Is Your Current Insurance Sufficient?

After 20 years working in the Insurance industry, there is one thing about insurance of which we am absolutely convinced. Insurance works best when it is used as the funding 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 and you want to know whether your insurance package will really be sufficient for your needs, here are the questions you should know the answers to:

What Will You Need The Cover For?

Specifically, use a pen and paper and write down what the claim proceeds will be used for when they are paid out. If you can't do this now before tragedy strikes then you may be facing trouble later.

Will You Be Able To Claim Soon Enough?

Death cover pays out in the event of actual or impending "medical death". However, we know that 94% of all deaths are due to medical conditions not accidents and 65% 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 death 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 It Enough Of A Claim?

It may sound strange, but a $250,000 insurance claim may not be enough to repay a $250,000 mortgage even assuming you want to repay all of it. 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.

Do You Have The Right Insurance?

This applies to the type of income protection policy you may or may not have, what your health insurance actually covers or the way that permanent disability or critical illness components are structured within the overall portfolio of insurance. These two components may or may not reduce the remaining life cover once they have paid out which could create major problems at the very end of the disablement process.

Even assuming that you or someone close to you will be physically, mentally and emotionally capable of applying the claim proceeds to the predetermined targets is not supported by our experience of dealing with over 160 claims.

What is the best way of answering these questions fully? 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.

For more information on how our team of advisors can assist with managing your insurance program, contact us by calling 09 307 8200 or by email at enquiry@sprattfinancial.co.nz.

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Building a plan to protect your business and estate.

If you are the owner of an estate or you manage a business, have you ever thought about what would happen should a tragic and unforeseen deterioration of your health occurs? As insurance professionals, we have seen it happen all too often. As a result of our experience, the number one piece of advice we could give to home or business owners is to put in place a plan using insurance resources. A well worked and comprehensive insurance plan can re-establish control of your finances, leave your estate in your own hands and restore financial balance for you and your family.
Once something goes seriously wrong with your health, well-being and current financial situation, you should look to achieve the following goals in the face of what may well be your most overwhelming adversity: 

• To have the greatest possible access to medical advice, treatment and technology so that you can get yourself well, back on your feet and hopefully limit the effect of the disablement process on your career, income, lifestyle and dependents;
• To be able to control debt as soon into the disablement process as possible. To eliminate or significant reduce outstanding debts and financial obligations.
• To create a certain source of income that will fund your lifestyle and keep your house and/or your business in your hands.

We can attest to just how difficult this has been for many people who have "gone it alone", mistakenly thinking and backing themselves to carry out many of these tasks and functions after their health has come apart at the seams without the necessary insurance. If you are so sick that you can't actually carry out the many vital roles and functions that still need to be carried out within your business, family and estate, then failure, and devastating failure at that, awaits the unwary and unprepared.
 
Our clear and certain belief is that insurance works best when it is used as the basis for a plan that is intended to protect a business, a family or an estate when tragic deterioration of an individual's health occurs. The three goals listed above can be accomplished by having the right type of insurance in place, customised and personalised to your unique situation.  As insurance professionals, we can help you build the right plan for your unique situation and life circumstances. Our capable team does this everyday and have the soundest professional processes in place. Your personal plan should contain the answer to four questions:

• What needs to be protected?
• Who is to do it?
• What authority do they need to act for you?
• Where does the funding that you will need come from?

We can help give you answers to all of these questions. With the right insurance, the funds you require in your time of need will be taken care of. We can help source the best and most competitive insurance on the market from the most reputable sources. Use our skilled and experienced professionals, construct a plan and shield against the risk of losing your most important assets.

If you need help with your plan to protect your business and estate, don't hesitate to contact us at enquiry@sprattfinancial.co.nz or by calling (09) 307 8200.

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Read more about the sobering statistics of critical illness in New Zealand.

New Zealand's Unique Investment Advantages

As New Zealanders, we should wake up each morning thankful to live in such a beautiful country. Our scenic wonders are unmatched and we are internationally regarded as a prime and sought after tourist destination. However, our environment and our people aren't all we have to offer. New Zealand also offers unique advantages in business, and our investment environment is safe and prosperous. This article will investigate why New Zealand is a great place for your investments.

Key Awards and Statistics

An under reported fact is that New Zealand has recently ranked first in the world in three investment categories:

1. Protecting Investors (World Bank Doing Business Report 2013)
2. Starting a Business (World Bank Doing Business Report 2013)
3. Lack of Corruption (Transparency International Corruption Index 2012)

Anti corruption agency Transparency International continues to rank New Zealand as Number One for honesty and integrity in its public sector, having now achieved this status for seven consecutive years. Thus, New Zealand offers an unmatched record of safety for your investments that currently no other country can match.

