Top 7 Insurance Myths Exposed: Common Misconceptions About Insurance Coverage in New Zealand

Insurance is a crucial component of financial planning, yet there are many myths and misconceptions surrounding it - myths that the Spratt Financial team have encountered countless times over our 30 years in operation. In this article, we aim to debunk some of the most common myths about risk insurance coverage (life, health, income protection, mortgage coverage, permanent disability etc) for Kiwis.

• Myth 1: Insurance is Only for the Elderly or Unhealthy

  • Reality: Insurance is for everyone, regardless of age or health status. From our 30 years of claims experience - accidents and illnesses do not discriminate by age and can happen to anyone at any time, sometimes with no warning signs whatsoever. Having tailored insurance coverage to the risks you actually face provides a crucial safety net for individuals and their families in times of need.

• Myth 2: Insurance is Too Expensive

  • Reality: While insurance premiums may seem costly at first glance, the financial consequences of not having insurance can be far greater. Insurance premiums are based on various factors, including age, health, occupation, and coverage amount, and there are often options available to tailor aspects of your cover to fit within most people's budget. You have nothing to lose by seeing what an adviser might be able to help you put together!

• Myth 3: I Don't Need Insurance Because I Have Savings

  • Reality: While savings are no doubt important, they may not always be sufficient to cover unexpected expenses resulting from accidents, illnesses, or other unforeseen events. While some believe that illness or accident is likely to result in either a quick recovery or be fatal, the reality is in most instances it results in a protracted disablement process. Over a potentially long term period of recovery where you are unable to continue earning a living - insurance can provide a means to protect savings and assets from being depleted in times of crisis.

• Myth 4: Insurance Doesn't Pay Out When You Need It

  • Reality: Insurance companies have a legal obligation to honor valid claims made by policyholders. And if you're with a specialist adviser such as us, we have a 99% successful claims record over our decades of operation in the NZ marketplace. As long as the policyholder has met the terms and conditions outlined in the policy, such as paying premiums on time and providing accurate information, legitimate claims are typically processed and paid out promptly.

• Myth 5: I'm Covered by ACC, So I Don't Need Additional Insurance

  • Reality: While ACC (Accident Compensation Corporation) provides coverage for accidents and injuries sustained in New Zealand, it does not cover all types of disabilities or illnesses. Additionally, ACC benefits may not be sufficient to replace lost income or cover ongoing expenses.

• Myth 6: I Don't Need Insurance Because I'm Young and Healthy

  • Reality: While youth and good health may reduce the risk of certain health issues, accidents and unforeseen events can still occur at any age. We've seen it happen time and time again. Securing insurance coverage while young and healthy can also result in lower premiums and fewer exclusions for pre-existing conditions. One of our staff was lucky enough to secure health insurance for himself at the age of 18 when he was young and healthy. A mere two years afterward, he was diagnosed with serious Crohn's Disease. Having the cover has over the forthcoming ten years saved him close to $60,000 in surgical, diagnostic and treatment costs and the premium he pays monthly is half of what it would be if he had taken out the policy after his diagnosis.

• Myth 7: Insurance is Complicated and Confusing

  • Reality: While insurance policies may contain legal language and complex terms, insurance advisers are available to help individuals understand their options and make informed decisions. Working with an experienced adviser can simplify the process of selecting and obtaining the right insurance coverage tailored to individual needs and circumstances.

By debunking these myths and working together with free professional insurance advice, individuals can make informed decisions to protect themselves and their loved ones with appropriate insurance coverage. Remember, insurance is a valuable tool for financial security and peace of mind, and it's never too early to start planning for the future.

The Importance of Medical Insurance: A $169,000 medical claim case study

In the unpredictable journey of life, unforeseen medical emergencies can quickly become financial disasters. Private Medical/Health Insurance is invaluable to have when faced with the exorbitant costs associated with comprehensive healthcare and getting you back on your feet. Spratt Insurance Brokers recently processed a medical insurance claim that exemplifies the significance of having adequate coverage, providing a stark reminder of the potential financial devastation without it, one of the highest claims ever processed by our agency (specifics and personal details have been withheld). The claim in question involved a myriad of medical and surgical procedures, a hospital stay, recovery and scans each carrying a substantial price tag. The breakdown of the expenses serves as a testament to the diverse and expensive nature of the care you may need at any time that you may not be able to afford out of your own pocket:

