Coverage: If you have significant debts, life insurance can help prevent these from becoming a burden on your family and pay them off completely. This can be where professional advice can benefit you even further, as it can tell you exactly what sum-assured your policy should have to ensure your debts and responsibilities are fully covered.
• Education Funds: It can ensure that your children’s education funds are secure, even if you’re not there to contribute.
• Income Replacement: It helps replace lost income, so your family doesn’t have to worry about where the next paycheck will come from.

Types of Life Insurance

In New Zealand, there are several types of life insurance to consider, each with its unique benefits:

• Term Life Insurance: This is the most straightforward type. It provides coverage for a specified period (the term), and is typically more affordable. If you pass away during the term, the policy pays out to your beneficiaries.
• Whole of Life Insurance: This type of policy covers you for your entire life and includes an investment component. It can be more expensive, but it builds cash value over time. This is usually an older style of policy and may not be as prevalent in the marketplace anymore.
• Trauma Insurance: Also known as critical illness insurance, this pays out a lump sum if you’re diagnosed with a specified serious illness. It’s designed to help cover medical costs and provide financial support during recovery.

How Much Coverage Do You Need?

Determining the right amount of coverage depends on several factors and can be aided by consulting with an insurance professional:

• Current and Future Expenses: Consider your family's daily living expenses, future education costs for your children, and any outstanding debts.
• Income Replacement: A common rule of thumb is to have a policy that covers 10-12 times your annual income, but your personal circumstances can always be different from the norm and everybody needs to consider things slightly differently.
• Long-term Financial Goals: Think about your family's long-term financial needs and goals. This might include retirement funds for your spouse or setting up a trust for your children.

Choosing the Right Policy

Selecting the right policy might seem overwhelming, but here are a few tips to help you navigate the process:

• Consult with an Insurance Adviser: An experienced insurance adviser like us can provide tailored advice based on your specific needs and circumstances. Advisers can also provide claims management when the time comes to claim on your policy to take the stress out of your family's hands.
• Compare Policies: Look at different policies from various providers to find the best fit. Consider factors like coverage amount, premium costs, and policy terms.
• Review Regularly: Life changes, and so do your insurance needs. Review your policy regularly to ensure it still meets your needs, especially after major life events like marriage, the birth of a child, or buying a home.

Imagine the peace of mind knowing that your partner won’t have to sell the family home to make ends meet, or that your children's education won’t be compromised. Life insurance isn’t just about preparing for the worst; it’s about ensuring the best possible future for your loved ones.

Life insurance plays a pivotal role in financial planning, providing security and peace of mind for you and your family. By understanding the types of coverage available and determining the right amount for your needs, you can take a significant step toward securing your family's future.

At Spratt Financial Services, we're here to help you navigate the complexities of life insurance and ensure you have the coverage you need. Let’s work together to safeguard your family’s future.

Top 7 Insurance Myths Exposed: Common Misconceptions About Insurance Coverage in New Zealand

Insurance is a crucial component of financial planning, yet there are many myths and misconceptions surrounding it - myths that the Spratt Financial team have encountered countless times over our 30 years in operation. In this article, we aim to debunk some of the most common myths about risk insurance coverage (life, health, income protection, mortgage coverage, permanent disability etc) for Kiwis.

• Myth 1: Insurance is Only for the Elderly or Unhealthy

  • Reality: Insurance is for everyone, regardless of age or health status. From our 30 years of claims experience - accidents and illnesses do not discriminate by age and can happen to anyone at any time, sometimes with no warning signs whatsoever. Having tailored insurance coverage to the risks you actually face provides a crucial safety net for individuals and their families in times of need.

• Myth 2: Insurance is Too Expensive

  • Reality: While insurance premiums may seem costly at first glance, the financial consequences of not having insurance can be far greater. Insurance premiums are based on various factors, including age, health, occupation, and coverage amount, and there are often options available to tailor aspects of your cover to fit within most people's budget. You have nothing to lose by seeing what an adviser might be able to help you put together!

• Myth 3: I Don't Need Insurance Because I Have Savings

  • Reality: While savings are no doubt important, they may not always be sufficient to cover unexpected expenses resulting from accidents, illnesses, or other unforeseen events. While some believe that illness or accident is likely to result in either a quick recovery or be fatal, the reality is in most instances it results in a protracted disablement process. Over a potentially long term period of recovery where you are unable to continue earning a living - insurance can provide a means to protect savings and assets from being depleted in times of crisis.

• Myth 4: Insurance Doesn't Pay Out When You Need It

  • Reality: Insurance companies have a legal obligation to honor valid claims made by policyholders. And if you're with a specialist adviser such as us, we have a 99% successful claims record over our decades of operation in the NZ marketplace. As long as the policyholder has met the terms and conditions outlined in the policy, such as paying premiums on time and providing accurate information, legitimate claims are typically processed and paid out promptly.

