Insurance: Why you should get in while you're young.

Among the concerns of life, insurance tends to only come onto our radar when we enter the middle stages of our life. In our middle age, our career is bedded down, perhaps a few health issues are beginning to crop up and getting married and having children redirects our priorities to people in our lives we should financially provide for. But is this too late? Whilst it seems natural in a sense to put off paying for insurance during our younger, formative years, there are actually many good reasons to look at getting insured early.

1. It's vital to get in early with Medical Insurance.

 From personal experience, I could have been in a world of trouble if I didn't have medical insurance by the age of 20. Just after my 21st birthday, I was diagnosed with Crohn's Disease, and since then my medical insurance has saved me close to $20,000 in medical costs that I may have had to pay out of my own pocket. Better yet, since I secured my medical insurance while I was healthy, I had no exemptions and paid normal cheaper rates. If there's one form of insurance you get while you're young, it should definitely be medical insurance. If you leave it too late, you may be unable to get pre-existing conditions covered, or you could pay much more than you need to for both medical treatment and premiums.

You never know what could happen with your health - secure medical insurance early in life.

2. Your health status determines how much you pay.

A great reason to think about life insurance and trauma insurance cover earlier in life is that your insurance policy will be determined by your current state of health. The premiums that you pay reflect your level of risk to the insurer, so if you are young and in good health, you will pay far less than you will if you're older and more infirm. If your health deteriorates too much, you may not be able to get insurance at all. It could be a good idea for you to protect your future dependants now, and not take the chance of your health deteriorating.

Having to pay insurance costs is unappealing when you're young - but it could save you more than you can imagine. Be sure to weigh the costs and benefits to your situation carefully.

3. You'll be covered for any conditions that develop - no exemptions.

If you have any existing serious medical conditions when you secure insurance, there's a good chance you'll either pay a hefty fee to have them covered or the insurer won't cover them at all. If you get in while you're young and in peak health, you can rest assured that anything that develops will be covered AND you won't be paying any extra for it. If I had only got medical insurance after being diagnosed with Crohn's, I could be paying double or triple what I'm paying for premiums or I may have been unable to get cover and had to foot the bill myself. That's not what you want. 

If your medical history is spotless - your policy exemptions will be too.

If you have the ability, Spratt Financial highly recommends the benefits of thinking about securing personal insurance as young as possible. You'll save money, you'll have peace of mind and you won't have to take a chance on your health staying good. If I had taken that chance, I would have gambled and lost. Spratt Financial Group can get you the insurance you need at lower prices than you'll find for yourself, and our services are completely free and no obligation. Drop us a line today for a free review of your insurance needs.

Request a quote on your insurance today!

Visit our official website for more information.

Insurance News Round Up

1. Quirky contents insurance claims highlighted to encourage customers. - Insurance Business Online

"Some customers don't make a claim because they don't realise their more unusual items are covered under their contents insurance" - AA Insurance gives a reminder to potential customers that they may be underestimating the value of their contents insurance and what is truly covered.

2. Where to find the best travel insurance. - Stuff.co.nz

Southern Cross Travel insurance, 1Cover and Worldcare have been named the travel insurance providers who best provides "outstanding value".

3. New Zealanders lack insurance for their most important asset. - Stuff.co.nz

Whilst 95% of Kiwis have cover for their homes, cars or possessions, only a mere 30 percent of New Zealanders are covered by health insurance and only 57% have life cover.

4. Southern Cross Travel Insurance reveals the extent of fake claims. - Voxy.co.nz

SCTI have revealed the regular extent of fraudulent travel insurance claims they receive, estimating upwards of 1500 cases a year may be fake claims.

5. Sovereign targets underinsured millenials in latest insurance campaign. - Good Returns

New digital led campaign aims to combat excuses, empowering young Kiwis to stand up and take charge of their financial wellbeing.

www.sprattfinancial.co.nz

NIB Medical Acquires Onepath Medical Business

Late last year, NIB Medical purchased the entirety of Onepath's medical insurance business for $25 million. Onepath will continue selling life and disability insurance unchanged.