• Firstly, a Magnetic Resonance Imaging (MRI) was performed, incurring a cost of $2,870. This diagnostic tool is crucial for detailed imaging and diagnostics, but its expense highlights the financial challenges patients may face without insurance coverage.
• A Computed Tomography (CT) scan came with a price tag of $850. These imaging techniques are essential for accurate diagnosis and treatment planning.
• The heart of the claim lay in the surgeon's fee, a whopping $58,650. Life-saving surgical interventions can be financially crippling without insurance, making it clear that comprehensive coverage is indispensable in times of medical crisis.
• Intensive Care Unit (ICU) expenses amounted to $2,405.01, underlining the fact that even brief stays in specialized units can lead to astronomical bills. The peace of mind offered by medical insurance becomes apparent as it shields individuals from such financial strain during critical periods of recovery.
• The anaesthetist fee, totaling $30,797, showcases the multifaceted costs associated with surgical procedures.
• Implants, costing $5,995.61, and hospitalization expenses, including room and medical supplies, amounted to a staggering $68,000.26.

Spratt Insurance Brokers, understanding the significance of robust coverage, ensured that the entire medical bill of $169,567.88 was paid in full. This example serves as a poignant reminder of the financial protection that medical insurance provides, alleviating the burden of healthcare expenses and allowing individuals to focus on recovery rather than financial distress. If you are interested in sourcing the best in medical insurance for yourself, your family or a group scheme, our professional adviser team would be happy to assist.

Visit our official website for more information. Request a free quote or meeting on your Insurance needs.

Smart Strategies for Creating a Holiday Budget

The summer holiday season for us Kiwis is a time of joy, celebration, giving and BBQ on the beach. However, it's also a time when expenses can quickly add up, leaving many of us facing financial stress in the new year. To ensure a festive season without breaking the bank, creating an effective budget can be critical. In this article, we'll explore some smart strategies to help you create a budget that allows you to enjoy the holidays without compromising your financial well-being.

1. Assess Your Financial Situation:
Begin by evaluating your current financial standing. Take stock of your income, regular expenses, and any outstanding debts. Understanding your financial baseline is the first step in creating a realistic budget.

2. Set Clear Spending Limits:
Determine how much you can afford to spend on holiday-related expenses without jeopardizing your financial stability. Establish specific spending limits for gifts, decorations, food, and entertainment. Be realistic about what you can comfortably afford.

3. Create a Detailed List:
Compile a comprehensive list of all anticipated holiday expenses. Include everything from gifts and wrapping paper to travel and festive meals. Having a detailed list will help you allocate funds more effectively and reduce the risk of overspending. Then compare the actual levels of spending once they occur to your projected figures and calculate whether you are over or under-budget.

3. Prioritize Spending:
Identify the most important aspects of the holidays for you and your loved ones. Allocate a larger portion of your disposable budget to these priorities, ensuring that the essential elements are covered before moving on to less critical items.

4. Consider Homemade and DIY Gifts:
Get creative with your gift-giving by considering homemade or do-it-yourself (DIY) presents. Not only can these be more meaningful, but they also often come with a lower price tag. This approach adds a personal touch while keeping costs in check.

5. Take Advantage of Sales and Discounts:
Keep an eye out for holiday sales and discounts both online and in-store. Black Friday and Cyber Monday, for example, are prime opportunities to snag deals on gifts and decorations. Planning ahead allows you to take advantage of these promotions without succumbing to last-minute impulse purchases.

6. Use Cash Instead of Credit Where Possible:
While credit cards can be convenient, it's easy to lose track of spending when using plastic. Consider using cash for your holiday purchases to maintain better control over your budget. This way, you'll be more aware of how much you're spending and less likely to overspend. Plus, credit card debt incurs interest over time which cash purchases do not, so over the long haul, you'll be reducing your unnecessary spending on interest payments.

7. Start Early and Shop Strategically:
Begin your holiday shopping well in advance to avoid the stress of last-minute rushes. By spreading out your purchases, you can take advantage of sales and avoid the temptation to make impulse buys due to time constraints.

8. Plan Potluck Gatherings:
If you're hosting holiday events, consider making them potluck-style. This way, the financial burden of providing all the food and drinks doesn't fall solely on your shoulders. Encourage guests to contribute a dish, making the celebration more inclusive and cost-effective.

9. Review and Adjust as Needed:
Periodically review your budget throughout the holiday season. If you find that you're exceeding your planned spending in one area, consider adjusting allocations in other areas to stay within your overall budget.

