Author: Admin

Get your FREE WILL – 100% discount available

Admin

As you know, your financial choices involve more than whether to get that daily flat white or not. Whether you are afraid of leaving debt to your loved ones, or want to ensure your children don’t use your inheritance to pay off someone else’s debt, having a good Estate Plan in place makes all the difference.

Having an up-to-date Will is the first crucial step to overall financial health, but there is more to safeguarding your assets. Being informed about your options can help really take control.

To help you take the first step towards a solid Estate Plan, we have secured the following discounted rates for you with Perpetual Guardian:

  • FREE ONLINE WILLS* if Perpetual Guardian is the executor. Discount of $100;
  • Consultation based Wills from $100*. Discount of $50 off standard rates; and
  • $350 bundle for one Will and two EPAs* (for Property and Personal Care and Welfare). Discount of $100 off standard rates.

You can take advantage of this opportunity by completing the form below and we’ll have someone contact you at a time you specify.  If it is the FREE WILL option, you will be sent a link to complete your will online.

Simply fill out the form below to get started.

* Terms and Conditions

What happens if I die without a will?

Admin

Did you know that 50% of New Zealanders don’t have a current Will?

By not having a Will, you put the future of your assets and your family at risk.

When you make a Will you are completing a final act of love for your family.

If you die without a Will, the law is very precise as to how your estate will be divided.

If you don’t have a Will, after you die:

  • There may be long delays in distributing your assets because of Court processes which could take months to resolve.
  • Due to these processes, your estate will face additional legal costs.
  • If you have young children, there could be uncertainty as to their future custody. A Will allows you to nominate the guardian you want for your children.
  • Your assets may not go those you would have liked. The law will dictate, not you.
  • In addition to the grieving process, your family could undergo a lot of unnecessary heartache while they try to resolve these issues.

With a Will:

You can provide your family with peace of mind during what is a period of sadness and uncertainty.

If you would like to talk with someone about a will, call us or complete the form below.

Kiwis Insure Houses over Income

Admin

Kiwis are more likely to insure their house than their income yet most people earn more in a lifetime than their house will ever be worth.

The Financial Services Council, a group representing the major banks and insurers, says six out of ten people have house insurance but just two to three out of ten have income protection.

The council is sponsoring a forum being held today called “Mind the Gap” to point out the risks people are taking by not insuring their biggest asset – their income.

It claims 54,800 families a year face their main income earner being off work for three months or more due to sickness and that many Kiwis do not have the financial backing to cope without that income.

Research commissioned by the council found 47 per cent of people aged 18 to 64 could not survive financially for more than a month after using up sick pay and annual leave.

There was also a significant shortfall in what people needed to survive on and what benefits were available.

Kiwis insure houses over income - www.insurenz.co.nz

An average family needed $683 per week to make up for a main income earner not being able to bring in money because of sickness.

But for a family with dependent children the maximum benefit was $340 per week for a job seeker allowance (previously known as the sickness benefit).

More than half of those questioned (51 per cent) did not know that if the main earners’ partner received $30,000 or more a year they might receive only part or none of the benefit.

Income protection insurance for a family of four with a combined income of $100,000 costs about $25 a week. This includes a month’s standown but if this was extended out the premium could be as low as $12 a week.

Peter Neilson, chief executive of the Financial Services Council, said its research showed people underestimated the value of their income and the chances of being off sick for a long time.

When asked what their biggest asset was 45 per cent said it was their home.

Yet a salary of $50,000 or more was worth $2 million over a 40 year working life, he said.

Of those surveyed 60 per cent thought they had the same or greater likelihood of being off work long-term following an accident rather than after sickness.

But working age Kiwis were 1.8 times more likely to be off work for six months or more from sickness than an accident, according to the council.

Over the last five years only one in eight of the households struck with long term illness had income protection insurance in place when it happened.

Neilson said the income gap following sickness needed filling and income protection insurance was one of the means of doing so.

The forum will also feature speakers from the Cancer Society, Stroke and Heart Foundations as well as people who have lost their incomes due to ill health.

Figures on the long-term sickness income gap.

Download PDF stats here.

source

Get Sorted: KiwiSaver or debt?

Admin

If you’re looking to get ahead, here’s where your dollars make the most sense

If you’re looking to get ahead, here’s where your dollars make the most sense

Imagine you’re holding a dollar in your hand. Where best to put it? The short answer is wherever it gets you the most back.

So what would help you get ahead more – being in KiwiSaver or paying off your debt quicker?

Whenever you pay off debt, you are saving yourself the interest you would have paid and moving yourself in the right direction financially. If it’s a credit card, that’s like getting a sure 20 per cent return for your money. If it’s a mortgage, think of it as a 6 per cent return to you when you put that extra dollar there.

But how does that compare with what you get if you put that dollar in KiwiSaver? And now that the $1,000 kick-start is no longer around, does that change the way things look?

Since your KiwiSaver money is invested for you in a fund, it can earn you returns each year. As we ran the numbers for this, we used a balanced return of 4.4 per cent after fees and taxes are paid.

So if you looked at just KiwiSaver investment earnings, which are difficult to predict, it would be a better choice to pay off debt.

But with KiwiSaver, on top of your investment earnings, there is also the government’s contribution. Even though the $1,000 kick-start is no longer there, for every dollar you put into KiwiSaver, you get an extra 50 cents, up to $521 each year. In that first year, that is basically like getting a 50 per cent return for the $1,043 you put in.

