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

Trauma Insurance - What You Need To Know

A recent article on Good Returns details recent changes by Insurance provider OnePath to their trauma cover.

The article also makes the statement that Trauma Insurance is becoming more popular among New Zealand consumers as a knowledge spreads through the populace that it is more likely to be claimed upon than life insurance.

"General manger of adviser distribution Jeremy Nicoll said it was a product that advisers should be discussing with their clients. “It does provide a good amount of money to help customers when they do have one of these conditions… Customers understand they are more likely to claim. Everyone has a friend who has contracted some form of cancer.”"

In short, for those who don't know, trauma insurance is a form of cover that pays out a lump sum to you if you suffer a critical illness. With the advances in medical technology, it is now highly likely that you will survive these conditions but will then be forced to undergo a period of recovery and rehabilitation where you will be unable to continue work and earn a living. Trauma insurance is thus designed to help you cope with illness and its effects on your family and your lifestyle.

Most providers will give you a full list of the conditions covered. Sovereign for instance, has 44 conditions that are covered, from the most common such as cancers, heart attacks or strokes to more rare conditions such as liver failure, lung disease, paralysis and neurological disorders. For a full list of Sovereign's covered illnesses and the conditions upon each, check out their Living Assurance PDF here.

There is a long list of conditions covered by trauma insurance. Make sure you know which ones are covered before you start and read all policy documents given thoroughly.

Trauma insurance is becoming more popular as the knowledge begins to sink in through first and second hand experience that in this day and age a quick death due to a sudden illness is more and more unlikely. The more likely scenario is a long period of recovery, but if you only have life insurance it will not pay out, leaving you in the lurch at your most stressful time.

With the statistics on critical illness in New Zealand the way they are, it's heartening to see Trauma cover becoming more popular, as it is important, perhaps these days equally as important as life cover (once considered the crucial form of insurance to have). Stay tuned for a future post on extra add on benefits you can add to your trauma cover to get even more out of it, and don't hesitate to ask if you have any questions!

Visit our official website for more information.

Follow us on Twitter.

Why Insurance Matters For Families.

A family unit tends to be just that. A single unit, with many individuals functioning (more or less harmoniously!) as one. Like in a small business, each person fulfills a vital role that the unit can't continue to operate without. Breadwinners go out, work and provide for the family financially, while others contribute to the household, go to school, contribute to the community or help each other out.

Next, let's think about an individual, living alone, providing for his/her own needs single-handedly with no one to take care of but themselves. Most of us are at least a little familiar with the risks of death, critical illness or disability happening to one person. If not, you can read some statistics on critical illness here. When one person is all there is to worry about, for women are facing a one in seven chance of critical illness between the ages of 30 and 60 and for men the chances are one in five (I guess women are more resilient after all!). Protecting yourself against these odds would seem like a worthwhile proposition for most even in this situation. People buy Lotto tickets every week with a one in 100,000 chance of a first division win and think its inevitable it'll happen to them one day, when the chances of a disabling illness are unfortunately hugely more likely!

Critical Illness - Unfortunately much more likely than Lotto.

Unfortunately, for families the situation is even worse. A family is a singular unit that relies on all of its members being healthy and productive for the sake of the group. If both parents for instance are working and require an income to support the family, the chances of one of the pair suffering a critical illness by the age of 60 is an unfortunate one in three. If your family or business relies on three or more incomes, the odds shoot up even further, on to and above 50%. In other words, if you're in a group that relies on the income of 3 or more members, you've got a one in two chance of having one of those members disabled by illness and unable to earn for a protracted period of time, during which regular savings may be insufficient to cover the costs of living and treatment.

So what solutions can insurance provide for families, groups or businesses?  A group medical scheme for instance can be tailored to protect a whole family, paying for any medical expenses that any of its members may need. This option can be cheaper than insuring each family member individually if the right insurer is chosen. Life, trauma and total permanent disablement insurance, through altering the policy ownership details (read more on this here), can be designed to immediately payout to the other members of the group, covering your expenses and creating an artificial income to support you and the rest of the group.

Visit our official website for more information.

Critical Illness Statistics.

How to make sure your policy payouts get into the right hands quickly.

Key Person Insurance Cover

Key Person Insurance is a form of risk insurance that is designed to help out your business if one of your key employees is rendered unable to work due to health issues or disability. This type of insurance cover can be useful for businesses who rely or depend on one or more key employees to maintain profitability. For instance, in our case study of Justin and ABC Engineering, Justin held a key position within the business, with a large proportion of the company's monthly income attributable to his relationships with clients. If you have key person cover, the devastating loss of someone like Justin to illness or disability can be mitigated by a monthly benefit to the business, designed to cover the loss of income your insured employee would have brought you.

Is Key Person Cover Useful?

ACC Research, conducted in June 2006, revealed that a huge 67% of small or medium business closures in New Zealand are due to the injury or disablement of a key person or employee. The same study showed that only 8% of business closures in comparison were caused by the fact that the business became unprofitable or no longer viable, showing that by far, injury or illness is the biggest risk to small business in New Zealand.

Furthermore, we have previously discussed the statistics regarding critical illness in New Zealand, which are applicable here too. 51% of males and 33% of females will suffer a critical illness before the age of 70, and if or when it happens to one of your businesses critical personnel, having an assured monthly flow of income to cover it can help your business survive, recover and prosper again.

How does it work?

- When the cover is taken out, the amount that is paid to you monthly in the event of your employee being rendered unable to work is agreed to, so that you will know specifically the level of benefit you will receive. This amount is of course, negotiable and it can be set based on your personal needs.