With thoughtful planning and disciplined spending, it's entirely possible to have a joyful holiday season without overspending. By creating a realistic budget, prioritizing spending, and taking advantage of cost-saving strategies, you can ensure that the festivities bring happiness without the financial hangover in the new year. Cheers to a budget-friendly and joyous holiday season, merry Christmas and a Happy New Year!

The Insurance Advice We Give

With over 30 years of experience in the insurance field, our team specialises in problem-solving to ensure your financial independence remains intact during unexpected events and especially during challenging health situations.

In partnership with professionals and your own personal insight, along with trusted Solicitors and Accountants, we can create secure financial structures around your assets, ensuring your long-term plans are safeguarded.

When facing the uncertainties of disablement due to medical conditions, your reliance on earned income can be severely threatened. Maintaining your financial independence and funding amidst health challenges is paramount for your goals and your future. Here are the key factors we focus on to establish and regain control when faced with the disablement process:

1. Swift Access to Medical Support: Private medical insurance ensures immediate access to necessary medical advice, treatment, and technology without delay, providing peace of mind during critical times.
   
   
2. Control Your Debt Arrangements: We can help you be able to continue to service your loans in the early stages of disablement, reducing them significantly if your health continues to deteriorate and finally eliminating all debts in the event of your untimely impending or actual departure. This is where monthly mortgage repayment cover fits, along with lumpsums that pay out when a critical illness/condition is diagnosed, or if your disability becomes permanent.
   
   
3. Securing Artificial Income: Your ability to access a source of income becomes invaluable when earning your own living becomes impossible. This is where income protection fits, providing a stable source of income, enabling you to support dependents, completing retirement savings, and covering daily living expenses, ensuring your long-term projects stay on track.
   
   

Navigating the disablement process can be unpredictable, and it needs a more thorough set of appropriate structures and advice than many people think. By establishing proper structures, seeking expert advice, and selecting suitable insurance options, you regain control. Once control is regained, the Consolidation Stage begins as life continues, allowing your life to be addressed, resourced and funded as it continues.

The truth is that a holistic approach to the disablement process is necessary because, in our experience, the process is never predictable and never unfolds as you might expect. With our long term structured approach and comprehensive claims management we can ensure that your debt payments are met, solvency is established and ongoing needs are provided for. This can involve a complex claims process with multiple steps, which our service helps navigate for you. We take into account every facet of your needs from the lens of experienced industry professionals and help provide you with what you actually need at claim time, with no mistaken assumptions.

We specialise in a personalized approach, tailored to your unique situation. Let's meet to assess your current situation, evaluate existing resources, and discuss tailored solutions. We can and will also review Allied Professional Advice, existing structures like wills, trusts and guardianships, ensuring you and your dependents are well-prepared for the future.

Talk to an Adviser today.

Understanding Trauma Insurance: Types, Benefits, and Coverage in the New Zealand Marketplace.

Trauma insurance, also known as critical illness insurance, is a type of insurance policy designed to provide financial protection in the event of a critical illness or major health condition. In New Zealand, there are various types of trauma insurance policies available, each offering unique benefits and coverage. This article aims to shed light on the types of trauma insurance, their benefits, and the typical conditions covered in the New Zealand marketplace.

Types of Trauma Insurance

• Standalone Trauma Insurance: This policy solely focuses on critical illnesses and conditions, providing a lump-sum payment upon diagnosis of a covered condition.
• Trauma Insurance as a Rider/Addon: Some life insurance policies allow the addition of a trauma insurance rider, providing coverage for critical illnesses alongside the primary life insurance coverage as part of an overall bundled insurance policy. Sometimes securing multiple types of insurance under the same policy or from the same provider can result on better deals on premiums.
  
  

Benefits of Trauma Insurance

• Financial Support: Trauma insurance offers a tax-free lump sum payment upon the diagnosis of a covered condition. This payment can be utilized to cover medical expenses, rehabilitation costs, debts, or any other financial obligations during a difficult period.
• Flexibility in Usage: The lump-sum payment received from trauma insurance can be used at the policyholder's discretion, providing financial freedom to seek alternative treatments, hire caregivers, or even make lifestyle adjustments.
• Peace of Mind: Having trauma insurance offers peace of mind, knowing that you and your loved ones are financially protected against the potential financial burdens that may arise from critical illnesses.
  
