A good question and one that is often misunderstood when it comes to income protection.

It’s also been coming up in conversations more recently, suggesting there’s some job security sentiment developing.

In New Zealand there are five situations that impact your ability to earn an income.

As an insurance adviser it is interesting watching people's behaviour. Most people are put off talking to an insurance adviser because they might sell them something. I'll talk about that 'something' later.

As an insurance adviser I look at the big picture and sit across a number of disciplines. Insurance is the ambulance at the bottom of the cliff, providing financial support in time of need and loss. Those times of need and loss can be wide ranging. From your possessions, to something happening to you or your family, to something happening to your business or your employees.

One of the things that is often said, reported in the news, and generally complained about, are the increasing costs of medical insurance.

We've heard about Southern Cross policy holders up in arms because of the premium increases they have seen. To be fair all providers premiums increase, Southern Cross has the biggest pool of clients and the oldest pool of clients, so increases do hit hard in that particular group.

They are on a ROLL!

Come to Kawakawa this Sunday, February 7^th for the markets, local hospitality, and to welcome the newest electric vehicle fast charging station to be switched on in New Zealand.

Cake, test rides in electric cars and a ribbon cutting by mayor John Carter will be commencing from 10:00am.  This station is the continuation of a robust Electric Vehicle loop that will give entry level Electric Vehicles more access to the winterless North.

Something I get asked about from time to time.

From what I have seen and heard it's needed, as the treatment for your beloved pet is often more expensive than your own medical treatments.

I'm not going to recommend a particular provider, as these policies change from time to time and I'm not on a notification list for changes to keep this up to date. All pet insurance policies are sold directly to you or though vets, it's not something we can provide or sell presently.

Mobile phones, those funny devices that used to be the domain of yuppies and annoyed those looking for a quiet dinner out, now we can’t get by in life with out one.

The expectation is you’re now available 24/7 and your smart phone will substitute all manner of thinking requirements.

We’ve heard plenty about mobile phones and driving, yet people still hold their phone while driving. No, holding it in your hand on speaker phone is not hands free ;) ahh, it’s still in your hand!

Though, they are causing all manner of distractions, and my couple of weeks driving an electric vehicle highlighted this, as I nearly mowed down at least 6 or 7 ambling pedestrians.

In our opinion in all situations Agreed Value is. Yes, there are some clever tricks you can play with tax and claims on indemnity or loss of earnings, but the vast majority of claims just don't work out like that at claim time.

In my experience when it comes to Income Protection claims, indemnity claims cause the most headaches. In my time as a manager looking after advisers and as an adviser myself, the only problematic claims I have had were indemnity claims. Agreed Value never had the drama and hassle.

A really good question. Let's tackle over insurance first

With over insurance, in its simplest form, if the risk is not realised, you've paid more for the transfer of risk than you had too. What I'm meaning is if you don't die, don't have a trauma, don't have a loss of income or property, then the risk being covered hasn't been realised.

For example, if you have a $500,000 mortgage and have a $1,000,000 life policy and you make it to retirement having paid off the mortgage. Then you have likely paid double what you needed to, to transfer the risk. Assuming your need was limited to just the mortgage over that time.

There's an undercurrent philosophical debate going on just behind the screen. At present, you're unaware of it, unless you're already in the health system as a patient or a doctor. This undercurrent defines what treatment is available to you and how much the government is prepared to spend their budget on you.

It might sound crass to put a number on the value of a life, unfortunately, in the world we live in, money talks, you know the rest.

A question that is often asked, ‘So will the insurance company actually pay?’ Yes they do, they pay valid claims.

This is the issue, defining valid claims. Valid claims are claims that are both covered by the policy and the policyholders have been complete in their disclosure.

For example a cardiac event, similar to a heart attack, but isn’t severe enough to qualify as a heart attack under the definition of a heart attack on the trauma policy wording. This isn’t a valid claim, as it didn’t meet the definition of the policy document.

Also, for leukaemia too, if the commentary in the media is to be believed. This new medicine on the market, approved for use in New Zealand, is currently not funded. The indications from the commentary, this medicine is one of the only options for melanoma patients to be successfully treated. 

I am not clear on the survival rates, but the results to date appear to be miraculous when standard chemotherapy has been less than useful in treating melanoma to date according to the many articles on the subject. The problem is the cost, somewhere in the region of $300,000 over two years to access this new treatment.

Insurance and shades of grey, no not 50 shades but certainly something most people don't like to hear when it comes to insurance. Most people want to hear black and white. My experience is every claim has shades of grey and they are rarely cut and dried. There is always something that pops up; most are foreseeable, some not so much.

Where I am going with this is the differing effects different policy wordings have at claim time.

For example there are a few insurance company trauma policies where a good angina attack could almost qualify for a trauma claim and then there are others where you have to be half dead and not working, probably not working in a manual job ever again, before you could claim.

The New Zealand Herald kicked off their five-part series on cancer today. Martin Johnson investigates the controversies in cancer testing and treatment and the moving stories of people diagnosed with cancer.

I've mentioned many times, here in my blog and many times to clients and frankly anyone that will listen, our public health system while good in many areas, often falls short in many areas too.

Managing medical expenses is a large area of risk management. It is also an area where people often don't spend a lot of time on managing. Public health is an area where the government has the largest spend, ($15 Billion for 2015) which should be an indicator you need to consider your options here as well. 

Medical Insurance Treatment Myths and Realities

My share of my blog post on Movember got a really good reply with some well thought out points that I come across with clients every day. Some are well founded and understood, others things have changed as has the approach. I felt it was worth a blog post by itself.

Susan’s original post:

Good on you Jon-Paul, admirable cause, but it is my view that Health insurance company don't do Health prevention, you have to pay for this type of health service even if you have a mastectomy your health insurance won't pay for a re-build for want a better word, apparently its plastic surgery and its not covered to have you looking normal after going through harrowing surgery and treatment...

Here we go again, more medical insurance updates and changes

We have:

• A company offering $500,000 cover per person per year
• Addition of non-Pharmac cover taking us to 6 providers
• Another sorting it's congenital conditions cover and bringing it in line with the rest of the market
• The addition of guaranteed wordings, making it three that do.
• The addition of home-based non-Pharmac coverage that is new across the board.
• Another with had a pre-existing conditions cover offer, including the usual big-ticket conditions normally once you have them you can never get them covered. Heart, hips and cancer.
• The Same provider was also covering congenital conditions, except what they class as chronic conditions, which is a short list, but nasty conditions. (November - December 2015)