- The benefit itself is typically payable for a maximum period of two years.

- It is possible to lower the monthly insurance premium you will pay for your Key Person Insurance Cover by adjusting the length of time you have to wait after your employee is incapacitated before your payment kicks in. The longer period of time this is, the lower your monthly premium will be.

What other features can Key Person Cover Offer?

- Recurrent Disability Allowance: If the key person or employee covered suffers a relapse of the same condition within 6 months, your wait period can be waived so the benefit kicks back in immediately where it left off without a further wait period needed.

- Additional Payment in Case of Death: If the key person or employee covered sadly passes away while you are receiving your monthly key person insurance payment, your business can receive an additional payment of 6 times the monthly benefit to help you cope with the tragic circumstances.

- Changes can be made at anytime to reflect your current needs, and your insurance cover, waiting periods, amount of employees covered can be reviewed and changed at anytime, giving your cover flexibility as your business changes.

If you need more information, have any questions or you would like to get your businesses employees covered, post a comment below or contact us at enquiry@sprattfinancial.co.nz.

Visit our official company website for more.

Check us out on Facebook.

Building a plan to protect your business and estate.

If you are the owner of an estate or you manage a business, have you ever thought about what would happen should a tragic and unforeseen deterioration of your health occurs? As insurance professionals, we have seen it happen all too often. As a result of our experience, the number one piece of advice we could give to home or business owners is to put in place a plan using insurance resources. A well worked and comprehensive insurance plan can re-establish control of your finances, leave your estate in your own hands and restore financial balance for you and your family.
Once something goes seriously wrong with your health, well-being and current financial situation, you should look to achieve the following goals in the face of what may well be your most overwhelming adversity: 

• To have the greatest possible access to medical advice, treatment and technology so that you can get yourself well, back on your feet and hopefully limit the effect of the disablement process on your career, income, lifestyle and dependents;
• To be able to control debt as soon into the disablement process as possible. To eliminate or significant reduce outstanding debts and financial obligations.
• To create a certain source of income that will fund your lifestyle and keep your house and/or your business in your hands.

We can attest to just how difficult this has been for many people who have "gone it alone", mistakenly thinking and backing themselves to carry out many of these tasks and functions after their health has come apart at the seams without the necessary insurance. If you are so sick that you can't actually carry out the many vital roles and functions that still need to be carried out within your business, family and estate, then failure, and devastating failure at that, awaits the unwary and unprepared.
 
Our clear and certain belief is that insurance works best when it is used as the basis for a plan that is intended to protect a business, a family or an estate when tragic deterioration of an individual's health occurs. The three goals listed above can be accomplished by having the right type of insurance in place, customised and personalised to your unique situation.  As insurance professionals, we can help you build the right plan for your unique situation and life circumstances. Our capable team does this everyday and have the soundest professional processes in place. Your personal plan should contain the answer to four questions:

• What needs to be protected?
• Who is to do it?
• What authority do they need to act for you?
• Where does the funding that you will need come from?

We can help give you answers to all of these questions. With the right insurance, the funds you require in your time of need will be taken care of. We can help source the best and most competitive insurance on the market from the most reputable sources. Use our skilled and experienced professionals, construct a plan and shield against the risk of losing your most important assets.

If you need help with your plan to protect your business and estate, don't hesitate to contact us at enquiry@sprattfinancial.co.nz or by calling (09) 307 8200.

Visit our official website for more information. 

Read more about the sobering statistics of critical illness in New Zealand.

Critical Illness: What are the Chances?

One of the main things people want to know regarding insurance are the best researched facts and figures about what circumstances they are likely to face in life, and what they need to be ready for. For instance, if there is a high statistical risk of developing a critical illness that affects one's ability to work and make a living, people tend to seek out cover for themselves, their families or their business. In contrast, if there is a very low statistical risk, people tend to not choose to take on extra monthly cost, making an informed decision that if the chances are low it is best to save their hard earned money.When it comes to Trauma/Critical Illness cover (aka Living Assurance), luckily the statistics are clear and readily available.

1. Between the ages of 30 and 64, one in five men (1/5) and one in seven women (1/7) will suffer a critical illness. This means that a working couple has a one in three chance (1/3) of having one of its members suffer a critical illness.
2. In 2009, 20,875 new cases of cancer were registered in New Zealand.
3. The advances in treatment and medicine mean that 52% of male cancer patients and 59% of female cancer patients will recover and be alive five years after diagnosis.
4. The University of Auckland has revealed a 40% decline in the number of deaths after a stroke, however the surviving patients as a result suffer from an increased number of impaired level of consciousness and mobility following strokes.
5. Only 6% of deaths in New Zealand annually are accidental or sudden. 94% come after a protracted disablement process, during which time it is highly likely that income and career trajectory will be affected.

Taking these facts into account, it becomes clear why it is necessary to have a plan and cover that is adaptable to the circumstances as they are. It is up to you whether or not you feel the risk is worth taking, however if you decide it is not and you want to be protected, there is one more thing to think about. Insurance can be complicated, and getting a simple plan together may not be comprehensive enough to protect from what has proven to go wrong with New Zealanders.

We know it is a daunting process and involves a lot of intensive research, so feel free to take advantage of our intensive knowledge base and ability to get the best deals from the insurance providers based on your specific needs and life circumstances. We can go to work for you and make sure you are covered.

Email us today.

Like us on Facebook.

Visit our company website for more information.