Do you need trauma insurance?

Did you know:

1. 52 people are diagnosed with cancer everyday in New Zealand.

For many of us who only have basic life insurance or medical insurance, this could be a catastrophic event not only healthwise but financially. Lost income through work and the cost of care spiral upwards quickly, especially if you are the family's sole breadwinner and savings can be rapidly depleted. Upon diagnosis of a critical condition like cancer though, trauma insurance will pay out its entire sum assured to help you and your family financially through your tough times. For this reason, we recommend considering it thoroughly.

Furthermore,

2.  Although cancer rates are increasing, deaths due to cancer are decreasing.

The rate of death from cancer has fallen 16.2% in the period between 1999 and 2009. This reflects the continuing advances in treatment. As our population ages, the increase in cancer will continue, with a great proportion of those surviving the disease which is great news. However, once more, it brings into focus how costly a battle with cancer can be for an individual or family.

3. Between the ages of 30 and 65, one in five men and one in seven women will suffer a critical illness which trauma cover could insure them for.

This means that a working couple has a one in three chance of having one its members suffer a serious malady before New Zealand's current retirement age. Are you prepared?

4. 1 in 20 New Zealand adults have been diagnosed with heart disease. That totals a huge 165,000 New Zealanders.

5. A considerable number of less serious conditions and procedures entitle you to a full or partial trauma insurance claim payout.

Whilst you can certainly claim upon your full trauma cover for diagnosis of serious heart disease or when you undergo a major heart operation, many can be unaware that less serious procedures or conditions can be partially covered too. A friend recently found to his surprise that he was entitled to a payout of half of his sum assured for having a stent inserted into his artery (a relatively common procedure). The surgery itself was covered by his health insurance, so the trauma payout helped him pay outstanding bills and provided an unexpected boon to his finances. Read more about his story here.

6. The average age of a Trauma Insurance payout is 47.

This is considerably younger than most people expect to go through a serious health condition. As an average figure too, many payouts occur even younger than that.

7. 21 New Zealanders a day have a stroke.

Approximately 35% of stroke victims are aged under 40.

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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.

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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.

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Study: New Zealanders heavily under insured.

 "A two-year Massey University study has shown New Zealanders are under-insured by $650 billion.

Lives were under-insured by $195.609 billion, permanent disability protection was lacking by $351.827 billion and income protection was under insured by $2.966 billion per month.

About 2000 respondents filled out an online survey that asked questions about their insurance cover, perceived needs and their reasons for not having more insurance.The research found most New Zealand families had high levels of vulnerability to medium or long-term disability as a result of underinsurance. 

FSC chief executive Peter Neilson said the research highlighted serious financial risks
More than half the respondents said they were suspicious of insurance companies and 43% found insurance jargon difficult. About 60% thought finding personal risk insurance was too hard.

Particularly among younger respondents, there was a view that it was too difficult to know what level of insurance was needed.

Others thought Government assistance would cover them in the event of an accident or illness that kept them off work.

But almost half said having the right level of cover was important to them."

- Taken from an article by Susan Edmunds (Original Article Here)

This article made the news quite a bit last week, and for good reason. The numbers themselves ($650 billion in total! That is nine times the entire national debt as of 25/2/2013!) reflect a profound disconnect between New Zealanders and their insurance needs. The survey itself shows that a lack of knowledge and the demands of finding insurance is a critical factor in so many New Zealanders being under insured.

We are glad this issue is getting some national exposure, because it highlights what we have been seeing internally for some time; that when things go wrong, the real financial needs of people are not managed due to inadequate cover and they find themselves in dire straits that could have been avoided.

Our business specialises in taking the difficulty out of securing insurance that actually meets your real life needs and doesn't leave you under insured or bearing unreasonable costs. If you are one of those 60% who are finding insurance difficult to attain, we have the experience to take the stress out of your hands and make sure you are not one of these unfortunate statistics, and that you have financial peace of mind if tragedy strikes.

Make an enquiry about your insurance needs today.

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Insurance Advice: Why just Life Insurance may not be enough.

In our experience, there are several crucial mistakes that people tend to make when attempting to secure their own insurance plan. Some of these mistakes can result in catastrophic financial circumstances if something goes wrong with their health or they find themselves facing physical disablement. We definitely don't want to see that happen! A lot of these mistakes are based around incorrect assumptions about insurance and the true circumstances they may face with their health.

One of the most critical mistakes we often see is that people tend to assume that basic life cover, designed to pay out upon impending or actual medical death is sufficient to cover their financial needs. Coupled with this is an assumption that tragic health issues tend to arise quickly and result in a relatively quick passing, such as through cardiac arrest or in an accident.

Unfortunately, the official statistics provided by New Zealand Health Information Services  do not favor such assumptions. New Zealand has an official death rate of around 30,000 per year. Sudden deaths through accidents account for only 6% of total deaths per annum. This amounts to a mere 2,700 out of 30,000 deaths. A huge 94% of all deaths are due to medical problems or illness; a huge 28,200 out of 30,000 deaths.

As we can see from this graph, in the majority of cases, the reality of the process is much different than most people expect. At the point on this graph where one finds themselves disabled by illness and no longer able to work, typical life insurance designed to pay out on impending or actual death will not kick in, all the while you still have to face the crippling burden of a mortgage, rent, electricity, food and debt management with no regular income to depend upon.

There is a solution to this, it just takes a little time to sit down, plan out your real needs and design a plan that will cover your real needs, not just your assumed ones. Perhaps the solution is a broader plan, with lesser life insurance but added trauma cover or Total Permanent Disablement cover. There is no one size fits all solution, and that's why we recommend talking to a professional before you commit to purchasing insurance. We can take you through your personal financial situation and get you the right insurance cover to make sure you and your family are protected, for the most competitive prices on the marketplace. Our service is completely free and no-obligation!

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