New Cancer Treatment Benefit - Is It Right for You?

In response to escalating cancer treatment costs in New Zealand, as well as the inability of many people to afford both a full medical insurance and trauma policy, a new and specific cancer benefit option has been released. As much as 62% of a major insurer's trauma insurance claims were for various forms of cancer, and with the new Cancer Benefit, New Zealanders now have an effective and quality new option to give them the best treatments available.

62% of trauma insurance claims from a major insurer were for cancer.

The new Cancer Benefit can be added to a Trauma Insurance policy and covers you for $500,000 worth of surgical and non-surgical cancer treatment. Crucially, this new benefit covers both Pharmac and Non-Pharmac approved drugs, giving you more options for cancer treatment and covering new and more expensive treatments such as Immunotherapy. The benefit can also come with an optional add-on Specialist and Tests benefit that will cover additional specialist consultations and diagnostics procedures up to $5,000 per policy. If you have children, they can also be covered with their own cancer benefit for no additional cost until the age of 16, making this a great option for families as well.

The Cancer Benefit allows access to new and expensive cancer treatments like Immunotherapy.

The new Cancer Benefit may be right for you if:

1. The costs of both a full Trauma Insurance and Medical Insurance policy are prohibitive.
2. You wish to gain access to new and/or more expensive cancer treatments in the event of a diagnosis.
3. You have children and wish them to have access to outlined insurance protection.
4. You are looking for a cheaper or more specific option than a full medical insurance policy.
5. You want additional, inexpensive cover in addition to a Trauma Insurance policy to give you more options and funds if diagnosed.

Our team is available anytime if you are interested in the new Cancer Benefit or have any further questions about it. We also offer full claims management service to take the stress out of your hands at claim time. Contact us anytime at enquiry@sprattfinancial.co.nz, use our contact form here or call us at 09 307 8200.

How to Avoid Your Insurance Claims Being Denied.

Sometimes, people can get the image of insurance companies as money hungry corporate folk looking for any possible reason to deny all possible claims. Fortunately though, in the risk insurance market in New Zealand, that image doesn't hold true. The major reputable insurance providers that we deal with have a great record of paying out claims that are owed, provided they meet the specific conditions of the policy (which is why it's always a good idea to read the policy wording and know exactly what's covered).

In general, there are only a few reasons why your insurance claim could get denied, and as long as you avoid them, you can strongly depend on your insurance paying out when you need it during your difficult times.

1. Non-Disclosure: If you have a personal risk insurance policy and suffer injury or illness due to a condition you had prior to taking out your policy, and you failed to disclose this on your original applications, the insurance provider could reduce your claim or deny it entirely. We take considerable time with our clients to go through these forms and make sure every base is covered, but if you are going it alone, here are some things to keep in mind:

• Declare everything, no matter how small or minute you may think it is. If the condition isn't deemed to be serious by the insurers, your policy won't be affected in any way by declaring these things.
• Consult with your personal doctor or specialist first to remember any health issues you may have forgotten about.
• It is never a good idea to lie about current health status (or not being a smoker) to save money on premiums. The insurance company will find out upon claims (they are generally thorough) and will reduce or deny your claim because of it.
• You do not have to disclose conditions you develop after the policy is taken out and they will not affect the premiums you pay or any claims you take out. This is a good reason for you to consider taking out insurance when you are younger and healthier.

Proper and full disclosure may be the most important thing when taking out a policy.

2. Premiums Haven't Been Paid: An insurance policy is a contract between you and the insurer, which states that they will pay agreed upon amounts if its conditions are met. One of those conditions is the prompt and up to date payment of the agreed upon premium (the cost of the insurance policy). If the premiums haven't been paid up to date before the claim is formally requested, the insurance company may deny them or ask for payment before the claim is processed. Thus, its important not to get too far behind on your insurance payments as this is generally one of the only reasons claims get denied.