  

Typical Conditions Covered

Trauma insurance policies in New Zealand typically cover a range of critical illnesses and conditions, including but not limited to:

• Cancers: Coverage for various types of cancer, such as breast cancer, lung cancer, prostate cancer, and more.
• Heart-related conditions: This includes heart attack, coronary artery bypass surgery, and cardiac arrest.
• Stroke: Coverage for a significant stroke resulting in permanent neurological deficit.
• Major Organ Transplant: Coverage for procedures involving the transplant of major organs, such as heart, liver, kidney, or lung.
• Paralysis: Coverage for conditions resulting in permanent and irreversible paralysis.
• Loss of Vision, Hearing, or Speech: Coverage for the loss of sight, hearing, or speech due to illness or injury.
• Various major surgeries or procedures: Make sure that you check your specific policy wording whenever you undergo any medical procedure or receive a diagnosis, as in some cases, in our experience people with active trauma cover have often been able to make a significant claim and not known about it.
  
  

Trauma insurance plays a crucial role in safeguarding individuals and their families against the financial implications of critical illnesses. In the New Zealand marketplace, there are various types of trauma insurance policies available, offering benefits such as financial support, flexibility in usage, and peace of mind. Understanding the coverage and conditions included in trauma insurance can help individuals make informed decisions about their insurance needs and secure their financial well-being if anything severe does go wrong with their health.

Sometimes people can make the assumption that a severe health event will result in either a recovery or an unfortunate passing, but from 30 years in the Insurance Marketplace, this is not often the case. In fact, the most likely outcome is a protracted period of disablement during which you may no longer be able to continue earning an income. With a lump-sum trauma insurance claim though, your financial worries will be alleviated, allowing you to focus on your recovery and continue to provide for your loved ones and dependants.

*Please note that the coverage, conditions, and benefits of trauma insurance may vary between insurance providers. It is recommended to consult with a qualified insurance advisor or provider to understand the specific details of a policy before making a purchase

Investment Updates Q3 2022

Here are the latest Investment points, updates and commentaries from our Investment partners at Cambridge Partners. At the heart of Cambridge's Investment philosophy is making every decision in their clients' best interests and working with clients to develop an investment strategy that best fits their circumstances. 

1. The Sustainability Opportunity

Sustainability goes beyond reducing, reusing and recycling. Today more than ever, investors are calling for sustainability opportunities, and markets are answering. But investing isn't as simple as paper over plastic in the checkout line. Read More Here.

2. Key Market Movements

Volatility remained high through the third quarter of 2022 as markets priced in changing expectations on the economic impact of rapidly rising interest rates, increased European energy uncertainty and the lingering effects of COVID-19. Read More Here.

3. Economic Commentary - Q3 - 2022

The global economy has been hit by multiple challenges in 2022. Amidst sharply increasing inflation , tight labour markets, rapidly rising interest rates, ongoing uncertainties surrounding the continued war in Ukraine and the lingering pandemic, the global economy has puttered its way through the year. Read the full commentary for Q3 here.

4. Spreading Investment Risks with Diversification

Investing comes with risk. It's not necessarily a bad thing, but you need to understand the risk levels associated with different types of investments and be comfortable with a level that suits your appetite. As Financial advisers, determining your risk profile is an important aspect when we first meet. There are two main components to this: your financial capacity and your emotional capacity. Read more about diversification and its benefits here.

Surgical Waitlists in NZ - Health Insurance

Surgical wait lists

Due to the effects of COVID, closed borders and a staff shortage, New Zealand is currently experiencing a crisis of long waitlists for elective surgeries in public hospitals. 

Moreover, they are now growing longer and longer with the increase in COVID and Flu cases in the winter months. Hospitals around the country have also slashed elective surgery theatre operations due to the pandemic. And even those that are scheduled, many are cancelled or deferred at the last minute as a result of staff illness or hospital bed shortages.

In early May the wait list had grown to 27,000 for planned, non-acute treatment, up from 8000 in February 2020 before the first Covid arrivals in NZ and subsequent lockdowns took hold. One Christchurch based surgeon said there are over 6000 people waiting for elective hip. Over a recent 8-week period he would have expected to have completed over a dozen hip or new operations – in reality he performed just one.

It is certainly true that the Private Health care system and hospitals aren’t immune from delays in the current taxing environment, but they still do provide much more certainty, which means a good private health insurance plan remains the best way to ensure that you get the treatment you need with the minimum possible delay if something goes wrong with your health. 

With numerous individual and group plans available for you, your family, your business or your employees, we can help you get covered at the best prices today with a free, no obligation consultation on your insurance needs. Don't get waitlisted, let us help today.

Contact us for a free, no obligation quote today.

Insurance Advice and Tips from the Spratt Financial Team

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 serious illness, long term disablement or injury. 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 to provide for all of your financial needs, here are the questions you should know the answers to:

WHAT WILL YOU NEED THE INSURANCE 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.

