Why do I need income protection insurance? Doesn’t ACC (Accident Compensation Corporation) cover me that for free?
ACC does not normally provide income benefits for disability due to health or sickness related conditions
ACC covers Accidents, and will pay for most of your surgical bills in addition to providing 80% of your income up to approximately $9000 per month. So should your income be far greater than this or you are disabled due to a health or sickness related conditions then you may be surprised to find out that your benefits are inadequate or worse still, that you may not receive any ACC income benefit. For more information on what ACC does cover click here.
WHAT DO VARIOUS TYPES OF INSURANCE PROVIDE FOR?
Health Insurance: Health Insurance is a form of cover which pays for medical costs, and makes it easier for you to access private health services outside of the public system. Although it may seem easy to adopt a standpoint of ‘it won’t happen to me’ as it relates to your health, it is an unfortunate statistical fact that you will require hospitalisation, surgery or medical procedures at some point in your life, in many cases more than once. Within the current medical system, the only way to ensure that you and your family will receive the treatment you need promptly and without huge costs is by taking out health insurance. We recommend some form of health insurance as a necessity to everyone. If cost is a factor, there are a number of options that are less expensive that we can discuss with you anytime.
Life Insurance: Life Insurance is insurance that pays an agreed upon lump sum to the people you choose if you passing away. If you are the breadwinner of your family, or you want to make sure your loved ones are supported in the event of your passing, some form of life insurance is a very good idea. Unless you have an extremely significant amount of savings to cover all of your debt and provide for your dependents as long as they will require, we believe that you should always have a life insurance policy in place. Life insurance, depending on age and physical health, is generally inexpensive and with our help, you could have even better deals, making a life insurance policy extremely useful without being a burden on your finances.
Income Protection and Disability Insurance: Income Protection is designed to pay you an amount reflective of your monthly income if you are rendered unable to work through illness or injury. We can sometimes operate under assumptions that severe illness will result in recovery or in a relatively quick passing away. Unfortunately, that is most often not the case. The biggest proportion of cases of serious illness (heart attack, strokes, cancer etc) in New Zealand result in a protracted period of physical disablement, during which time you will be unable to work and maintain the income necessary to cover your expenses - which will not be on hold until you get better! This is why income protection can be a good option if your family depends on your income to maintain their way of life. With the right cover, you can have the peace of mind that your income will be maintained in the event that accident or illness strikes.
Trauma/Critical Illness Insurance: Trauma Insurance is a form of cover which pays out a full or partial lump sum (which is agreed upon when taking out the policy) upon diagnosis of a serious health condition. This is different from income protection in that you are paid the full amount on your policy immediately when a diagnosis is confirmed (or a partial payment for numerous less serious conditions or procedures). This can allow you more flexibility on paying debt, providing capital for your business or supporting your family. Different people have different needs and depending on your situation, a trauma policy could be the best bet. We advise that if you are unsure, contact our professional team. We specialise in looking at your unique financial situation and determining whether your situation would best be suited to trauma insurance, income protection or a combination of both.
Key Person Insurance: If you run a business and your business prosperity relies on several key employees or directors, key person insurance is a very good idea. It will provide compensation to your business for their loss if they are disabled through illness or injury and support your business financially until an adequate replacement is found and the business is back on its feet. In some instances, proper key person insurance can be the difference between a business surviving or having to shut down.
Professional Indemnity Insurance: Indemnity Insurance is a way that you, your business and your employees can be protected against the consequences of wrongdoing, misconduct or negligence. Indemnity Insurance is extremely highly recommended for large or small businesses that provide services or consulting. If a claim or lawsuit is brought against you, indemnity insurance can cover your legal costs and even compensate for any awards made against you. There are also specially designed indemnity insurance packages for Doctors, barristers, solicitors, IT professionals, directors, trustees and charitable trusts.
I CAN'T AFFORD EVERY TYPE OF INSURANCE - WHICH ONES ARE MOST IMPORTANT?
For most people, it is simply unfeasible financially to have every possible form of insurance available. As such, it becomes a question of discerning which ones are most important for you to have. The answer to this will differ based on your personal situation and our team can discuss this with you more fully at any time if you wish. However, in most circumstances, we recommend at least a basic combination of health insurance (to insure that any medical procedures you need are covered) and life insurance (to provide for the people close to you if something should happen to you). If you have room for more in your personal budget, trauma insurance and/or income protection can provide you with good peace of mind if you were to suffer a protracted illness that renders you unable to earn a living.
Keep in mind that many insurers that we deal with offer additional discounts for bundled insurance policies.
WHAT SORT OF INSURANCE CAN YOU OFFER?
Alpha 1 Insurance Brokers can offer you the best, most comprehensive service in all types of risk insurance for both individuals and groups or businesses/corporations no matter what the size. These include:
Life Insurance
Medical/Health Insurance and Group Medical Insurance for Businesses.