3. Conditions Have Not Been Met: If the specific condition or occurrence you're trying to claim for is not specifically covered under your policy, the claim will be denied. Sometimes a specific medical condition for instance can range in severity, and if the severity of your condition doesn't meet that specified in the policy, it won't qualify for a claim. The good news is, all of these details will always be specifically and thoroughly outlined in your policy wordings, so reading it thoroughly before, during and after taking out your policy is always highly recommended by our team.

In our more than two decades in the insurance industry we can assure you that insurance companies aren't looking to deny your claims. In return, their expectations of you are that you are honest, truthful and complete in your disclosures and maintain the agreed upon payments for the policy. If you have done so, you can rest assured that you will have very little to worry about when it comes time to make a claim.

www.sprattfinancial.co.nz

NZ Market and Interest Rates Update and Analysis

It's an age old question: What are interest rates going to do? The answer to this question influences decisions for investors and borrowers alike, mostly around the length of time to commit to in order to maximise income or minimise borrowing costs. While interest rates in the United States have started to move upwards, what is in store for New Zealand?

New Zealand's Official Cash Rate (OCR) currently sits at an historic low as our Reserve Bank has struggled to get inflation up into its 1-3% target range. However, the low interest rates have helped the local economy pick up strongly. This has been aided by significant migration into New Zealand. Yet the increase in migration, whilst giving a boost to the economy, has also supplied additional workers, helping to limit wage increases. Additionally, the resilient New Zealand dollar is helping to keep import prices from rising too fast. The result is that the Reserve Bank will want to ensure that inflation is not only seen in action but also likely to persist before contemplating raising interest rates. For these reasons, while a turn in interest rates is in order, the OCR is unlikely to actually begin rising until later in 2017 at the earliest, with some economists even suggesting not until 2019. When the OCR finally does begin to rise, it will be good news for savers and the increasing number of New Zealanders enjoying their retirement years. In the meantime, at least New Zealand's rates remain well above those in most other developed countries around the world.

Market Update

• The NZ central bank left rates on hold at 1.75 percent and while it indicated higher interest rates were possible in the future it's not planning to move any time soon, saying monetary policy will remain accomodative for a "considerable period."
• Investment funds have had quiet start to the year, seeming to still be on holiday with returns relatively flat during January. Funds' New Zealand share investments rose (and are up 20% over the past year), although the New Zealand Dollar was also up 5% which took the gloss off gains on overseas shares.
• Despite the new US President providing an ongoing series of news fodder, generally economic confidence around the world is starting 2017 on a high note. This is an encouraging sign in the year ahead for company earnings, one of the key drivers of shareholder returns.
  

Jonathan Parsons M.Mgt B.A(hons) Dip Bus (fin.plng)

jonathan.parsons@sprattfinancial.co.nz

09 306 7259 - 027 201 3470

Smokers and Insurance: How much you could save by quitting.

Statistics estimate that 15% of adult New Zealanders smoke, or a total amount of around 550,000 people. These smokers in New Zealand have it tough in so many ways. Not only are they mired in an unhealthy and destructive habit, every year this habit takes more and more out of them financially. Since 2010, because of new tax laws passed in parliament, the price of cigarettes and tobacco has risen dramatically.

A pack of 20 cigarettes has risen from around $13 to between $22-27 in 2017 depending on the brand of choice. With 10% tax increases set in law at least until 2020, smokers can expect that they will soon be paying upwards of $30 per pack or $1.50 for each cigarette. A pack a day smoker will be out $200 per week, a cost likely higher than all their groceries for the week combined.

In 2017, each of these set their owner back over $1 a piece.

Unfortunately, that's not all a cigarette habit can cost. If you're a smoker and you have personal risk insurance in the form of life, trauma, TPD, income protection or health insurance, you're paying a lot more in premiums than non-smokers are. This is because as a smoker, you are more likely to develop serious health conditions and thus, you pose a much higher risk to the insurer. How much more will a smoker pay? In some cases it can be up to double the amount of a non smoker of the same age.