• Myth 5: I'm Covered by ACC, So I Don't Need Additional Insurance

  • Reality: While ACC (Accident Compensation Corporation) provides coverage for accidents and injuries sustained in New Zealand, it does not cover all types of disabilities or illnesses. Additionally, ACC benefits may not be sufficient to replace lost income or cover ongoing expenses.

• Myth 6: I Don't Need Insurance Because I'm Young and Healthy

  • Reality: While youth and good health may reduce the risk of certain health issues, accidents and unforeseen events can still occur at any age. We've seen it happen time and time again. Securing insurance coverage while young and healthy can also result in lower premiums and fewer exclusions for pre-existing conditions. One of our staff was lucky enough to secure health insurance for himself at the age of 18 when he was young and healthy. A mere two years afterward, he was diagnosed with serious Crohn's Disease. Having the cover has over the forthcoming ten years saved him close to $60,000 in surgical, diagnostic and treatment costs and the premium he pays monthly is half of what it would be if he had taken out the policy after his diagnosis.

• Myth 7: Insurance is Complicated and Confusing

  • Reality: While insurance policies may contain legal language and complex terms, insurance advisers are available to help individuals understand their options and make informed decisions. Working with an experienced adviser can simplify the process of selecting and obtaining the right insurance coverage tailored to individual needs and circumstances.

By debunking these myths and working together with free professional insurance advice, individuals can make informed decisions to protect themselves and their loved ones with appropriate insurance coverage. Remember, insurance is a valuable tool for financial security and peace of mind, and it's never too early to start planning for the future.

The Importance of Medical Insurance: A $169,000 medical claim case study

In the unpredictable journey of life, unforeseen medical emergencies can quickly become financial disasters. Private Medical/Health Insurance is invaluable to have when faced with the exorbitant costs associated with comprehensive healthcare and getting you back on your feet. Spratt Insurance Brokers recently processed a medical insurance claim that exemplifies the significance of having adequate coverage, providing a stark reminder of the potential financial devastation without it, one of the highest claims ever processed by our agency (specifics and personal details have been withheld). The claim in question involved a myriad of medical and surgical procedures, a hospital stay, recovery and scans each carrying a substantial price tag. The breakdown of the expenses serves as a testament to the diverse and expensive nature of the care you may need at any time that you may not be able to afford out of your own pocket:

• Firstly, a Magnetic Resonance Imaging (MRI) was performed, incurring a cost of $2,870. This diagnostic tool is crucial for detailed imaging and diagnostics, but its expense highlights the financial challenges patients may face without insurance coverage.
• A Computed Tomography (CT) scan came with a price tag of $850. These imaging techniques are essential for accurate diagnosis and treatment planning.
• The heart of the claim lay in the surgeon's fee, a whopping $58,650. Life-saving surgical interventions can be financially crippling without insurance, making it clear that comprehensive coverage is indispensable in times of medical crisis.
• Intensive Care Unit (ICU) expenses amounted to $2,405.01, underlining the fact that even brief stays in specialized units can lead to astronomical bills. The peace of mind offered by medical insurance becomes apparent as it shields individuals from such financial strain during critical periods of recovery.
• The anaesthetist fee, totaling $30,797, showcases the multifaceted costs associated with surgical procedures.
• Implants, costing $5,995.61, and hospitalization expenses, including room and medical supplies, amounted to a staggering $68,000.26.

Spratt Insurance Brokers, understanding the significance of robust coverage, ensured that the entire medical bill of $169,567.88 was paid in full. This example serves as a poignant reminder of the financial protection that medical insurance provides, alleviating the burden of healthcare expenses and allowing individuals to focus on recovery rather than financial distress. If you are interested in sourcing the best in medical insurance for yourself, your family or a group scheme, our professional adviser team would be happy to assist.

Visit our official website for more information. Request a free quote or meeting on your Insurance needs.

Smart Strategies for Creating a Holiday Budget

The summer holiday season for us Kiwis is a time of joy, celebration, giving and BBQ on the beach. However, it's also a time when expenses can quickly add up, leaving many of us facing financial stress in the new year. To ensure a festive season without breaking the bank, creating an effective budget can be critical. In this article, we'll explore some smart strategies to help you create a budget that allows you to enjoy the holidays without compromising your financial well-being.

1. Assess Your Financial Situation:
Begin by evaluating your current financial standing. Take stock of your income, regular expenses, and any outstanding debts. Understanding your financial baseline is the first step in creating a realistic budget.

2. Set Clear Spending Limits:
Determine how much you can afford to spend on holiday-related expenses without jeopardizing your financial stability. Establish specific spending limits for gifts, decorations, food, and entertainment. Be realistic about what you can comfortably afford.