Since NIB arrived in New Zealand after expanding from Australia, it has grown into a substantial presence in the medical insurance marketplace. Originally buying Tower's Medical policies, this further expansion solidifies them further as top players in the NZ insurance market. This development will mean that NIB services 200,000 NZ clients, or around 15% of those with health insurance in the country.

For clients with existing Onepath policies, these policies will be transferred to NIB around the middle of the year. They will then be responsible for your claims and changes to your medical policy. Your premiums and the structure of your policy will remain the same. Notifications from both Onepath and NIB will be sent out to you before then. If you have any questions about the transition, you can contact us anytime and we'll be happy to help.

Financial News Round-up - New Years 2016

1. 5 health insurance resolutions to consider in 2016. - NZ Herald

Some great things to consider with regards to your health insurance in 2016 including considering deadlines, when to make changes, and how to get familiar with your coverage.

2. UK Insurers reject almost 50% of mobile phone claims. - Insurance Business Online

As mobile phone insurance becomes more and more of a necessity, UK insurers have been doing the industry and their clients a disservice by finding means to reject claims, including not having certain apps installed and not having SIM cards inside.

3. NZ's largest general insurer introduces a new CEO. - Interest.co.nz

Craig Olsen has taken over the top job at IAG as part of a new leadership team announced just before the New Year. He is taking over from former CEO Jacki Johnson.

4. Daily mortgage rates from the major suppliers. - Interest.co.nz

Handy tool to keep track of mortgage rates from the major lending suppliers in NZ.

5. To cash up, or to keep your money in Kiwisaver? - NZ Herald

A good article featuring tips on what to do with your money in your Kiwisaver and how to make the most of it. Also, keep in mind Spratt Financial's free Kiwisaver consultation service to help make sure your Kiwisaver is performing the best that it can.

6. New website educating the public about personal insurance products set to launch. - Good Returns

Life-Info.org.nz currently preparing for launch in the New Year aims to add to the financial literacy of the NZ public as it relates to the crucial matter of personal insurance.

7. New Year's resolution: Financial fitness tips for retirees. - NZ Herald

Older people were recently found to be less likely to set financial goals than younger people. Experts in the field have put together their best tips for older people to become financially fit and secure.

Visit the official website of Spratt Financial Services here.

Tips to save money on your insurance #3

3. Review your insurance regularly.

Once you have insurance in place, its vital that you take the time to review your cover regularly. At Spratt Financial, our policy is to conduct annual reviews of our clients' insurance along with them to ensure that they really are getting the best insurance for them.

Things naturally change in life. Life changes can hugely affect what you need out of your insurance and what you need protected. Taking the time to review and not being afraid to make adjustments as necessary is crucial to getting the best deal on your insurance. As a guideline, you should try to review your insurance when the following events happen in your life:

- Getting married or divorced, or entering into a civil union.
- Having a child.
- Taking out a new mortgage or a significant debt.
- Paying off a mortgage or making significant progress to doing so.
- Beginning to take care of a friend or relative.
- Getting a new job or a raise.

Looking at these events can give you a good guideline as to when you should be reviewing your insurance cover. Even if you don't end up saving money on premiums, you can be more assured that your insurance will be covering your real current circumstances. That could save you a ton in the long run.

You can ask us for a free, no obligation insurance review at any time here.

Tips to save money on your insurance. #2

2. Consider your waiting period and/or excess.

Waiting Period: Increasing the waiting period on your insurance cover is one way to lower the cost of your insurance. The waiting period is the amount of time you must wait after fulfilling the conditions of your insurance before being eligible for the claim payment. For instance, with a 6 week wait on an income protection policy, you will have to wait 6 weeks after stopping work to become eligible for your claim payments.  The higher your waiting period, the more discounts you will get on your insurance premiums. Therefore, if you have sufficient savings to cover the wait period if something unfortunate does happen, a higher waiting period can be a great idea for savings in the long term.