Trauma Insurance
Income Protection and Redundancy Cover
Mortgage Protection Insurance
Key Person Insurance Cover
Total Permanent Disablement Insurance
Our insurance service goes beyond securing you the best cover at the lowest prices. We also provide full claims management, regular reviews to make sure you are always getting the best deal and a professional ongoing relationship and helping hand to assist whenever you may want to ask questions or make any changes to your policy.
HEALTH INSURANCE: WHICH TYPE OF HEALTH COVER IS BEST?
The primary benefits of having health or medical insurance are guaranteed protection from the risk of having to pay for your own treatment, as well as obtaining the best possible care with the least amount of delay or stress. In general, for most cases, a hospital and surgical combined with a tests and specialist policy will provide you with a basic and effective level of cover. We can also provide more specific insurance plans covering optical and dental expenses, and also routine GP visits and checkups. It is also a great idea to include any children you have on your health insurance as soon as possible, so that any pre-existing conditions they may develop will always be covered later on in life.
HEALTH INSURANCE: ARE THERE ALTERNATIVES TO HEALTH INSURANCE?
Yes self insuring. Some people actually take this option. You could save the money you would normally pay into a health insurance policy for possible future use, however the risk is the levels of medical inflation grow faster than you can save it . Also you may have a major condition in the first few years that your savings might not be enough to pay for. Obviously there is a chance that you could go through your entire life without ever making a claim (which would be a good thing) but there's also the possibility that you need to make several significant claims. According to the FSC NZ a record $1.8 billion was paid out in health insurance claims between July 1st 2022 and July 1st 2023 and this speaks to the importance health insurance has for many NZ families.
HEALTH INSURANCE: WHAT IS AN EXCESS AND SHOULD I ADD ONE?
Having an excess on your policy means that you will pay a part of the cost of your treatment and the insurer will pay the rest. For instance, a $500 excess means that if you required a procedure that cost $5,000, you will pay $500 and the insurer will pay $4,500. Adding an excess to your policy can have practical benefits, as you will get a discount on the policy's cost for doing so. This saving, over time, can add up to a significant total over the course of several years. Furthermore, it is an unfortunate fact that premiums will continue to increase over time. Adding an excess is one of the options we can provide you in order to mitigate these increases, keeping your insurance costs manageable and saving you money.
TRAUMA INSURANCE: WHICH MEDICAL CONDITIONS WILL ALLOW ME TO CLAIM?
In our experience, many New Zealanders who have trauma insurance could make a substantial claim which could help their finances tremendously and are unaware that they qualify. Your trauma insurance policy will tell you exactly what claim you are entitled to and which conditions will make you eligible. For the most specific list of these conditions, please consult your policy wordings. However, a general list of usual conditions could include:
Cancer (including Malignant Tumors ), angioplasty, aortic surgery, cardiomyopathy, coronary artery bypass surgery, heart attacks, cardiac arrest, Alzheimer's disease, coma, dementia, encephalitis, major head trauma, meningitis, motor neurone disease, multiple sclerosis, Muscular dystrophy, stroke, paralysis and loss of functionality, loss of hearing, loss of sight, loss of speech, loss of use of limbs, advanced diabetes, liver failure, lung disease, renal failure, HIV, major burns, major transplant surgery.
If you're unsure what these conditions entail or if you qualify, get in touch and we'll be happy to help.
WHAT IF I NEED TO MAKE A CLAIM?
Making claims can be extremely stressful and add a burden to you during already hard times. That's why our insurance service to you offers free claims management to take the stress out of your hands and make sure you get the claims you need quickly, easily and efficiently.
HOW IMPORTANT IS MY CURRENT HEALTH?
The better health you're in when taking out your insurance, the better of you are. If you make the effort to stay in good shape, you could be rewarded with lower premiums and fewer conditions and exclusions (things that the insurance policy will not pay out for). For instance, the cost of risk insurance policies are cheaper for non-smokers and those with fewer pre-existing conditions. The good news is that if you have an existing policy and your health improves or you quit smoking, your rates can be renegotiated and brought down. As well as for your general wellbeing, a healthy lifestyle will definitely pay off when it comes to insurance.
CAN YOU EXPLAIN INSURANCE JARGON/TERMINOLOGY TO ME?
Sometimes the terms surrounding insurance can be difficult to understand for newcomers. We will take the time to help you understand these terms at your pace.
WILL MY INSURANCE PREMIUMS INCREASE OVER TIME?
Chances are yes, the vast majority of policies sold in NZ are rate for age and as such increase over time.
Reasons for this are:
Increased risk to the insurer as we age
New medical technology (more costly to provide treatment)
A population which is ageing (with higher average claims amounts)
Rising CPI and medical inflation (increasing consultation, treatment and equipment costs).
I'M APPLYING FOR INSURANCE - DO I NEED TO REMEMBER DETAILS OF MY MEDICAL HISTORY?
Yes, it is necessary that you can recall as much as you can of your medical history. The most important thing when completing an application for insurance is to disclose as much as possible of any past medical treatment or consultations. Failure to do so could impact acceptance or subsequently claims.