Our economy is in a stronger position than many western economies, having weathered the brunt of the world economic crisis and emerged in a healthier state when compared to states in the European Union and the USA. Whilst no economy can be said to be invulnerable, we are relatively isolated from the travails in Europe and the US and have strong ties to emerging and thriving economies in Asia.

We boast a wide range of free trade agreements with other nations, a simple tax code (the third lowest in the OECD in terms of time taken for taxpayers to comply with tax obligations, December 2010) and an absence of import tariffs or Government subsidies, facilitating both domestic and foreign investment.

List of Nations New Zealand has Free Trade Agreements With:

- China
- Australia
- Vietnam
- Phillipines
- Cambodia
- Brunei
- Indonesia
- Hong Kong
- Myanmar
- Thailand
- Malaysia
- Laos
- Singapore
- Chile

Negotiations are also under way with India, Korea, Russia, Belarus and Kazakhstan, and New Zealand is a key driver behind the Trans Pacific Partnership.

A 'Can Do' Culture

If you need an environment that fosters success, banishes negativity and finds innovative solutions all built upon a foundation of entrepreneurship, dedication and hard work, New Zealand is the place. As a smaller nation of less than 5 million people, New Zealand achieves big on the world stage even with fewer resources than its chief competitors. This is a testament to the attitude of the New Zealand people and the positive business environment they have cultivated, in which more is made from less and we seldom take no for an answer!

Esteemed Position and Strong Currency

Finally, New Zealand is among the top 20 rated sovereign nations in the world. Standard and Poors gives New Zealand an AA+ Local Currency Rating, an AA foreign currency rating and an AAA T&C assessment. Furthermore, the New Zealand dollar is trading very strongly against the $US the Pound Sterling and the Euro, meaning that making New Zealand dollars through investments will go a long way in the international marketplace.

Source Credit: http://www.nzte.govt.nz/en/invest/new-zealands-investment-advantage/

If you are interested in making investments and taking advantage of our country's unique advantages, email Ross Wallace (Authorised Financial Adviser) at ross@spratt.co.nz.

Find out more about our investment services.

Ross Wallace (AFA) profile.

Highest health insurance payouts 2012.

"Southern Cross' biggest health insurance payout last year was for a spinal surgery costing $160,000, its latest statistics reveal.

Another spinal surgery cost $151,000 and $100,000 was paid out for a larynx removal.

Cancer, heart disease and spinal conditions were the causes of the highest health insurance claims paid by the association.

All of the patients who made the top 10 highest claims were aged over 64. The oldest was 76.

Chief executive Peter Tynan said it demonstrated the value of insurance. “No one wants to be ill but, if the unexpected happens and you need timely access to treatment, it can be very comforting to have the financial aspect taken care of.”

Those aged under 30 put in a high number of claims for tonsillectomies and dental procedures, for women aged 20-39 endometriosis surgery was common and for people over 50, hip and knee replacements, cataract extraction and skin lesion removals were in high demand.

Tynan said: “If they choose to self-insure, people should have realistic expectations of what they’ll need.”

A survey carried out by Southern Cross last year revealed that 79% of New Zealanders thought they would have to pay for some of their elective healthcare in retirement. But only one in five had started saving and many thought that savings of less than $10,000 would be sufficient."

Original Article Here.

It's always interesting to get a look at figures such as these. Imagine the burden of having to take on those kind of costs by yourself after retirement. The point about self insurance is interesting too, and it plays into a point I have discussed at other times on this blog. New Zealander's sometimes can lack perspective on just how prohibitive illness can be. This is due to a combination of factors, such as inadequate proliferation of the statistics and case studies involved, as well as a strong, independent, yet sometimes wrong headed 'she'll be right' sort of attitude. This attitude has seen Kiwis take on and achieve incredible feats, but it doesn't work so well when applied to your health, your ability to earn and protecting your family or your business from very real risks.

We certainly hope these risks are taken into account and that some of these figures demonstrate that savings of less than $10,000 certainly won't be enough if serious illness rears its ugly head.

Talk to us today about your insurance needs.

Taking medical 'rationing' off the table with health insurance.

Article courtesy of Good Returns.

Two friends have had cancer recently. I use the term “had” in the most optimistic sense. Because although they are both cancer-free, we simply don’t know how long that will last.

For one of my friends their case was similar to a case widely reported in the news media – the doctor has been told off by the Medical Council for not sending his patient for further tests sooner. The client, who fortunately remains alive, has diminished chances of recovering from their cancer because of the delayed detection.

Why does this happen?