The good news is, that if a smoker manages to quit, their premiums can be revised and changed down to a non smokers level if the smoker manages to maintain it for a significant period of time. For instance, if you quit smoking 12 months ago and are paying smoker premiums on your insurance, you will be eligible to apply for changes and have your costs significantly reduced. A pack a day smoker who manages to quit could easily save between $12,000-$15,000 a year through not having to pay for smokes and the savings on their insurance. That is enough for a significant vacation, a brand new car or many many shopping sprees. Even those who only smoke a pack or two a week could save around $5000 a year by cutting it out.

With the cost of the habit now sure to increase further in the years to come, now could be the time to dial it back or endeavour to quit entirely. Your wallet would definitely thank you for it.

www.sprattfinancial.co.nz

                                     

Breaking News: Insurance/Investments/Home Loans

1. Insurance Council rejects criticism over Kaikoura Earthquake claims. - Radio NZ

The Insurance Council is defending the industry against claims that some commercial claims are taking too long in Kaikoura following the latest devastating earthquakes.

2. Wedding Insurance now available to Kiwis at home or abroad. - Stuff.co.nz

New Zealand's first specific insurance designed to cover wedding festivities has been launched, and it also covers Kiwis choosing to have their big day overseas.

3. Kaikoura Earthquakes the seventh most costly event covered by insurers in 2016. - Interest.co.nz

The total amount of damage caused by the quakes is estimated at $4.5 billion NZD, of which 60% is expected to be covered by some form of insurance.

4. Why rich Americans see NZ as a haven. - NZ Herald

A new wave of wealthy Americans sees NZ as an attractive option, isolated enough from the perceived and real turmoils of their home nation and offering a more positive environment and lifestyle. 

5. Auckland falls to world's fourth least livable city. - NZ Herald

Citing moderate pay and ever increasing cost of living and house prices, Auckland is now ranked behind only Hong Kong, Sydney and Vancouver among world cities.

6. New Zealand Home Loans Survey reveals household's most disastrous spending habits. - Stuff.co.nz

Particular habits of overspending are contributing to a major impact on households ability to service their home loan debt.

7. Double Interest rate blow to Kiwibank mortgage holders. - NZ Herald

Kiwiblank cites funding costs as the reason behind increasing mortgage rates twice already in the first month of 2017.

www.sprattfinancial.co.nz

Medical Insurance Offer: Free $150 OPSM Voucher.

Until the 31st January 2017, if you take out a new Southern Cross medical insurance policy (or add a family member to an existing policy) through Spratt Financial Services, you will receive a free $150 OPSM Voucher. Not only that, but you could be entitled to several more benefits as a Southern Cross member including:

• 10% healthy living discount on your premiums.
• An additional 2.5% discount for payments by direct debit.
• A special discount on travel insurance through Southern Cross.
• Free eye tests from OPSM for the duration of your time as a Southern Cross member.
• Southern Cross is a not for profit organisation and all policies are made with the benefit of members in mind.

This is a limited time offer so get in quick. You can contact us anytime about this offer at enquiry@sprattfinancial.co.nz or use our contact form to request a free quote with no obligation to proceed here.

The US Elections and Your Investments

We’ve all now come to grips with the result of the U.S. election. Given the polls just before election day, the outcome was a surprise, to say the least.  The result has been compared to Brexit, which was one that was similarly surprising.

Perhaps we are less sceptical. Living in the world of financial markets, we know that probability is only ever as the name suggests.  It represents something that is likely or probable to occur, and so is very different to the word certainty.

Markets quickly adjusted yesterday as reality set in. Overnight, S&P 500 futures markets were down. It has rebounded today though, and is up 1.4% at the time of writing.  All that means is that, ironically, investors don’t know what this means.  Will the American business community reign Trump in, or will he be allowed to follow through on his election campaign promises?  Trump won’t be able to pass law, but he will be able to put a block on securing trade deals (such as the TPPA), for example.  Many New Zealanders that are anti-TPPA would also be very anti-Trump, and yet he’s very likely to kill the deal that they didn’t like.  It shows how complicated this election really is.

From the perspective of your portfolio, it’s intriguing to look at the relationship between the US president and investment returns. Historically, markets have done better when a democrat is president rather than a republican (9.7% growth as compared to 6.7%). However, the same data shows the markets do best when the republicans control both the House of Representatives and the Senate.