3. Create a Detailed List:
Compile a comprehensive list of all anticipated holiday expenses. Include everything from gifts and wrapping paper to travel and festive meals. Having a detailed list will help you allocate funds more effectively and reduce the risk of overspending. Then compare the actual levels of spending once they occur to your projected figures and calculate whether you are over or under-budget.

3. Prioritize Spending:
Identify the most important aspects of the holidays for you and your loved ones. Allocate a larger portion of your disposable budget to these priorities, ensuring that the essential elements are covered before moving on to less critical items.

4. Consider Homemade and DIY Gifts:
Get creative with your gift-giving by considering homemade or do-it-yourself (DIY) presents. Not only can these be more meaningful, but they also often come with a lower price tag. This approach adds a personal touch while keeping costs in check.

5. Take Advantage of Sales and Discounts:
Keep an eye out for holiday sales and discounts both online and in-store. Black Friday and Cyber Monday, for example, are prime opportunities to snag deals on gifts and decorations. Planning ahead allows you to take advantage of these promotions without succumbing to last-minute impulse purchases.

6. Use Cash Instead of Credit Where Possible:
While credit cards can be convenient, it's easy to lose track of spending when using plastic. Consider using cash for your holiday purchases to maintain better control over your budget. This way, you'll be more aware of how much you're spending and less likely to overspend. Plus, credit card debt incurs interest over time which cash purchases do not, so over the long haul, you'll be reducing your unnecessary spending on interest payments.

7. Start Early and Shop Strategically:
Begin your holiday shopping well in advance to avoid the stress of last-minute rushes. By spreading out your purchases, you can take advantage of sales and avoid the temptation to make impulse buys due to time constraints.

8. Plan Potluck Gatherings:
If you're hosting holiday events, consider making them potluck-style. This way, the financial burden of providing all the food and drinks doesn't fall solely on your shoulders. Encourage guests to contribute a dish, making the celebration more inclusive and cost-effective.

9. Review and Adjust as Needed:
Periodically review your budget throughout the holiday season. If you find that you're exceeding your planned spending in one area, consider adjusting allocations in other areas to stay within your overall budget.

With thoughtful planning and disciplined spending, it's entirely possible to have a joyful holiday season without overspending. By creating a realistic budget, prioritizing spending, and taking advantage of cost-saving strategies, you can ensure that the festivities bring happiness without the financial hangover in the new year. Cheers to a budget-friendly and joyous holiday season, merry Christmas and a Happy New Year!

The Insurance Advice We Give

With over 30 years of experience in the insurance field, our team specialises in problem-solving to ensure your financial independence remains intact during unexpected events and especially during challenging health situations.

In partnership with professionals and your own personal insight, along with trusted Solicitors and Accountants, we can create secure financial structures around your assets, ensuring your long-term plans are safeguarded.

When facing the uncertainties of disablement due to medical conditions, your reliance on earned income can be severely threatened. Maintaining your financial independence and funding amidst health challenges is paramount for your goals and your future. Here are the key factors we focus on to establish and regain control when faced with the disablement process:

1. Swift Access to Medical Support: Private medical insurance ensures immediate access to necessary medical advice, treatment, and technology without delay, providing peace of mind during critical times.
   
   
2. Control Your Debt Arrangements: We can help you be able to continue to service your loans in the early stages of disablement, reducing them significantly if your health continues to deteriorate and finally eliminating all debts in the event of your untimely impending or actual departure. This is where monthly mortgage repayment cover fits, along with lumpsums that pay out when a critical illness/condition is diagnosed, or if your disability becomes permanent.
   
   
3. Securing Artificial Income: Your ability to access a source of income becomes invaluable when earning your own living becomes impossible. This is where income protection fits, providing a stable source of income, enabling you to support dependents, completing retirement savings, and covering daily living expenses, ensuring your long-term projects stay on track.
   
   

Navigating the disablement process can be unpredictable, and it needs a more thorough set of appropriate structures and advice than many people think. By establishing proper structures, seeking expert advice, and selecting suitable insurance options, you regain control. Once control is regained, the Consolidation Stage begins as life continues, allowing your life to be addressed, resourced and funded as it continues.

The truth is that a holistic approach to the disablement process is necessary because, in our experience, the process is never predictable and never unfolds as you might expect. With our long term structured approach and comprehensive claims management we can ensure that your debt payments are met, solvency is established and ongoing needs are provided for. This can involve a complex claims process with multiple steps, which our service helps navigate for you. We take into account every facet of your needs from the lens of experienced industry professionals and help provide you with what you actually need at claim time, with no mistaken assumptions.

We specialise in a personalized approach, tailored to your unique situation. Let's meet to assess your current situation, evaluate existing resources, and discuss tailored solutions. We can and will also review Allied Professional Advice, existing structures like wills, trusts and guardianships, ensuring you and your dependents are well-prepared for the future.

Talk to an Adviser today.