The cast of Friends helps with your insurance decisions.

Ross, Rachel, Chandler, Monica, Joey and Phoebe. Everyone knows the cast of Friends and their crazy New York lives. Friends was easily the most popular and well recognised sitcom of the nineties and the early 2000s. But what on Earth does this have to do with insurance? One of the questions people tend to wonder about is, what type of insurance do I most need? So let's use the example of some of the characters most of us know and love to explore some possible answers. Maybe it will help you decide what cover you should be prioritising.

1. Monica Geller

Monica is a little bit obsessed with her environment. She needs to have everything in the right order, her possessions accounted for, stacked and in pristine condition. Someone like Monica would most likely not know what to do with herself if her stuff and her environment was damaged, stolen or broken in any way, shape or form. So, Monica's first priority really should be some good quality home and contents insurance so that she can replace all that important stuff if something should go wrong. Are your possessions your world? Secure your home and contents first.








Recommended Insurance: Home and Contents Cover

2. Ross Geller

And then there's Monica's brother Ross. Ross is a paleontologist and a university lecturer, and he also has two children to look out for, one from his ill fated first marriage and little Emma with Rachel. Thus, Ross has a lot of obligations that he needs to fulfill. Rachel may have a decent job with Ralph Lauren to help out, but he wouldn't want the whole burden to be placed on her should something happen to him. For Ross it may be a close call between Income Protection and some Life or Trauma Cover. Income Protection would ensure his money from his job would keep coming in if he was injured, disabled or sick. Life cover would provide his children a lump sum payment if Ross passed away suddenly. Perhaps both would be a good idea.

Recommended Insurance: Life Cover and Income Protection.

3. Joey Tribbiani

Joey is a fun loving aspiring actor who had one brief brush with fame playing Dr. Drake Remoray on daytime soap Days of our Lives. Since then though, roles have been sporadic at best, including playing opposite a remote controlled robot and being a butt double. Yes, a butt double. With an income that's not fixed, Income Protection wouldn't be the best option for our pal Joey, but with the way he eats and the lifestyle he leads, he should definitely first and foremost be looking at some health insurance. We all remember that time he got a hernia and had to act on through it!

Recommended Insurance: Health Insurance

4. Phoebe Buffay

Phoebe had a hard childhood and past, spending most of it getting an education on street living. She's a little out there and wacky, but in her heart of hearts is generous, giving and kind. For most of her life, she's had to make her own way in the world and depend on herself. To that end, Phoebe became a beautician and a masseuse to help her pay her way in the big city. Being a masseuse requires her to be fit and able at all times, so it would be a good idea for Phoebe to protect herself against a disabling injury which would stop her from practising her chosen profession. A specialised kind of TPD cover could be the best option, especially since this can be more cost effective.


Recommended Insurance: Total Permanent Disablement Cover (Own Occupation Option)

5. Chandler Bing

Being married to Monica, Chandler might not get the first choice of insurance in the household! However, after moving away from New York to hopefully start a family with his wife in the country, Chandler might want to look at protecting his new mortgage should anything go wrong with his health or if he loses his job. Mortgage repayment insurance combined with some redundancy cover would be a cheap and suitable option to get his new life off to the best possible start. Chandler's mouth sometimes gets him in trouble, so some health insurance couldn't be the worst idea either!



Recommended Insurance: Mortgage Protection, Redundancy Cover and perhaps some Health Insurance.

6. Rachel Green

In the early days of the series, having the right insurance cover was probably the last thing on Rachel's mind. Her rich father took care of her bills and her accomodation and most likely was her de facto insurance cover. Rachel came a long way since then though, becoming an independent woman with a job at Ralph Lauren and a beautiful baby girl to support. The top priority for Rachel now with a newborn baby should be getting her child covered so her medical expenses will be paid for if something should go wrong with little
Emma's health. If she acts quickly, within the first three months after the baby is born, any pre-existing conditions the child has will be covered as well.

Recommended Insurance: Health Insurance for herself and her child.

Always remember, if you need help or have any questions with what insurance could be right for you, you can ask anytime through the contact form on your right, or by email at enquiry@sprattfinancial.co.nz!

Insurance Claims Statistics and Facts

Below are a collection of facts and statistics around claims and policies which may help you navigating the tricky waters of insurance:

1. 16% of Life Insurance claims are paid out early for Terminal Illness.

Some may be unaware that your life insurance can be paid out before the policy holder's death in the event that they are diagnosed with terminal illness. This happens in 16% of life insurance claims and can assist the family in making important financial decisions and quickly ease the monetary burden during this difficult time.