Excess: For certain types of insurance like fire and general or medical insurance, you can select a higher excess to achieve the same savings. An excess is the amount of costs or damages that you must cover on your own before your insurance kicks in to cover the rest. A $1000 medical insurance excess means that you will pay the first $1,000 of any medical procedure you need and your insurance will cover the rest. We recommend taking a balanced approach between saving on premiums and having an affordable excess if something happens, but if you're taking a long term approach, increasing your excess can be a good move.

Not sure where to start? Ask us for a free and no obligation insurance review today.

Tips to save money on your insurance. #1

The experienced insurance team at Spratt Financial Services has a number of tips to help you save money on your insurance, whether you have existing policies or you're looking to get insured:

1. Make sure your sum assured is not unnecessarily high.

Selecting the amount of insurance you need is one of the most crucial areas that people need to spend more time considering. It can often be too tempting to just pick a round figure that you assume is correct for your needs and go with it. When we give advice to new clients, we take the time in helping them go through their debts, their needs and what exactly they need provided for. Let's say you discover that you need $150,000 of life cover to adequately cover your debts. By doing this instead of blindly selecting say $200,000, you've instantly saved a considerable amount on premiums. Picking the amount that you need and then revising it as necessary as changes in your life occur is one of the best ways to be sure you're not spending too much on your insurance.

Not sure where to start? Ask us for a free and no obligation insurance review today.

Insurance Advice and Tips

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 Will You Need The Cover 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. 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 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 us and we can help you find the amount you need.

4. Do You Have The Right Insurance?
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 us - 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 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 over 200 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 that you use experienced professional advisers to not only design and review the underlying 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. Remember that if in doubt, you can always use our experienced professionals if you need guidance or advice - our service is completely free and no obligation, so you have nothing to lose!

Visit our official website for more information.

Contact us if you need help with your insurance.

Insurance Frequently Asked Questions (FAQ)

Spratt Financial Services presents our new and updated list of the most common insurance questions we receive and our answers to them. 

1. Do I really need risk insurance?

Health Insurance: Although it may seem easy to adopt a standpoint of ‘it won’t happen to me’ as it relates to insurance, it is an unfortunate statistical fact that you will require hospitalisation, surgery or medical procedures at some point in your life, in many cases more than once. Within the current medical system, the only way to ensure that you and your family will receive the treatment you need promptly and without throwing your finances into turmoil is by taking out health insurance.

 
Life Insurance: If you are the breadwinner of your family, or you want to make sure your loved ones are supported in the event of your passing, some form of life insurance is a necessity. Unless you have an extremely significant amount of savings to cover all of your debt and provide for your dependants as long as they will require, we believe that you should always have a life insurance policy in place. The risk is not worth taking.

Income Protection and Disability Insurance: People sometimes operate under assumptions that severe illness will result in recovery or a relatively quick passing away. Unfortunately, that is most often not the case. The large proportion of cases of serious illness (heart attack, strokes, cancer etc) result in a protracted period of physical disablement, during which time you will be unable to work and maintain the income necessary to cover your expenses - which will not be on hold until you to get better! This is why income protection and/or permanent disability cover can be essential if your family depends on your income to maintain their way of life. With the right cover, you can have the peace of mind that your income will be maintained in the event that tragedy strikes.

Key Person Insurance: If you run a business and your business prosperity relies on several key employees or directors, key person insurance is a very good idea. It will provide compensation for their loss if they are disabled through illness or injury and support your business financially until an adequate replacement is found and the business is back on its feet. In some instances, proper key person insurance can be the difference between a business surviving or having to shut down.

Although cover may seem unnecessary from a short sighted mindset, the alternative of having to bear the burden of excessive treatment expenses, leaving your family without a solid income or unable to maintain their life in the event of your passing makes the cost of premiums a small price to pay.

