How medical insurance spared me from disaster.

This is a story from my own life, about how having medical insurance saved my financial situation during my time of need. I must admit that before this came up, I balked a little at having to pay monthly premiums for something that I at the time was apparently getting no benefit from. Now I know better, and I hope my story can help convince you to get protected too to spare you from the financial hardship that almost befell me.

I am a 27 year old male, living on the North Shore of Auckland. During my years at university, studying for my Honours degree in 2009, I was diagnosed with Crohn's disease. Before this, the only real experience I had with ill health was a moderately severe case asthma during my formative years, and so the shock of dealing with a severe incurable auto immune disorder all of a sudden was intensely disheartening and almost impossible for my young self to have predicted. Within the span of two months, I lost 20 kg due to malabsorption, had severe iron deficiency due to blood loss and I spiralled down to around 55kg at my worst (I am 6 foot 1, so this was scarily thin). I was forced to put my degree on hold whilst I underwent several tests, procedures and eventually surgeries.

Only working a part time job while I studied, through which I was attempting to save to repay my student loan, if I had been forced to pay for my procedures, tests and specialist visits myself, I would have found myself broke very quickly and unable to afford the treatment. In total, in the four years since I have been diagnosed, the medical insurance my mother insisted on me having (Yes, Mums always do know best) has covered the medical bills, MRi costs and surgical procedures, paying out more than $20,000 to help maintain my treatment. Just think about taking that on yourself, and the meagre monthly premiums I complained about will immediately pale into insignificance.

Since then I have regained the weight, remedied the iron deficiency and even though symptoms remain which continually make life challenging, I am considerably better than my darkest days. I don't think this would have been possible without the insurance cover which meant I could get every treatment and exhaust every avenue my specialist reccomended. Thanks to my health improvement, I got my degree and was able to use my savings to repay my student loan, starting off my post university life debt free - a tremendous blessing and relief in today's environment. Before all this happened, I had the regrettable mindset I see a lot. The mindset that I'm healthy and fine and nothing serious medically was on my horizon. Looking back now, my disease was extremely rapid in its onset and I literally went from a normal life to bed ridden, energy sapped, underweight and unable to go about my life within weeks.

When I think about where I might have been without it, I'm passionate about making sure that people know what sort of risk they could be taking by not being covered. I am a single male with no dependants or family, but having one, or people who depend on you financially makes this even more necessary. I hope you don't take the gamble, it's definitely not worth it.

More information on Crohn's Disease.
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What is Permanent Disability Insurance?

In general, Permanent Disability Cover is a type of insurance that provides a single lump sum payment in the event that a person becomes permanently disabled, giving them the financial stability to manage their life through troubled times.

The next question I find that is asked the most, is what consitutes 'permanent disability'? Across the different insurers fortunately this definition remains the same. A permanent disability is an illness or disability that is severe enough that it results in you being unable to work for three consecutive months. Also, following that period, the incapacitation must be severe enough that it renders it unlikely for you to ever work again, although the precision of this aspect differs slightly between insurance companies.

Permanent Disability cover is different to life cover but it can interact with it in several ways. If you select standalone permanent disability, this interaction will not come into play. Your Permanent Disability cover will be stand alone, and should you claim on it there will be no impact on any life cover you may or may not possess. However, some companies offer an accelerated permanent disability cover. This option involves cheaper cost and premiums. In this option, if you are permanently disabled and receive the disability lump sum payment, the amount of your Life cover will reduce by the amount paid out in the permanent disability claim.

There are usually a limit of eligible entry ages that differ for Accelerated cover and Stand Alone cover. For Accelerated the entry ages range between 16 and 60, whilst for Stand Alone it ranges between 16 and 55.

Lastly, there are two different types of Permanent Disability Cover; 'own occupation' and 'any occupation'. If you have 'own occupation', you will be paid your insurance claim if you are fulfil the above criteria and are unable to return to the specific last job you held. If you have 'any occupation', you will be paid your insurance claim if you fulfil the above criteria and are unable to return to any occupation at all. The determination of which category your insurance will fall under will be determined by the insurer based on your specific employment conditions.

