Why You Need an Insurance Plan

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 do you really need the Insurance 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. Also, 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 policy 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 our professional team and we can help you determine the amount you need.

4. Do you know the right type of Insurance you need?

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 Spratt Financial Services - 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 unwarranted 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 hundreds of 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 wholeheartedly that you use our experienced professional advisers to not only design and review your underlying insurance 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. Use our experienced professionals if you need guidance or advice - our service is completely free and no obligation, so you have nothing to lose!

Contact our team for a free, no obligation chat today.

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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.