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Life Cover and Cover for Life
Nick O'Neill-Hay • Sep 04, 2019
Life Insurance Cover demystified!
Life insurance is one of those topics which can seem pretty daunting! There are so many different types of cover out there and it can feel like a never ending list of things to consider. That's why it’s always a good idea to talk to an adviser for help understanding your options - but more about that later! For now, here is a breakdown of what you need to know.
Most people use Life Insurance to:
- Ensure there are funds to cover funeral expenses.
- Pay a lump sum on your death, protecting those people who depend on you.
- Clear debt such as credit card, personal loans, mortgage.
- Pay for childcare support if the person who passed away was the primary caregiver.
- Provide future financial support for their children.
The key benefits of Life cover:
Terminal illness support
Pays a lump sum if you’re given less than 12 months to survive. You can use the money for your immediate care and help to plan a secure future for your family without having to tap into your life cover.
Funeral advancement
An advance payment from your Life Cover can be made when a life insurance claim is accepted. This pays for immediate expenses such as a funeral.
Financial planning
This will pay for your family to receive professional advice from an approved financial planner. This helps your family decide the best way to use the money they will receive.
Grief support
This will pay to help with the cost of professional grief support during the grieving process.
So where can Life Cover get complicated?
Keeping your policy up to date!
Things in your life change, and your insurance needs might change too. Milestones like buying a house or having a baby are an exciting time for anyone, but it’s also a good reason to revisit your policy and make sure you have a plan for that debt or for your family if something should happen to you.
As with any insurance, when you review your cover you might decide that another insurer could offer you a better deal. But before you cancel your policies and make the switch, it’s important to seek advice.
Moving to a new insurer means you will be underwritten again, and if you have any new medical issues or conditions you might get less cover or higher premiums by switching. An adviser will be able to explain how cancelling your policy might affect you in the future and help you decide what will suit your current and future needs.
You don’t have to choose just one type of cover.
Everyone’s circumstances are different, which means we may all need something different from their insurance policy. That’s why when you look at getting life insurance, you won’t have to choose just one type of cover.
It might make sense for you to package together different types of personal cover – like Life, Trauma or Income Protection – under one policy. This means you have a safety net in place for yourself for different things that might come during your life, and not just for your family if you pass away.
Buying online and through an adviser are not always the same thing
In this day and age most of us prefer to shop online! It's easier, more convenient and often saves time. However it’s important to know that when you’re looking at life insurance policies you can buy online compared to those you buy through an adviser you are not always comparing apples with apples.
Insurance advisers will be able to offer you a greater range of policies, more comprehensive cover or a more cost effective structure of covers. Once you have your cover in place your broker can help and advise you with any claims help should you need it.
But one of the big differences is the degree of underwriting that you will face. Most adviser-sold policies include comprehensive lifestyle and medical underwriting. This is important to ensure if you need to claim you've made full disclosure to the insurer. Unfortunately some insurances sold online do not ensure full disclosure is made. This is why working through this with your Adviser throughout the process is so important.
There are options when it comes to premiums
If you’re worried about the cost going up as you get older, there are different ways you can structure your premiums. You can choose from stepped premiums, which start out a lower price and increase each year based on your age, or level premiums, which begin higher but stay locked at that price each year without increasing.
There are benefits to both, and you can even have a combination of the two if that’s what would suit you best.
Most importantly, You don’t have to figure it out on your own!
Life insurance can be complex, but there is always help available. Ask Consulting will help you focus on what's important to you, guiding you through everything from products to claims. We offer you personalised advice to make sure you’re getting the best policy to suit you.
At Ask we focus on what you need and help you understand what your insurance will do for you.
If you need help with arranging insurance cover in Christchurch then give us a call or get in touch.
Just Ask
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Wellingtonians, it was found, walk more and take more trips by public transport than other New Zealanders.
The ‘Fittest City’ study has been released as part of the New Zealand launch of the world’s largest health and wellbeing programme, AIA Vitality.
“New Zealand cities vary widely, not only in geography, but also in urban planning and transport decision-making. There are consequences for population health, greenhouse gas emissions and local air pollution,” says Professor Alistair Woodward.
Levels of walking, cycling and public transport were used to estimate the effects on health and the environment in the six largest New Zealand cities.
Wellingtonians, it was found, walk more and take more trips by public transport than other New Zealanders.
The ‘Fittest City’ study has been released as part of the New Zealand launch of the world’s largest health and wellbeing programme, AIA Vitality.
“New Zealand cities vary widely, not only in geography, but also in urban planning and transport decision-making. There are consequences for population health, greenhouse gas emissions and local air pollution,” says Professor Alistair Woodward.
Levels of walking, cycling and public transport were used to estimate the effects on health and the environment in the six largest New Zealand cities.
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With that in mind we have put together a list of the common terms you will find in your insurance policy documents that you might want to understand a little better.
With that in mind we have put together a list of the common terms you will find in your insurance policy documents that you might want to understand a little better.
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An insurance broker is a professional adviser, an expert in understanding insurance and risk management. Our job is to find you the right insurance with the right Insurer and help you with any claims. But responsibility for the risk associated with your policy sits with the insurer.
In practice this means that while we work to pair you with the Insurer who’s right for you and work with you if you have to claim, we’re not the ones who pay out when a claim is made.
What are your goals? Paying off your mortgage, savings for retirement, health, a beach house?
Think about it for a moment – if your health failed, how would that affect your financial future, or that of your family. Suddenly all of your dreams and plans for the future would need to be seriously revised or may no longer be possible.
The good news is that with the right life insurance you can still protect what you value most – lifestyle, family, health, even the home you live in, no matter what.
