LifeDirect Blog

The value of income protection insurance

Our friends over at Asteron Life Insurance have recently released a bunch of videos starring New Zealand celebrity builder, John 'Cocksy' Cocks, who talks about his battle with cancer and how insurance has given him the freedom to chase his dreams and enjoy spending time with his loved ones.


Death or terminal illness is not a typical dinner time conversation, and it’s not something you’d ever think could happen to you. But most of us will know someone who is battling an illness such as cancer, and know how debilitating this can be on their ability to work and earn an income, as well as the impact it can have on their loved ones. Cocksy talks about how insurance has meant that he can finally focus on building his dream bach and leaving a legacy for his family, none of which would have been possible without financial support provided by his insurance cover.

A terminal illness can change your life in a heartbeat. Cocksy mentioned that his operation had cut him to the core and there was no way that he could keep working like he had before. So what would happen if your ability to work was also put at risk? What would happen to those who depend on you for an income?

Insurance can help lighten the burden on both yourself, and your loved ones. One type of insurance that can provide much needed relief is income protection insurance. The reason to have income protection is simple - your ability to earn is probably the biggest asset you have. Your ability to earn also protects your other assets (think about what what would happen to your home if you suddenly couldn't work).

If you didn’t know, you can also apply for income protection if you’re self employed. Being self employed, you are less likely to have a safety net as opposed to employees who have access to sick leave and annual leave. If you’re self employed, you’ll be asked if you work a certain amount of hours per week in order to be eligible for cover. This is normal for insurers to ask if you’re self employed or employed.

You may be wondering why you should bother getting income protection if you already pay ACC levies? The rundown on this is that ACC will cover your income up to a certain extent, but only if you have an accident that disables you or hinders your ability to work. Unfortunately, these levies will not cover you for terminal illness. If you’re self employed and would like to get some further information on what you’re covered for with ACC, check here.

If you’d like to have a look at income protection insurance and the benefits it can guarantee for you and your loved ones, head on over to the LifeDirect income protection page and fill out a quote. We’ll do the hard work from there and compare a range of New Zealand’s leading insurers and their policies, prices, financial strength ratings and customer service ratings to make the decision making process easy. Alternatively, if you’d like to talk to someone, you can call us on 0800 800 400 or talk to us in real time with our website LiveChat.

 

Understanding Insurance in New Zealand

Sovereign CEO, Nick Stanhope has recently addressed the issues New Zealanders face in relation to insurance, and why we are so reluctant to cover ourselves and our families in his Sovblog.

At LifeDirect, we are continuously looking at ways to further simplify and improve the insurance process and the way we communicate to our customers through the comparison of New Zealand's leading insurers. We understand that the most important aspects of the decision making process are based around premium, policy features, financial strength, and customer service.

The biggest question for us is why are New Zealanders so reluctant to cover themselves and their families?

Most of us will likely have insurance to cover items such as cars, houses and contents out of a need to protect our belongings. However, as Nick has pointed out, according to OECD calculations, New Zealand is amongst the most underinsured countries in the world”.

So why is this? For starters, insurance plays such a massive role in societal contribution, reducing the burden on hospital waiting lists and welfare services. “Last year Sovereign paid out more than $350 million in claims, including more than $11.2 million in claims for mental health related conditions”, this is a massive role to play in the community.

Furthermore, as Nick identifies, “the reality is that insurance can protect your greatest asset, the ability to earn, if you are unable to work due to illness or injury. It also gives you access to the latest proven medical technology quickly and makes sure your loved ones are cared for after you’re gone.”

There are a couple of key reasons as to why more people don’t have insurance. For starters, many people don’t fully understand how insurance works or why they need it. Insurance products can be complex – at LifeDirect we recognise this and can help you sort and choose the best policies based on a few quick questions on what sort of cover you want, whether it be life, health, income protection, mortgage protection or funeral insurance. We will also provide you information based on policy ratings, as well as customer service ratings from the different insurers to ease the decision making process.

Cost can also be a barrier when considering insurance, but we’ll do the hard work for you and compare a range of different policy prices and identify the most affordable option specifically for you.

A nice touch in Nick's blog is where he highlighted a recent trip of his where he visited several customers who had made a claim. He has said that “they all told me how important it’s been having their finances taken care of while they undergo treatment and recover from illness and injury. We come into our customer’s lives during the most stressful and traumatic events, and it makes me incredibly proud to hear about the difference we’ve made to them and their families.

  

So if you’d like peace of mind knowing that your loved ones are taken care of no matter what, give it a crack for yourself - just head to our homepage, select the type of cover you’re looking for, and enter your details in the quotebox. Alternatively, call one of our amazing sales consultants on 0800 800 400!


Insuring kids - a good idea or not?

By Conor   //  Tags:   //   Comments (0)

At LifeDirect we often have enquiries from people who want to add children to their health insurance plan - or even get cover for the kids on their own.

There are two main reasons to get health insurance for children. The first reason is the same as the reason adults get cover - to avoid waiting lists. Even though kids are usually well taken care of in the public health system, waits are certainly possible (with common issues like ear, nose and throat often requiring a wait). Parents who want to ensure that treatment is as quick as possible can add their children to a health insurance plan - meaning that waits are unlikely.

The second reason is to safeguard the child's "future insurability". When a person takes out a health insurance plan the insurer will assess their application, and typically exclude any "pre-existing" condition - so they won't cover any issue that already exists. For this reason, getting cover as early as possible is important, as it minimises the number of exclusions a health plan will have. So enrolling kids in a health insurance policy early on can guarantee that they have a policy free of exclusions - which is very valuable and a great thing to have as they enter adulthood.

How does "level" life insurance work?

By Conor   //  Tags:   //   Comments (0)

When you start a life insurance plan you can choose between two types of premium: "rate for age" (also called "stepped") or "level". The difference is simple. Rate for age premiums increase every year with age, while level premiums don't increase at all (unless your cover level increases). Level premiums can usually be level until age 65 or 80 - after this they change to rate for age. We show rate for age on the LifeDirect site, and it's by far the most commonly chosen option.

The choice between the two comes down to the length of time a person wants to keep their cover. Rate for age is much cheaper at the beginning (around half the cost of level cover), but because it increases every year, in the very long term, for example if a person wanted cover through their 70's or beyond, it becomes very expensive. Level cover starts out much more expensive (usually double the cost of rate for age), but in the very long term can cost less.

If you're interested in a quote for level cover, just let our team know - we can provide costs and talk you through your options.

Disability and attitudes to life insurance

By Conor   //  Tags:   //   Comments (0)

AMP, one of the insurers on LifeDirect, recently released some interesting statistics on disability and New Zealanders' attitudes to life insurance.