2. What types of insurance can you provide?

Spratt Financial Group can offer all types of risk insurance for both individuals and businesses/corporations, no matter what the size. This includes: 

• Life Insurance
• Medical/Health Insurance
• Trauma Insurance
• Income Protection and Redundancy Cover
  
• Mortgage Protection Insurance
• Key Person Insurance Cover
• Total Permanent Disablement Insurance

Spratt Financial Group can also provide a full range of fire and general insurance, including home, contents, vehicle insurance, business stock/vehicle/building insurance, pet insurance, travel insurance and liability cover.

3. I can't afford every type of insurance - which ones are most important?

For most people, it is simply unfeasible financially to have every possible form of risk insurance available. As such, it becomes a question of discerning which ones are most important for you to have. The answer to this will differ based on your personal situation and our team can discuss this with you more fully at any time if you wish. However, in most circumstances, we recommend at least a basic combination of medical insurance (to insure that any medical procedures you need are covered) and life insurance (to provide for your dependants if something should happen to you). If you have room for more in your personal budget, trauma insurance and/or income protection can provide you with good peace of mind if you were to suffer a protracted illness that renders you unable to earn a living.

4. Are there any cheaper forms of risk insurance?

If you are looking to save money on your insurance, there are certain more specific and less costly options available to you. For example, if you cannot afford a full income protection policy, redundancy cover is a cheaper alternative (although it will only cover your lost income due to being made redundant). Another less expensive option is mortgage repayment insurance, which will cover your mortgage payments if you are disabled and cannot earn an income. As you can see, these are more specific forms of insurance, but they do come with considerable savings in premiums compared to regular income protection or trauma insurance policies. 

5. Are there any other options to save money on my insurance?

Yes there are. Spratt Financial Services can offer you many avenues to save money on your insurance. Firstly, with our healthy relationship with New Zealand's top insurance providers, we can often negotiate better deals for your cover than you will find alone. Also, many people can end up paying more than they need to be for their insurance by not having the right sum assured or the right type of cover for them altogether. Our insurance brokers will take the time to find out your personal circumstances and secure the right cover for you at the lowest prices available.

6. Health Insurance: Which type of Health Cover is best?

The primary benefits of having health or medical insurance are guaranteed protection from the risk of having to pay for your own treatment, as well as obtaining the best possible care with the least amount of delay or stress. In general, for most cases, a hospital and surgical combined with a tests and specialist policy will provide you with a basic and effective level of cover. We also specialise in more specific insurance plans covering optical and dental expenses, and also routine GP visits and checkups. As to which specific plan is the best for you, there are a number of variables which our advisers are more than capable of explaining personally in a thorough and understandable way. Feel free to get in touch with us and we can talk you through the options that are best for you.

7. Health Insurance: Are there alternatives to Health Insurance?

Not really. Although it may be tempting to think that you could save the money you would normally pay into a medical insurance policy for possible future use, the levels of medical inflation means that an investment would need to grow at an unrealistic rate to keep up. Obviously there is a chance that you could go through your entire life without ever making a claim (which would be a good thing) but there's also the possibility that you need to make several significant claims.

8. Trauma Insurance: Which medical conditions will allow me to claim?

In our experience, many New Zealanders who have trauma insurance could make a substantial claim which could help their finances tremendously and are unaware that they qualify. Your trauma insurance policy will tell you exactly what claim you are entitled to and which conditions will make you eligible. For the most specific list of these conditions, please consult your policy wordings. A list of conditions could include:

Cancer (including malignant tumors), angioplasty, aortic surgery, cardiomyopathy, coronary artery bypass surgery, heart attacks, cardiac arrest, alzheimer's disease, coma, dementia, encephalitis, major head trauma, meningitis, motor neurone disease, multiple sclerosis, muscular dystrophy, stroke, paralysis and loss of functionality, loss of hearing, loss of sight, loss of speech, loss of use of limbs, advanced diabetes, liver failure, lung disease, renal failure, HIV, major burns, major transplant surgery.

If you're unsure what these conditions entail or if you qualify, you can ask us anytime and we'll be happy to help.