If you have any further questions or wish to discuss securing the best possible cover for you:

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Our Unique Claims Service

If there is one aspect of our service we value above all else, it is getting our clients insurance claims through effectively, quickly and with the least stress possible.

Claim time, even when considered in the absence of the health or illness circumstances surrounding it, is an extremely stressful time. A time that is not helped by a panoply of forms, questions and going back and forth with insurance companies.

Whether you require pre-approval, a claim on your health insurance for a procedure, income protection after being rendered unable to work or in the worst case scenario, a claim for a critical illness or death, our professional team is there to help and support you. We have experience and a perfect record in getting the claims you need through and managing your claim for you during any crisis on an ongoing basis. We will arrange the necessary forms, get them to you, help you fill them out and then have them processed. We will then administer and take command of the claims process, always keeping you informed of what is happening.

Also, in our experience, clients can also be missing out on claims they could be receiving through a poor understanding on their own policies or the terminology of insurance providers. We can also help you with this, discerning for you precisely when you can claim and how much for.

If your claim is a single lump sum, our Head of Practise will personally visit you to assist with completing the forms and fully working through the claim with you, giving you personal expertise and one to one service to take the stress away. If you become one of our valued clients, we offer to you all the resources to help you at claim time and manage the difficulties in the easiest and most effective manner.

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Financial Services Council: Unexpected sickness could destroy families.

In a recent report, the Financial Services Council of New Zealand said Kiwis were under-insured for loss of income from sickness. 

Financial Services Council chief executive Peter Neilson said a two-year research project by the FSC showed just 15% of households had income protection insurance.

All were covered for the possibility of an accident by ACC, but they were more than twice as likely to suffer a serious illness.

Neilson said: “Each year 15,000 primary income earners fall seriously ill and are unable to work for six months or more. For a person on the M tax rate, the sickness benefit is $341.60 a week and this is means tested. If another person from the household is earning income, many families find they are too rich to get a household income tested sickness benefit, but too poor to pay the rent, mortgage or food bills.”

He said most Kiwi families would not be able to pay their mortgage or rent four weeks after using up their annual or sick leave.

For someone on the M tax rate, the sickness benefit is $341,60 a week, means tested.

Neilson said: “If another person from the household is earning income, many families find they are too rich to get a household income tested sickness benefit, but too poor to pay the rent, mortgage or food bills.

Taken from Good Returns article: 'Sickness could destroy families'

Comments: This article is definitely representative of our experience in speaking with members of the public and our own friends and families. It is definitely worth stating that simply put, out of the 85% who have no form of income protection, some simply cannot afford it. However, a good proportion can, and it is worrying that some Kiwis adopt a laissez faire attitude to the possibility of sickness and disablement. We have seen and dealt with many of those 15,000 primary income earners per year that fall seriously ill (including Justin, whose story can be found here). The majority of cases have wished that they had some form of protection in place when the disastrous circumstances of being unable to support a family and a way of life struck.

As Kiwis we can be very tough, self reliant, can do people, but often this can give rise to the mistaken feeling of invincibility, which the statistics show is simply unwarranted. Obviously there needs to be a middle ground between spending too much of the money you don't have on income protection and not having any at all and facing disaster in the event of severe illness.  However, the statistics from other western nations dwarf our percentage of 15% (for instance, 27% of American workers have income protection), suggesting the "she'll be right" attitude of New Zealanders may be getting in the way.

Securing insurance doesn't have to be a chore, or exceedingly expensive. Talk to our team of advisers and let them go to work for you. There is a great chance we can keep your costs down and make income protection cost effective and manageable, so that you don't have to face the trauma of facing illness and disablement without proper cover.

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Insurance Selection Advice

When our team of advisers considers your insurance needs and acts to helps you secure an insurance package, we use a set of criteria that in our experience produces the best results in both the long and short term for you the client.

