Insurance News for Real People

Run your own business and have out of control ACC levy bills?

Run your own business and have out of control ACC levy bills?

You are not alone; most business people comment that ACC levy invoices do not make much sense.

Part of the reason for this is the way ACC levies are calculated, some in advance and some in arrears. Often this is not in a sequential order so you might be paying this year's and paying a wash up on a year before last. This is usually because of the way you have reported your accounts; this is also across two or more levy invoices. Added to this the various components to cover the past and future risks ACC have, credits that happen if you have overpaid a portion calculated on a prior estimate.

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Insurance, necessary evil right or essential financial safety net?

Insurance, necessary evil right or essential financial safety net?

 

Insurance is one of those things people do not like paying for and often bundle it in with power, interest, rates, tax and bank fees. Something to address when we really have to until then, we will ignore it and just pay the bill.

Insurance is about covering a loss, well a potential loss. Because you need to take insurance before you have the loss in order for it to work. People comment ‘but it should cover X, because I know about X and that is what I want cover for’. If you know about X then the insurance company is unlikely to bet on X because it is likely to be a sure loss for them.

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I have a policy, I am covered, right?

I have a policy, I am covered, right?

 

In general terms yes. There is a but in there though, and it is a big one.

When you applied for your policy, did you; tell the truth, the whole truth and nothing but the truth? If you did, you are probably ok and have nothing to worry about, if you are unsure read on.

In English law, and carried through to New Zealand law, is the basic principal of good faith and truth when talking about contracts.

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Inflation and medical inflation what is the difference

Inflation and medical inflation what is the difference

This is a question often asked by clients, especially those with medical insurance.

Inflation loosely termed is the change in buying power $1 has today vs. a point in time in the past. The Reserve Bank is under instruction from the government to keep this in a band between 1% and 3% per annum.

The best lever for the Reserve Bank to use to manage this is the interest rate, which is why it gets a lot of focus.

Inflation rates help drive the decisions the Reserve Bank makes on interest rates. (In a very simplified way)

What does this really mean?

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What's is BMI and how does it apply to my insurance?

What's is BMI and how does it apply to my insurance?

 

Let us start with what is BMI?

BMI stands for Body Mass Index. It is a medical tool used by the medical profession to assess someone's approximate body fat.

BMI is a function of a person's height and weight. Doctors often use this in conjunction with a person’s waist measurement to get a more accurate understanding of how healthy a person's weight is.

I am guessing you would not be too happy to have your financial adviser measure you for your insurance application, so insurance companies only use height and weight.

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What if you are disabled through a non-accidental event or medical disability?

What if you are disabled through a non-accidental event or medical disability?

Good question as most people struggle with an example of a disability that is not a trauma or an accident. A degenerative back condition is one, no event as such so not ACC. Though there is another, I have seen which was more surprising.

Who would have thought a change in regular management medication would result in not being able to work? Well it can happen, not only once but a recent clients father has had a similar experience too and the similarities are quite surprising. Let’s just call them both Peter.

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What really happens with a disability?

What really happens with a disability?

Let us say you are a builder and you take a tumble off the roof on a job and break your pelvis. (There have been one or two of these situations, it does happen) You are carted away in an ambulance to emergency and they patch you up.

You are now looking at 12-13 weeks for recovery. You will need assistance for things you never thought you would, nor will you like it much.

After 7 days, ACC will be paying to replace 80% of you provable tax assessable income, which is also tax assessable, and you are still lying in a hospital bed. At this stage of the game, you are starting to do your head in and depression is a real risk for you.

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How do you insure your new baby in New Zealand?

How do you insure your new baby in New Zealand?

There are a number of ways to insure babies and children. Let us start at the beginning, pregnancy and conception.

In New Zealand currently, assistance with conception is limited to what is publicly funded. Private medical insurance does not cover conception issues; it can cover some pregnancy issues though.

What can you have covered once you are pregnant?

The public system is well equipped for dealing with pregnancy. It is unlikely you will need additional assistance that requires funding if you have a normal pregnancy.