9. Which Insurer provides the best Health or Life Insurance policy?

The answer to this question will vary depending on your own personal needs from your insurance plan. There are a number of factors which need to be taken into account when choosing a provider. Every company is slightly different in the way that it structures its cover. For instance, some companies base their premiums on the age of the youngest adult covered, some have ‘per-child’ premiums, whilst others have a flat rate no matter how many children are covered.  Companies also differ in the way they process claims for procedures (health insurance) or in the event of the policy holder's death (life insurance). This is why the service we provide can be so beneficial to you, as our knowledge of each company is unmatched, and taking your personal situation into account, we can quickly and easily find the best insurance option for you.

10. Should I choose an excess?

Adding an excess to your policy can have practical benefits in the long run, as most companies offer a discount on the monthly premium for doing so. This saving, over time, can add up to a significant total over the course of several years. Furthermore, it is an unfortunate fact that premiums will continue to increase over time. Adding an excess is one of the options we can provide you in order to mitigate these increases, keeping your insurance costs manageable and saving you money.

11. What if I need to make a claim?

We pride ourselves in providing the best and most comprehensive claims service in the country. We know that the paperwork and procedures involved in claims can be burdensome, especially during your most stressful times. Fortunately, you can leave all your claims in our capable hands and we will get you the results you need in the quickest and easiest way possible for you. We promise that with us, your insurance claim will be as easy and stress free as possible.

12. How much will my insurance premiums increase over time?

This will depend on the choice of company, and will be taken into account in our initial consultation with you. Some have age-related premiums increasing each year, whereas others calculate premiums on five year age bands. Regardless of how often these age-related increases are applied, you can expect to receive an increase every year or so to reflect higher than expected claims (company wide rather than specific to you) or to take the rise in medical costs into account. Factors that contribute to higher claims costs include:

• Restricted access to public health care.
• New medical technology (more costly to provide).
• An aging population (with higher average claims amounts).
• Rising medical inflation (increasing consultation, treatment and equipment costs).

Increasing premiums are a necessary fact of life in terms of insurance, however we can provide several strategies in order to lessen these costs. These strategies can include adding an excess, shifting insurance providers or making policy adjustments, always ensuring your best interests are our top priority.

13. I'm applying for insurance - do I need to remember details of my medical history?

It is necessary that you can recall as much as you can of your significant medical history. The main thing when completing an application for insurance is to disclose as much as possible of any past medical treatment or consultations. Failure to do so could impact claims on your insurance policy.

14. How do I get started?

For more information on how Spratt Financial's team of insurance brokers can assist with managing your insurance programme, use our contact form here or contact us by email at enquiry@sprattfinancial.co.nz. You can also call us any time at 09 307 8200. 

Visit our official website for more information.

Finance News Round Up

1. How to become a financial superman. - NZ Herald

Some simple tips on how to improve your finances, including keeping a monthly spending diary, properly organising your bank accounts for financial efficiency and taking an honest look at your mortgage and how it can be improved.

2. Insurance Actuaries use forecasts to predict All Blacks World Cup win. - Insurance Business Online

Forecasting tools originally used for insurance are forecasting a 44.3% chance of the All Blacks winning the Rugby World Cup.

3. Hundreds of Rugby World Cup Insurance claims expected. - NZ Herald

Travel insurance company is gearing up to receive hundreds of travel insurance claims from Kiwis travelling in the UK for the World Cup. One insurance company estimated the cost at being flown back to NZ by air ambulance in case of a severe emergency to be verging on $100,000.

4. Southern Cross: Action is needed to keep insurance affordable for retirees. - Good Returns

Southern Cross has registered a $5.8 million surplus, recovering from a $1.1 million deficit last financial year. They have also come out in favour of a 25% rebate for members over 65.

5. Insurer launches new marine liability product. - Insurance Business Online 

This new product will simplify things for marina operators and ship builders/repairers by no longer forcing these businesses to buy two standalone liability policies.

6. NZ Dollar hanging in there despite doom forecasts. - Interest.co.nz

Roger J Kerr states that the NZ dollar is showing many traits of the conquering All Blacks rugby team by hanging in there against the USD despite numerous forecasts to the contrary.