Obviously, for the case reported in the media the patient felt strongly enough about it to make a complaint. They must have wondered why their care was not better. 

Is it malpractice?

We simply cannot know enough from the reports to tell, but it does seem like better care should have been taken, it also seems like the punishment handed out was very minor.

Is it just the odds?

Perhaps this is a fine question of judgement, a genuine edge case where the decision could have gone either way.

Is it a reasoned response to the risk of false positives?

As not everyone can be tested every year for every possible disorder some choices have to be made. In some cases there is the risk of false positives to consider, and some tests – like biopsies – carry health risks of their own.

Is it rationing?

That’s the fear: rationing. It’s hard enough coping with the idea of ill health, the possibility of a potentially fatal illness, without having to second guess your doctor – are they not sending me for that test because I don’t need it, or because of the cost to the state sector.

In both of my friend’s cases the immediate treatment once diagnosed was very good, it was just the question of getting a diagnosis.

Of course, the easiest way to take the risk of rationing off the table is to insure it. I’d want to insure it all and have every form of medical cover I can possibly buy – including cover for treatment overseas – but if you are working with a client at the other end of the spectrum, I’d at least get specialists and tests cover." 

In general, the public system does a fantastic job with what it has (as the article admits, the treatment itself is top drawer), but sometimes it just isn't enough and cases such as those described here will slip through the cracks. In my own case, I have seen the benefits of having health insurance when I was diagnosed with Crohn's Disease (full story here) and in my case, having tests and specialist cover as well as basic hospitalisation cover gave me a financial safety blanket and protected me from over $20,000 worth of costs, as well as securing me the best and most prompt treatment available from the private system.

Having the full range of health insurance options is a somewhat costly proposition and we do realise this (although it is no doubt a good thing to cover all your bases in terms of your health). However, there are cost effective and assuredly worthwhile options such as the one I have selected for myself; a combination of basic hospitalisation, surgical cover as well as tests and specialists. The premium is definitely affordable, and it has already, at the age of 27, paid off for me many times over. 

Overall, its always a good idea to take the possibility of delayed diagnosis and rationing off the table as well as protecting from the cost of unforeseen health issues. Don't hesitate to get in contact and let us take the legwork out of securing the health insurance that's right for you.

Email us today at enquiry@sprattfinancial.co.nz

What is Mortgage Instalment Insurance?

Most people are aware of the main types of insurance related to risk (life insurance, health insurance, income protection), but there are equally valuable but lesser known types of insurance which can be of great use in protecting your assets for a cheap price. In this case, mortgage instalment insurance can specifically cover mortgage repayments, safeguarding your home and your lifestyle in the face of unforeseen events.

- Mortgage Instalment Insurance pays your monthly mortgage repayments in the event that you become disabled due to illness or injury. Mortgage Insurance gives you four different payment period options each with different premium costs. The options are to have the insurance pay your mortgage repayments for a period of 2 years, 5 years, until the age of 65 or until the age of 70. 2 years will result in the cheapest monthly premiums, 5 years will be more expensive, and payments until the age of 65 or 70 will be the most expensive options.

- There is also an option to choose Redundancy Cover, which also covers your payments in the event that you are made redundant from your job. Redundancy cover will meet your mortgage payments for a period of six months to allow you adequate time to transition to new employment.

- Mortgage Instalment Insurance will pay 110% of your monthly mortgage repayment, calculated at the time of taking out your insurance policy. This is designed to cover any interest rate rises, as well as additional expenses such as land rates.

- If your personal circumstances or your repayment amount changes, you can contact us or your insurance provider to re-assess your cover.

- Mortgage Instalment Insurance is a more specified form of insurance that only covers mortgage repayments in the event of illness, injury or redundancy. Because of this, it is a considerably cheaper option than taking out more general lump sum insurance cover. Your home is the most important asset you have, and mortgage instalment insurance offers a simple and cost effective way to ensure your home will not slip from your hands in the event of unforeseen circumstances. We think it is well worth considering.

If you are interested in securing Mortgage Instalment Insurance or you have any further questions on if this type of cover is right for you, don't hesitate to get in contact with us anytime and secure your mortgage at the lowest possible price.

Get in contact today: enquiry@sprattfinancial.co.nz

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Your house is simply too valuable to lose.

Tell us your personal insurance story.

If you or one you love has been through a trying time where having health insurance, life insurance or income protection has helped you out, please tell us your story! You could be featured in a blog post or on our official website. We always love to hear from you, so drop us a line anytime!

Send us an email: enquiry@sprattfinancial.co.nz

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How medical insurance spared me from disaster.

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

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

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

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

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

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

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

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

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

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

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

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

Email us today.

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