Study: New Zealanders heavily under insured.

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

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

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

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

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

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

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

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

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

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

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

Make an enquiry about your insurance needs today.

Visit our website for more information.

Introduction to Our Lending Services

One of the key components of our business is the array of lending services we offer. If there's a project or a goal of yours that you require funding for, why not come to us? Our advisors have a wealth of experience from senior positions in the banking industry; specialising in both residential and commercial lending.

Our technical knowledge, coupled with our negotiating expertise, will always ensure the most beneficial conditions for our clients. You can depend on us to source and structure your loan on the most favourable possible terms to you, taking much of the legwork out of your hands.

Residential & Commercial Mortgages

Whether you’re purchasing a new property or refinancing existing assets, we can offer you competitive fees, the lowest possible interest rates and best possible loan to value ratios. When it comes time to invest in property, we can take some of the stress out of your hands and help secure the best possible deal for you.

Asset Funding

Asset funding is a type of financing where assets are converted into cash in exchange for a security interest in those assets. Spratt Financial Services provides a comprehensive array of private equity services tailored to your specific needs. Our products and services have been specifically crafted to ensure clients get the maximum possible benefit from the skills of leading investment managers.

Debt Restructuring

The debt advisory services we offer help clients to determine the best debt management strategy, select the right products and providers and do business on the best terms. Our method is to work in close partnership with clients to develop a comprehensive set of the best possible financing solutions for your debt. We then work with you to assess each option thoroughly, choosing the right option for you and then implementing the preferred resolution.


 Other services we can offer include:

• Nominee, Private & Company Funding.
• Investment Property Funding.

Email us today. 

Visit our website for more information.

 

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

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

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

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

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

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

Email us today for help with your insurance.

Visit our company website for more information.

Health Insurance FAQ

Here are the questions we have heard most often over the years regarding health insurance (aka medical insurance). Look for future FAQs to deal with questions about other forms of cover.
 

Do I Really Need 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 is by taking out health and medical insurance. Although cover may seem unnecessary from a short sighted mindset, the alternative of having to bear the burden of excessive treatment expenses can make the cost of premiums a small price to pay in the long run. Not having it is taking a chance. From my own personal point of view, having health cover has spared me over $20,000 in costs after I was unexpectedly diagnosed with Crohn's Disease. Before that, I was completely healthy with no real health issues. It can happen, and it can ruin lives. Make an informed decision.
 

Which type of Health Cover is best for me?

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 hospitalisation 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, it will depend on personal factors in your life. Do some research, or get in contact and our advisers can take you through the options completely free and with no obligation.
 

Which company has the best Health 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 when insuring your family, 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. In general though, both Southern Cross's VIP Plans and Sovereign Assurance's Majorcare can be relied upon as excellent options.
 

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. In general, an excess of some sort is generally a good idea.
 

How much can I claim?
Your policy will have a ceiling amount that you can claim per operation or procedure, and these amounts are variable based on the type of cover and the company providing the insurance plan. These limits are designed to be high, in order to accommodate almost every possible medical scenario.  

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.

Are there alternatives to Medical Cover?

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, even one of which could be crippling to your financial prosperity to pay out of your own pocket. So unless you have significant savings, medical insurance is almost essential.

How much will my premiums increase annually?

Again this will depend on the choice of company. 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.

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.

If you have any questions regarding your insurance, feel free to post a comment below or get in contact with us, we'd be happy to help.

Email us today for help with your insurance.

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Insurance: Why cheaper is not always better

Sometimes when selecting their insurance, people are inclined to gravitate immediately to the cheapest possible option. Cheaper is better right? Well, we definitely understand the desire to have more money in pocket, but in the insurance market, the best way to accomplish this may not actually be to dive straight in to the cheapest cover. What is crucial to know is that whilst insurance premium costs can sometimes be daunting, there are factors that are often neglected that can dwarf these costs in the long run. Unfortunately, when it comes to insurance, cheaper is definitely not always better.

One of the most important factors we look at when we seek out a policy for a client is how the insurer will perform at claim time. If a policy is cheap but the insurer will throw up obstacles when it comes time to claim on your policy, the cost both financially and emotionally can be immense. Our advice does take cost into consideration and always attempts to secure our clients the best possible deal, but from a larger and more beneficial perspective. We know that you don't want to be fighting battles with your insurer during your most stressful times, and even more crucially, we know that when things go wrong in your life, you need assurance that you will be supported financially promptly and with the minimum of concern.

Some insurers also can be more trying than others in their requirements for not only claims, but aspects such as policy alteration, changing direct debits, increasing, adding cover or underwriting. Your insurance needs to work for you, and do its job to cover your financial assets in the event of medical issues or permanent disablement, and sometimes it is worth spending a few extra dollars to secure the best possible service in all aspects.