Source: http://time.com/money/page/2016-presidential-election-clinton-trump-affect-finances/

After this election, the republicans hold the House, the Senate and the presidency.

But there is more to the data. When the US president has a negative approval rating the markets have done 4% better than when the country gives the president positive ratings.

In reality, the data indicates that the relationship between investment markets and the presidency is a fairly weak one. What drives markets are businesses that innovate, solve problems and continually provide better goods and services at lower prices. Businesses have been doing this for hundreds of years and will continue to do so for many more.

Someone almost universally regarded as being one of America’s worst presidents was Warren Harding, the 29^th US president (1921 – 1923). Amongst his many blunders, he appointed a number of corrupt officials.  One of his cabinet secretaries went to prison for corruption. [1]

How did he get elected? Author Malcolm Gladwell suggested in his book Blink that people believed Warren Harding would be a good president because he appeared stately and presidential.  It was a “blink” decision. [2]

Why do we bring this up? Only because between 1921 and 1923, the Dow Jones returned around 32%. [3]

“Conventional wisdom says a president’s economic policies matter greatly to Wall Street. But… investors since the Great Depression have managed to make money in war and peace and under successful and failed administrations.” ^[4]

Many of our clients are invested in portfolios built to last 20 to 30 years. Over that time frame, both good times and bad times are a given. That is the nature of capitalism which funds, what we can see in retrospect, are both worthwhile and worthless economic ventures. We believe history shows us that a globally diversified, low cost portfolio is a ship that can and will survive the storms of politics, because it is founded on the success of business. Presidents come and go, but business in aggregate has never gone out of business, and won’t in the future, whatever president-elect Trump does.

So we encourage you to relax, to tune in to the news as an interest, but know that your long term plans are based on something much more solid and stable than politics. 

[1] http://time.com/money/page/2016-presidential-election-clinton-trump-affect-finances/
[2] https://en.wikipedia.org/wiki/Teapot_Dome_scandal
[3] http://content.time.com/time/specials/packages/article/0,28804,1879648_1879646_1879696,00.html
[4]http://www.automationinformation.com/DJIA/dow_jones_closing_prices_1921_to_1930.htm

Spratt Financial Newsletter - October 2016

Check out our newest Spratt Financial Newsletter, including special events clauses in your insurance which may make changes to your insurance far easier and how to be debt free quicker.

Special Events Clauses - Making Insurance Changes Easier

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:

• Getting married or finalizing a divorce.
• Having a child (by birth or legal adoption).
• Taking out a new home loan or increasing an existing one.
• A significant salary increase of 10% or more.
• A spouse or partner passes away.
• Other significant financial of personal events.

If you want to take advantage of these clauses or see if you have one that you can take advantage of, you can drop us a line free here.

Follow us on Twitter.

Like us on Facebook.

Visit our official website.

The effect of Brexit on your investments.

In the wake of the historic referendum that resulted in Britain's decision to leave the European Union, there has been much financial and economic concern about what this may mean for investments and finances worldwide. Since the result was announced, the British Pound has fallen to 30 year lows, including a 7% fall against the New Zealand dollar.

Here in New Zealand, Kiwi investors are being urged not to panic. John Berry of Pathfinder said NZ investors shouldn't expect a great impact from the result largely because New Zealand's market is largely insulated against the fall that could continue in the United Kingdom and Europe. He went on to say though, that any global downturn that occurs could have an impact on confidence and equities that could permeate our marketplace.

Other advisers have said that if you are long term investor, this will eventually be seen as merely a momentary blip. Short term investors could suffer a degree of loss, but most experts expect that markets will rebuild. Nick Tuffley, ASB chief economist stated that though there is little danger of a significant long term loss, "people need to think about what they are doing and why - whether their objective has been changed by what has happened."

If you are concerned with the impact that Brexit could have on your investment or your finances, our professional investment team offer you free, no obligation advice or reviews at any time through our contact form here.