The six biggest life insurance mistakes Kiwis make – and the value of a good broker

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Do you have life insurance?  You may be in the 57% of Kiwis who have some – but are you sure you have the right type and level of cover?

Choosing life insurance can be complex, and it shouldn’t be a decision based solely on price. Without a good broker to talk you through the options, it’s easy to make mistakes and choose a policy that isn’t right for your stage of life or appetite for risk.

An article published in the NZ Herald on 1 August 2015 listed the six biggest life insurance mistakes Kiwis make:

1. Procrastination, or simply not getting life insurance

As we age and our health tends to deteriorate, we can find that our options for good cover can decrease.  This is particularly likely if a medical condition has already made its presence felt – by the time we need life or health insurance it could be too late.

2. Buying too little

Even if we have life and health insurance, we frequently don’t have enough.  This can place significant strain on family resources with the cost of medical care, existing debt commitments or an inability to work.

3. Not insuring your spouse

A debilitating illness or death of a spouse could interfere with your ability to work – especially where children are involved.  Having good cover for both partners in a relationship can make an enormous difference during what can be a hugely stressful time.

4. Failing to consider ‘extras’

Statistically we’re much more likely to suffer an illness than we are to die.  While some insurance policies cover you for more than death, they can have an array of extras that cover you for getting sick, injured, and unable to work.  Different policies can have huge variations in what is covered, so when choosing a policy you need to consider the many extras available and whether they are something you need.

5. Not reviewing your policy

Policies need to be reviewed regularly to ensure they are still offering the right sorts of cover,  at the right levels to reflect each stage of our life.  Larger mortgages, growing or shrinking families, a change in lifestyle – many factors can lead to a different set of risks in our lives and many of us don’t review our life and health insurances to take these into account.

6. Buying on price

Price is not necessarily the best indicator of value – don’t rely too heavily on price comparisons.  Comparing different policies with all their various options, inclusions and exclusions can very much be a case of comparing apples with oranges.

The value of a great broker

With so much complexity involved, it can be very reassuring to have the help of an expert to navigate through what can seem a bewildering range of options.

Ross Morrison from Mr Mod (mid-century furniture and design) recently approached Abbott Life and Health broker Bree Catterall after experiencing poor service from his existing broker.  By carefully reviewing Ross’ existing policy, life situation and risk appetite, Bree was able to tailor an effective solution.  This gave Ross peace of mind and the confidence that he was insured to the right level for him.

As Ross puts it, “Bree’s professionalism just ticked all the boxes.  I was immediately impressed by her obvious competence and expertise and felt I was in good hands.  I hadn’t received very good service at all from my previous broker. There had been a lack of follow up since the earthquake, and I was surprised to discover I had been paying for two different policies which effectively overlapped – basically paying double what I should have been.”

Ross continues,”With Bree representing me and my interests and acting as the liaison with the insurance companies, I know I’m in good hands.  I enjoy a responsiveness and service which I really value, combined with the sort of product knowledge and expertise so vital in the complex world of insurance.”

If you feel it’s time to get that life or health cover you’ve been putting off, to review what you currently have, or just to see what’s available – please get in touch with one of our Life and Health brokers.   We’re happy to help – get peace of mind knowing that you’re properly covered!

 

Sources:

http://www.interest.co.nz/personal-finance/61667/insurance-survey-suggests-only-20-new-zealanders-have-income-protection

http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11490116

Published on Wednesday, October 7th, 2015, under Latest News