With a bit of searching, research and a bit of professional advice, you can get insurance that's both effective and affordable. It just takes some time and a bit of inside help. We're happy to be that help. If you have any questions or concerns about what you're getting from your insurance let us know.

Email us today.

Visit our company website for more information.

New Zealand vs. England T20 Cricket, Eden Park

I had the privilege of seeing the first T20 at Eden Park on Saturday night as the Black Caps took on England. There was some incredible hitting on show, as you can see in this video. With this many balls being smacked into the crowd, who knew that cricket was something you should have life insurance before attending? Perhaps we should send our team of professional advisors to the next game in Hamilton on Tuesday night. :)

Case Study: How you can be protected from the effects of critical illness.

Although the names have been changed, this case study about Justin and his business is a real life case from our archives. It helps to highlight the impact that having robust, accurate advice and insurance made when Justin, the company’s managing director, was diagnosed with a terminal illness. It also serves to highlight the impact and necessity of a good, specifically tailored insurance plan can protect your hard work when unforeseen events arise.

  

•          Justin held the key position of Managing Director of ABC Engineering, a Wellington based company specializing in production services.
•          ABC Engineering employed a total staff of sixteen workers, and had an annual turnover of $3.9 million.
•          Justin’s role also encompassed establishing and maintaining critical client relationships. A large portion of the company’s income was directly attributed to Justin’s relationships with several major clients.
•          The company had estimated the amount of time needed to effectively replace Justin’s critical business role at six months.

The Disability Claim

When Justin found himself unable to work due to his illness, his salary from ABC Engineering was discontinued. In the absence of the specially configured protection from Spratt Financial, he and his family would have found themselves unable to support themselves through their trying time. Thankfully, Justin had enlisted us to provide him with protection, and our tailored cover ensured that:

•          A disability claim was paid after only four days for five weeks (hospitalization benefit) and was started again after seventeen weeks, at the end of the waiting period.
•         A personal income of $9,250 per month was paid to Justin so that his family was supported financially.
•         No financial evidence or complicated procedures were required for the claim.

The Trauma Claim

Within 26 days of initial exploratory surgery in July 1993:

•          ABC Engineering received $350,000 which cleared all critical debt, covered revenue for three months and provided recruitment costs.
•          Justin’s family received $160,000 which cleared all debt and created an income reserve of $56,000.

The Permanent Disability Claim

21 months into Justin’s ongoing illness:

•          The business received $550,000, which gave them capital to reinvest into maintaining their competitive edge in the marketplace.
•          Justin’s family received $150,000 which safeguarded his daughter’s education and provided a significant cash reserve for his family.

Terminal Illness Claim

•       ABC Engineering received a further $300,000, creating further revenue for the business.
•       Justin’s family received the remainder of its entitlement; $1,026,000 in total, which paid financial expenses, professional fees and created a significant capital reserve for family income.

During that time, and to this day, the following people kept their client, ensuring that that the benefits of our protection extended outside of even Justin, his family and his business:

•          Justin’s accountant.
•          Justin’s solicitor.
•          Justin’s financial planner.
•          Justin’s bankers.

The insurance that we provided formed a key part of ABC Engineering’s survival plan. Because of the protection we tailored, Justin’s company was able to command its own destiny by being able to control debt and having the funds allocated to protect the future prosperity of the business. The key point about this case is the benefits that having a tailored plan extended not merely to Justin himself but to his family and to his entire business and employees. At the end of the day, we were happy to help and even happier to see that what could have been a calamitous time was made easier for Justin, his family and his business.

Email us today.

Visit our official company website for more information.

Welcome to the Spratt Financial Services Blog

Welcome to the official blog of Spratt Financial Services. We specialise in Insurance, Investment and Lending solutions for New Zealanders. We have a team of trained professional advisors here to guide you towards financial security and prosperity. We have locations in the CBD of Auckland City and Christchurch, giving us a base to provide our services across the length and breadth of New Zealand.

This blog will keep you regularly updated with news and advice from the world of insurance and finance. Not only that, but we will be featuring articles, news, current events and less serious posts we hope you find interesting and thought provoking.

A recent study showed that 60% of surveyed New Zealanders find the prospect of securing insurance daunting. Our aim is to make it easier. Not just that, but we aim to get you the best possible results from your insurance at the best possible prices. With our support and our team on hand, we can help you get there and we hope our blog archives and information will help too.

Feel free at any time to post a comment or get in contact, and our team of professional advisors will be at your disposal to give you the answers you're looking for. Also, check out our official website for more detailed information on the practical solutions we can offer.

Popular Articles from our Archives:

Frequently asked Health Insurance questions.

Critical Illness Statistics: What are the chances of suffering a serious illness?

How to place your Southern Cross Health Insurance on hold while overseas.

Controversy about higher life insurance premiums for depression.

Staying Healthy: Weight Loss Tips.

Five Sticky Situations that insurance could bail you out of.