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.

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.

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.

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.

WHAT SHOULD YOU DO? 

What have we learned? We recommend that you use our 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. Use our experienced professionals if you need guidance or advice – our service is completely free and no obligation, so you have nothing to lose!

HOW DO I GET STARTED?

For more information on how Spratt Financial’s team of advisers can assist with managing your insurance program,  use our contact form below. You can also contact us by calling 09 307 8200 or by email at enquiry@sprattfinancial.co.nz.

Attraction and Retention - Solving an Employer Challenge

Small and Medium Sized Businesses (SME’s) are the lifeblood of the New Zealand economy, with over 470,000 SME’s employing over 584,000 staff. Much has been made recently of the staff shortages NZ businesses are experiencing, and the predicted “great resignation’’ once the borders open after prolonged closure. In a tight labour market, employers are always looking for new ways to attract and retain talent. A recent global wellbeing survey indicated that 82% of organisations believe wellbeing is important within their company. However, 'wellbeing' can have can have different meanings to different people.

Two meanings that are universally accepted in relation to it are Health Wellbeing, and Financial Wellbeing.  Employers can provide this wellbeing via “Employee" insurance programs that provide staff with Health insurance benefits so they can get better and back to work faster with insurance benefits that pay cash to staff should they suffer a major illness or disability, relieving financial worry and stress. 

Employee or “Group” insurance places value on employees’ wellbeing and shows that their employers genuinely care about them. If you are an employer with at least 5 employees, it’s a fantastic gesture to build loyalty, retain staff and reward them for their hard work. These plans also have the valuable advantage of providing a higher level of coverage, and at a much lower premium cost than an individual employee could access themselves.

A recent report by the Financial Services Council of New Zealand shows that “Group" insurance for employees is one of the fastest growing sectors of the insurance industry. This is because more and more employers realise the value it holds for employees from internationally mobile staff through to blue collar workers, and what great value it represents on ROI per dollar spent (cost is usually well below 1% of remuneration expenditure). Group medical insurance schemes are also available and are generally an exceptional and cost-effective option that gives your employees medical cover at lower costs than they could access themselves.

To find out more, or to receive a free no obligation consultation or quote you can contact our specialist Employee Benefits adviser to see how we can help you today. 

Peter Wilkening
Insurance Adviser 
(021) 190 5185
peter.wilkening@sprattfinancial.co.nz

Covid-19 and your Insurance: WHEN TO REVIEW YOUR INSURANCE AND WHEN TO MAKE CHANGES.

In the wake of the Covid-19 pandemic and spending many weeks and months in lockdown, many of us have undergone significant and impactful life changes. Our financial situation might be different, our job or employment role may have changed and we may be facing both new challenges and opportunities. moving forward. This could mean that now is a great time to review your insurance cover, what you have, what you need and if there could be better options out there for your new post-Covid life circumstances.

If you have current insurance, there may be clauses in your policy (life, critical illness, permanent disablement, medical insurance, income protection etc.) that allow you to make changes quickly and easily, without any additional medical tests or screenings. These clauses can be triggered if you have experienced certain special events in the last 12 months. These events include:

• Having a child (by birth or legal adoption) or become responsible for the care of a family member.
• Getting married.
• Getting divorced.
• Supporting a dependent child through a first course of full time tertiary education.
• Commencement of secondary school education for the first time by your child (if you are the life assured of your policy).
• Taking out or increasing a home loan, residential investment, vacation home or bare block of zoned land as residential.
• Becoming responsible for the full time care or payment for long term care of a close relative.
• Annual salary increase.
• Death of a spouse or de facto partner.
• You take out a new home loan or increasing an existing one.
• You gain a significant salary increase of 10% or more.
• Your spouse or partner passes away.
• You get married or finalise a divorce.
• You undergo significant changes to your personal financial situation.

Even if you don’t meet these particular criteria, the Spratt Financial team can help you make the needed changes quickly and efficiently with no hassle. We can also conduct a free, no obligation review to find out if you’re still getting the best deal possible and hopefully save you some money on your insurance cover.

We take the time regularly to review policies and make sure they still fit your unique needs and lifestyle, but we encourage you to contact us anytime something changes in your life and you want to ensure your cover still fits as it should. All aspects of our insurance service are completely free to you and we are always happy to help. Email us here, fill out our online contact form below or call us any time at 09 307 8200.

Contact our team to find out if your Insurance contains Special Events Clauses today.
Find out more about the insurance options we can provide.