2. Life Cover Claim Reasons:

26% Heart Related (Cardiac Arrest, heart disease etc)
26% Cancer
12% Pneumonia
6% Stroke
2% Self Inflicted
1% Diabetes
1% Accident
11% Other
15% Unknown Causes

3. 50% of Trauma/Critical Illness Claims are due to Cancer

Heart related illness in this category accounts for 16% of claims, whilst Angioplasties and Strokes account for 5% each. Trauma cover is a separate form of cover which pays out a sum assured upon your diagnosis with a critical condition.

4. Muscular and Limb Injuries account for 47% of Income Protection Claims from one leading insurer.

5. The average age where Income Protection policies are cancelled is 46.

An extremely unfortunate fact, in light of the fact that...

6. The average age that Income Protection policies are claimed on is 47.

As we get older, we get more susceptible to injury and illness. Think carefully before making any big decisions about your insurance because being left without an income and a family depending on you can be a crippling financial burden.

Any questions about your insurance? Try out our new contact form!

Staying Healthy: Losing Belly Fat.

Staying healthy is always a good idea. Not only can it lead to a longer time on this Earth with a far better quality of life, it can have financial benefits too. The better shape you're in, the less you'll be paying for your insurance as your lessened risk to the insurer results in lower premiums, more cover being available to you and less exclusions for certain health conditions.

In this edition of our staying healthy series, we're going to look at effective ways of ridding yourself of that troubling belly fat. An ample waistline puts you at higher risk of serious health conditions including heart attacks, high blood pressure, diabetes and strokes. Excess abdominal fat triggers a change in the bodily hormone which controls blood vessel contraction, increasing the risk of dangerously high blood pressure, strokes and cardiac arrest. That's reason enough to shed those pounds right there.

Men are at higher risk for heart disease than woman, based on higher incidences of stomach fats.

1. Change your diet.

The calories your body consumes from protein are far more easily burned than the ones consumed from carbohydrates. In fact, up to 30% of the calories you consume from protein will be burned during the process of digestion. White meat from poultry and seafoods are good sources of leans protein for snacks and for meals. Try to substitute as many carbs as possible for healthier proteins and you'll make the task of burning that belly fat a whole lot easier. 

2. Stop over-eating.

It sounds like the simplest thing in the world, but our meals are often way too big, and if you're eating more calories than you're burning, you're gaining weight. It's as simple as that. Try using smaller dinner plates to avoid filling up; if it can't fit on your plate, you won't be eating it! Fill up your smaller plates and leave the rest as leftovers for another day. Also, try drinking a lot of water before eating. The water takes up space in your stomach so you won't have to consume as much to feel full. Eat little nutritious snacks in between meals so you won't feel the need to gorge at lunch or dinnertime. 

Smaller plates means less chance of over-eating. Try it out sometime!

3. Start walking!

Walking is an easy, low impact form of exercise that targets a broad variety of muscle groups, gets you active, burns calories and nearly everyone can do it! I personally have been walking a lot the last few months, over 25 km a week. Start by doing a half hour or a set distance per day at a time suitable to you (I find right when I get up before work is my preferred time) and then gradually build up over time as your fitness level improves. Apps like Runkeeper can be great motivational tools as they track your walk and tell you the distance travelled, amount of calories burned and a bunch of other cool stats.

4. Get the right amount of sleep per night.

A selection of studies have shown that the ideal sleep to prevent gaining of visceral belly fat is usually between 6 and 7 hours. People who got less than 5 as well as people who slept for more than 8 hours per night showed more visceral fat gain over a five year period.

Aim for 7 hours of sleep per night - that seems to be the weight loss sweet spot!

5. Don't just do crunches!

I know that when I start gaining a bit of weight around the middle, my first instinct is to start doing crunches. Whilst this may result in stronger abdominal muscles, it won't do much to handle the layer of belly fat on top. Better exercises are ones that work multiple muscle groups at a time. Try planking or the aforementioned walks or runs.

6. Manage your drinks intake.

Minimise soda, sugary drinks and milkshakes. Maximise water, tea and diet soda. Just a simple step like cutting out that can of Coke from your day can have an impact on your calorie intake and your weight loss. Everything counts!

Other entries in our Staying Healthy Series:

The Health Benefits of Honey

Weight Loss Tips

Can Chocolate Prevent Obesity and Diabetes?