If you do have complications with your pregnancy, then there are provisions under most medical insurance policies specialists and tests benefits to assist with private specialist costs. What you do need to consider are the finer points of the policy, this is where your adviser comes in.

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Managing interest rate pressures on your mortgage or home loan

Managing interest rate pressures on your mortgage or home loan

 

Ok the OCR has moved for the first time in a long time and interest rates are all rising. Is this a problem? It depends on your perspective.

If you are a homeowner then yes it will have a direct impact, your mortgage payments will rise. Again, is this a problem?

If you bought your home some time ago when rates were higher and you have not borrowed more, it is probably not a problem and you have been enjoying cheaper money than you anticipated. Additionally you have possibly paid back more principal than you normally would have and you are now in a better position.

For the majority this will not be the case, certainly in Auckland if you have bought your first home or upgraded in the last 3-4 years, it will have been because the lower interest rates have assisted you to do this. The low interest rates probably had some impact on the increased house prices too.

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Own you own home, check! Got it insured correctly, probably not

Own you own home, check! Got it insured correctly, probably not

 

The newspaper is full of timely reminders and this article is one of them. We are getting to 12 months in on the new home insurance approach of insuring for the rebuild value. It would appear that the vast majority are in for a shock when they have a loss to the house and they hear what it's going to cost to rebuild.

From the major insurers in the country the news isn't pretty. 60-75% of people took the rebuild value number on their insurance at the last renewal and just ran with it. Of the other 25-40% of people who did look at it and change it, 90% increased their cover.

The claims comment in the article would also suggest those who increased their coverage are the ones who probably have it right.

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Breast cancer and breast reconstruction after mastectomy

Breast cancer and breast reconstruction after mastectomy

This article was current when posted on the 13th of March 2014. Since then the insurer discussed in the following news article has made positive changes to address the issue raised. This blog post was updated 10 July 2014, updates to the original article posting are noted in ()

Topical article this week, 13th March 2014, on breast reconstruction after breast cancer surgery, one insurer got a pasting, but not all insurers are alike. Also not all medical insurance policies with the same provider are alike, as also demonstrated in the article.

The article, which you can read here, only mentioned 4 of the 10 providers of medical insurance benefits in the New Zealand market, which does the market a dis-service as it does provide valuable benefits to policy holders in need.

What do you need to know

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Bought insurance from your bank?

Bought insurance from your bank?

Ok so we have all had ‘The would you like fries with that approach’. You are standing at the teller at the bank doing your banking and they start asking you a bunch of questions. You are here now; we can do other things for you, nice and easy. Do you have life insurance; can we help you with your mortgage? Can we invest your money or look after your Kiwisaver? Or some other variation on this.

My question is why would you take advice for your insurance or investments standing at a teller at the bank? Would you take advice for chest pains from your local cafe owner? My point is they are chalk and cheese, banking and insurance.

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Applying for cover, the application form

Applying for cover, the application form

 From time to time, I hear key staff from insurance companies speak at training and development sessions I attend. A recent one I heard from a key person in charge of operations. This person oversees both the underwriting (your application) and claims (where you get paid)


What was interesting to hear was the statement ‘Where there is adviser guidance with the application; the client generally has a better outcome at claim.’

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Medical Insurance changes, is it time to look at your coverage?

Medical Insurance changes, is it time to look at your coverage?

Two medical insurers have changed or added to their products this month. NIB the insurer who took over Tower Medical last year and the largest medical insurer in the New Zealand market, Southern Cross.

So what have they done?

If you are familiar with Tower Medical they had Premier Health and Easy Health in their product range. NIB have added Basic, Mid, Ultimate and Ultimate Max policy options to their mix. Making it both more flexible in building the medical insurance products for you but also making it more complex to understand the nuances of the different policies, which is where we as advisers come in.

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Time to hunt for a flat, get some insurance too!

Time to hunt for a flat, get some insurance too!

 

A timely reminder in the Herald today, especially for those students about to start the year and are flat hunting.

If you're renting you need to have some level of contents cover. Ideally enough to cover the replacement of your possessions but more importantly cover for damage you may be liable for.

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