Stop, look, listen before making crucial decisions
A recent Financial Services Council report sheds light on the ‘advice gap’ and asks if New Zealand has its priorities right when it comes to insurance.
With the rising cost of living, New Zealanders are understandably looking for ways to lower their monthly expenses and, as a recent FSC Money & You report shows, this has led to many making drastic changes to their insurance policies.
The report surveyed over 2000 Kiwis about their insurance.
It found that, while 98% of homeowners insured their property and 95% of car owners held vehicle insurance, four out of five respondents did not have any policies in place to protect their income if they fall ill or become disabled.
This is understandable at a time when the price of a simple block of butter has skyrocketed. But it does point to an imbalance when it comes to the value placed on belongings when compared to livelihood.
The report explores this situation in greater depth, highlighting the disconnect with how people get their information about insurance when compared with other financial products.
While 33% of survey respondents consulted mortgage advisers, only 24% discussed life insurance, and 18% checked with experts on health cover. 67% stated they ‘somewhat understand’ the terms and conditions of policies, while most only skim key aspects.
Making big decisions based on partial information is clearly an issue.
“Those with health insurance recognise its value, including access to care that may not be readily available through the public system, avoiding out-of-pocket expenses and receiving faster treatment for nonurgent medical conditions.”
MONEY & YOU Financial Services Council NZ
While it may seem like a ‘nice-to-have’, medical and income protection insurance doesn’t just offer peace of mind – it can be the difference between ‘continuing as usual’ and a mortgagee sale. In some cases, with the ability to tap into specialised expert care, it can be a matter of life and death.
So, how do you ascertain if you have the right level of insurance?
Achieving the balance of coverage and cost-effective life insurance requires expert insight and understanding – which is where a good advisor can make a big difference. Beyond dotting the ‘i’s and crossing the ‘t’s in terms of policy paperwork, advisors can take a big picture view of the situation and finances and determine the safest, most affordable road for their clients.
If you’re considering a change, first:
- Stop and take your time deciding what to do. Rather than taking a risk, you may find a few nips and tucks to your policies are all that is needed to keep your cover in place.
- Look around at case studies and consider the cold hard facts. Our website has several stories of policy holders whose lives were made much easier in times of turmoil due to their health or disability insurance.
- Listen to the experts. Give us a call. We may be able to help you find a way through this time without foregoing cover altogether.
Perhaps it’s a Kiwi thing, but some New Zealanders prefer to keep their insurance policies private, foregoing professional advice. However, with this approach there’s always the risk that vital information can be missed. It’s wise to reach out and consider all options before making any decisions.
Insurance should be sustainable and affordable. If your expenses have you considering policy changes, we’d suggest sitting down with one of our advisers for a no-obligation assessment and straightforward discussion.