Financial News Roundup

1. Australian Insurer first offer 'Ebola Cover' - Insurance Business Online

2. Business and Finance Weekly Diary - Stuff.co.nz

3. John Key talks Trade and Finance at APEC. - 3news.co.nz

4. 80% of drivers don't admit damaging another car. - NZ Herald

5. Cover for Cancer Screening and GP visits attracts customers. - NZ Herald

6. How to take interest and get results from your Kiwisaver. - Business Day

7. Just For Fun: What kind of insurance do superheroes have that pay for all that damage? - TV
Tropes

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New Zealand Insurer Brings back Full Replacement cover for houses.

Tower Insurance has gone against the prevailing wind of house insurers to offer a full replacement option for houses destroyed by fire. Most insurers in the industry moved to a sum assured model at the beginning of 2013, meaning that they would pay out an agreed upon value (the sum assured) if the house was damaged or destroyed by fire. The sum assured model often sometimes not provide sufficient funds to totally replace the value of the house, just going most of the way.

“Being able to provide full replacement for fire means one less worry for homeowners in the traumatic event of a fire,” Tower CEO David Hancock said. “Tower can guarantee your home will be fully rebuilt if it’s destroyed by fire, regardless of the cost or the sum you’re insured for.”

Providing a full replacement option should set Tower apart in the fire and general insurance marketplace and give customers another option for covering their houses which is always a good thing. Tower says that they made the move to bring back full replacement in light of comments from their customers who found the sum assured format confusing. “People want to know that if the worst happened they can at least know that they will get their house back the way it was.”

If Tower's move proves successful, and they can maintain affordability, it will be interesting to see if other insurers follow suit. What do you think of Tower's move? Do you find the current home insurance confusing? Would you rather go with a full replacement option?

Visit our house insurance partners.

Send an enquiry about home insurance.

Spratt Financial Newsletter (October/November 2014)

To check out our official Spratt Financial Newsletter in PDF form, click here.

This October/November 2014 issue contains:

- How to maximise your Kiwisaver results.
- Information on the Hospital Stay Benefit on Income Protection and how it can benefit you.
- Ways to save money on your Insurance.
- What's new with the company?

Financial News Roundup October 2014

1. Some Insurers refusing payouts to injuries suffered while drunk. - NZ Herald

2. Southern Cross posts a $1 million annual loss. - NZ Herald

3. BNZ cuts its 2 year mortgage rate. - Interest.co.nz

4. Auckland house prices rise to a new record. - NZ Herald

5. Fidelity Life posts record result. - Good Returns

6. Here's how Generation Y can buy a house. - Andrew King

7. NZX 50 is weathering the financial storm. - Mark Lister

Visit us at www.sprattfinancial.co.nz 

News: Onepath Life Insurance to become truly One.

Onepath Life Insurance has announced that it will be consolidating its two life insurance companies into one. The move is primarily about simplification, and will not result in any changes to its existing insurances. Currently, Onepath has one company which services advisers and brokers and one company which directly sells their life insurance product, distributed through banks.

The process has begun, subject to approval from the Reserve Bank. There is anticipated to be no issue moving forward, and the merger is expected to be approved and completed. Onepath says that the merger will enable them to avoid two companies worth of compliance costs and streamline their services, ultimately aiming to provide a future benefit to customers.

Onepath is also planning a major product relaunch next month which will feature a focus on income protection. We will keep you posted with what this entails, what changes could be made and how this could benefit you as news emerges.

Changes are on the path ahead for Onepath.

Hospital Stay Insurance Benefit - How it Works

Hospital. That smell, those beds, that food. Trust me, as a regular visitor to one, I know the drill. It sure isn't my favourite place in the world to visit. But if I was to get re-imbursed for it, that sure might make it a heck of a lot more tolerable. That's what we're talking about today, a benefit on your insurance that could result in just that.

If you have an Income Protection policy you likely already have this benefit (although it always pays to read the policy wording and check, because different providers and policies can vary). Basically, what it means is that if you suffer an illness or accident that necessitates a stay in hospital, you can claim on your hospital benefit. The benefit is designed to protect you whilst you're in hospital, aren't earning an income and possibly can't manage the bills such as your mortgage/car payments/rent etc.

The costs of a hospital stay on your life can be mitigated with Income Protection.

For instance, let's say Mike has a policy with a hospital stay benefit and suffers an illness which lands him in hospital for two weeks. The way the payout is usually calculated is that you will receive 1/30th of your agreed upon monthly income protection payout for each day you are in the hospital. Mike's monthly sum assured is $5,000. 1/30th of $5,000 is $166. That means Mike will receive $166 for each day of his hospital stay. Since Mike stayed two weeks, he is eligible for a total payout of $2,333.