We list it here to give you a perspective on what our experience has found to be the most important factors in insurance, which can differ greatly from what the public expects when they try to go it alone. We hope it helps you when it comes time to manage your insurance plans.

Ranked from Most to Least Important

1. Claims Paying Experience and Performance.

To our mind, the most important part of any insurance policy is how it will operate at claim time. This is the time you really need flawless service to ease your financial burdens and thus claims performance is the most crucial part of what we look for when we secure you an insurance package. Typically, the events that necessitate a claim come with considerable financial and emotional stress for you and those close to you. We look at the efficiency, fairness and sensitivity with which the insurer carries out their work at these times and make sure you have the most efficient and stress free claims possible.

2. Underwriting Performance.

During your life, things will have gone wrong or begun to have gone wrong with your health and these are of concern to the insurer. We require them to look at these issues in the holistic perspective of your entire life and come up with reasonable solutions that are competitive, fair and accurate. The performance of underwriters is defined by the amount of research they do into your specific circumstances and just how much of a balanced perspective they are prepared to take.

3. Policy Specific Wordings and Definitions Relevant to You.

We focus on the individual person and their individual needs. We look for the issues you face, and what you need from your insurance in order to achieve your outcomes. This is our starting point, rather than a product focussed outcome. Insurance should be tailored to an individual, as catch all insurance solutions can more often than not be inadequate. This is something anyone trying to get the right insurance should take into account, and something we insist on. 

4. Long Term Price Stability.

Changes to your health over time may prevent you moving to another insurer should your current insurer’s premium rates become uncompetitively expensive. We actively avoid insurers who have shown long term instability of premium rates, and our experience gives us the edge to know in which areas certain insurers perform better than others.

5. Immediate Cost.

The best option for you is rarely the cheapest option (as detailed more extensively in our article here), but our priority is always to ensure your insurance is competitively priced among the panel of insurers that we do business with. The most important selection criterion is thus to get the best possible deal for your needs that we can in terms of immediate cost.

If you're having trouble with your insurance, feel free to get in contact and our experienced advisors will get you the best cover possible that meets your specific needs and will save you hassle at claim time.

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Our brokers exciting new vehicle fleet

Rest assured that when you put a call in to us, you're getting the best possible service. In that regard, here is an example of our new fleet of vehicles, helping us zoom around town with 'people power'. As you can see, we spare no expense!

New Facebook Page

Spratt Financial Services is now on Facebook! Check out our page and give us a like. Feel free to use our page to direct questions and comments to our team, who are always happy to hear from you.

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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Introduction to Our Investment Services

At Spratt Financial Services, we're not all about insurance. Our investment division is headed by Ross Wallace; an esteemed and accredited Authorised Financial Advisor (AFA), with over 30 years of experience in the Investment Industry. He is a member of the Institute of Financial Advisors (IFA) – New Zealand’s industry leading professional body for financial advice practitioners. 

Investment planning can be a crucial part of securing financial prosperity, and the benefits of sound investment can be huge. At Spratt Financial Services, we provide sound, well researched investment information for individuals, family trusts and businesses. Whether you are in need of a short term or long term solution, our team of professionals is ready to help.
 

You may be taking the first steps towards managing retirement funds. You may require the accumulation of funds towards a specific goal. You may have a lump sum you wish to invest for greater gains. Whatever your unique circumstances may be, we have fully qualified advisors to assist you in making the right investment choices. We specialize in tailoring solutions which are exclusive to you, and our investment solutions are fully researched and monitored by an independent research house, ensuring you the best and most up to date information with which to make your investment decisions.

Our services include information relating to:

• Regular savings programmes.
• Investment of lump sum amounts.
• Full pre and post retirement investment modelling.
• KiwiSaver.
• UK Pension Transfers.  

We will always offer to you the best possible combination of investment strategies. We will work with you to determine whether your strategy suits one of our model portfolios or whether we need to tailor make a portfolio specifically for you. At Spratt Financial Services, we have adopted a disciplined six step process to ensure your reccommended investment solution has an optimal allocation of assets.

Email us today for more information. 

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