We're trying to draw a bit of attention to this benefit, because recently we have had clients unaware of the fact that they were eligible for a claim on hospital benefit until we told them. So take a close look at your policy wordings and if you've had a hospital stay in the past, you might be eligible for some financial help.

Visit us online at www.sprattfinancial.co.nz for more info.

How to save money on your insurance.

BEFORE YOU GET INSURANCE:

1. Think about your sum assured.

The sum assured of your insurance policy is the amount that the insurers will pay you when you have to make a claim. As the sum assured of your insurance increases, so will the premiums that you pay. Take the time to do some research and think about what circumstances in your life could arise. Plot out a set of possible costs and ask the right questions (for instance, 'If I were to be diagnosed with cancer, how much money would I need to keep my family going and support them?). When you have come up a figure as best you can, add to the figure a bit and take that as your ideal sum assured. Rather than just assuming costs and selecting a round figure such as $200,000 which could be too high, taking the time to plan could end up saving money on your insurance. For a deeper insight, you could always consult a financial adviser who can plan out exactly what you need your insurance cover to be.

2. Scour the marketplace or get a quote from several brokers.

Every insurance provider is different, with different waits, different conditions and different policies. It is crucial that you take the time to go out into the marketplace and find the best deal possible. Jumping at the first offer could leave you paying premiums you don't have to. If you wish to go it alone, compare the major insurance providers plans and offers. An insurance broker can help you complete this process with even better results, as reputable brokers generally have deals in place with major insurers and can get you even better rates. Get quotes for your insurance from several brokers to compare and then select the one that offers you the best deal to save money. Also take into consideration the ongoing service they offer as well as the quality of the cover they are offering.

3. Think about adding an excess.

If you are looking at a medical or fire and general insurance policy (such as home, contents or vehicle insurance) adding an excess can reduce premiums significantly. Adding a $500 excess for example, means that the first $500 of any incurred medical or damage costs is agreed to be paid by you, with the insurer covering the rest in their claim. Having an excess can be inconvenient, but if you claim rarely, it can more than pay for itself with the savings in premiums.

4. Extend your wait period - Income/Mortgage Protection/Redundancy Cover.

In an income protection or mortgage insurance policy, the wait period is the amount of time you agree to wait after your claim is accepted for insurance payments to begin. For instance, with a 13 week wait, you will begin receiving your income protection payments 13 weeks after your claim is accepted. The longer your wait period, the cheaper the premiums you will pay become. If you are part of a working couple who can sustain themselves on one income for a period of time or if you have savings set aside for a rainy day, this could be ideal in saving you money.

5. Select the right optional benefits.

Many policies can include optional benefits or extras. Medical policies for instance can be more basic or comprehensive, including such things as hospital cover and GP costs. Think about the benefits you are truly likely to need and which ones are not required. An adviser can help with this process, setting out all the benefits against your current personal financial situation.

AFTER YOU HAVE INSURANCE:

1. Review your insurance regularly.

We review our clients insurance annually, and the reason for this is that things change, both in life and in the insurance marketplace. A new product may have come on the market, your life circumstances may have changed or better deals may now be available. If you have your own personal insurances that are not through an insurance broker, be sure to take the time to review your cover on a regular basis. Ask yourself how well it is working for you, if anything has changed in your life that may allow you to reduce your cover and search for new deals that are out there. If you are with us, we can do all this for you. A regular review can save you money in the long run.

2. Are you a smoker?

Keep in mind that if you were a smoker at the time of taking out your insurance policy, you can save a considerable amount of money on your premiums by quitting. Several of our clients in the past have neglected to inform us that they quit smoking years ago when their policy was continuing under an assumption of smoking. Once you have quit for a certain period of time, your policy can be changed to non smoker, and you will be shocked at how much money each month you are saving.

3. Think about the cheaper, more specific covers.

If you really need to save money on your insurance, you can think about replacing some of your insurance with their more specific, less expensive versions. Income protection can be more costly when compared to both Mortgage Insurance and Redundancy Cover. So, if you are mainly worried about covering your mortgage payments or maintaining an income in the face of redundancy, these cheaper policies can be better than a full on Income Protection policy. Discuss your options with a professional and make an informed decision.

Visit our official website for more information on our services.

Want a free, no obligation review of your insurance needs? Email enquiry@sprattfinancial.co.nz or call 09 307 8200 today.