You also get your employer’s contributions that match the first 3 per cent you put in.

So altogether, say if you were on $50,000 per year and contributing 3 per cent of your salary, thanks to the government and employer contributions adding to the investment earnings, you would be looking at a 117 per cent return over the year. That’s way better value than paying off debt, and to find any other investment that’s guarantees a similar return is impossible (you may want to run the other way if someone offers one!).

Now, let’s say you had a mortgage of $250,000 and you joined KiwiSaver while you paid it off. After 30 years you’d end up with the mortgage paid and a KiwiSaver balance of $289,000.

But what if you took your KiwiSaver contributions and made higher mortgage repayments? Say you paid it off, then joined KiwiSaver and put your mortgage repayments into KiwiSaver to catch up on your retirement savings. Well, after 30 years your KiwiSaver balance would still only be $203,000.

So in the end, the answer to the question “KiwiSaver or debt?” is actually “KiwiSaver and debt”. You want to be in KiwiSaver to collect all the benefits. Make sure your annual contributions are enough to get the full returns, then you can use any spare funds to shrink whatever debt you may be carrying.

source

Biggest Life Insurance Mistakes

Admin

Six biggest life insurance mistakes Kiwis make

Six biggest life insurance mistakes Kiwis make

Do you have life insurance? Unless you’re single and don’t care what happens to your body and debts when you die, then you probably need some and possibly quite a lot of insurance cover.

The problem is, says David Boyle, general manager of investor education at the Commission for Financial Capability: “People don’t wake up and think, ‘I need to buy some life insurance today’.”

Life insurance is generally something that comes up because of an event, such as getting a mortgage or having children. It’s very easy in those circumstances to make mistakes.

I decided to look at the six biggest life insurance mistakes Kiwis make and ask industry players to explain them:

1. Not taking out life insurance or putting it off

Not buying it at all can leave your loved ones in the proverbial.

Putting it off means that when you finally do want insurance, you may not be able to get it because of your unhealthy lifestyle or you may find you’re saddled with numerous exclusions.

Insurance broker Lindsay Armishaw of Futureproof Life says: “Procrastination can be an expensive choice when applied to the decision-making process around our health and lifestyle protection requirements. People seem to forget one of the basic facts of life: as we age our health deteriorates and our options for making good [insurance] decisions decrease accordingly.

“As with many other life necessities, it’s better to have insurance and not need it, than to need it and not have it. This has been my experience over the years in business and life.”

2. Buying too little

It’s common to take a stab in the dark when deciding what level of cover to buy. Or we base it on what we can afford to pay.

Financial services consultant Russell Hutchinson, of Chatswood Consulting, says: “Most New Zealanders have too little life insurance. Academic research shows this to be the case.

“A good test is will you keep the house [in the event of needing to make a claim]? Losing the family home is the worst-case scenario that must be avoided. You probably want more cover than that, but at least pass that baseline. Most insurance plans will fail this test either because there isn’t enough insurance, or it doesn’t cover not being able to work.

“Get out pen and paper and check your sum insured. The most commonly bought sum today is $200,000. If you died, and that was paid to your partner, once they took that off your mortgage, if they still can’t keep the house, it isn’t enough.

“You also need disability cover, preferably decent income protection insurance, because you are far more likely to be disabled than to die. Now do the same test: is it enough cover so that you can keep the house? If it only covers the mortgage payment, it probably isn’t: you still need to pay power bills and eat, after all.”

3. Not insuring your spouse

Your ability to earn can be affected by the non-working spouse dying or falling seriously ill, especially if there are children. You might need to take time off work and there are costs such as childcare.

Chris Lamers, head of marketing and innovation at Sovereign, says: “As you develop your ‘what if’ plan, it’s important to consider a few scenarios. Often people look at what they would do if the main income earner couldn’t work for a period of time, or passed on. But often there is a significant impact if someone else in the household is seriously ill, or in the worst case, passes on. The main income earner may be required or wish to take time off to care for the person or for the rest of the family.

“As an example, someone told me recently of a full-time mother who got breast cancer. Obviously, this is a traumatic time for any family, but it became even more difficult because the main income earner couldn’t afford to take time off work to care for his wife and children. Even a trip to hospital with his wife became a problem. One solution would have been for the wife to have had a life or trauma insurance policy.

“The lesson here is to think about all the scenarios that could affect you and your family and make sure you have a plan in place.”

4. Failing to consider ‘extras’

You’re much more likely to suffer illness than die. Some insurance policies cover you for far more than death. They may have extras or related insurances that cover you for income protection, trauma insurance and disablement.

Nadine Tereora, managing director of Asteron Life, says: “When it comes to all the different types of life insurances there are, a payment on your death to provide for your family is the most well known. But insurance planning should also make sure that if something unexpected happens, like getting sick or injured, you have cover in place to help financially maintain your lifestyle.”

It’s a good idea to check what add-on benefits are available with a policy and consider whether you need them.

5. Not reviewing your policy

Your circumstances can change and insurance policies evolve.

Lance Walker, chief executive of Cigna NZ, says: “Your life is dynamic — it’s changing. Simply setting and forgetting about the sum you are insured for could see you with too little or too much insurance. Reviewing your policy at key life stages — getting married, taking on debt, having children, leaving the work force — ensures that you have the right amount of insurance for your stage in life.

“For example, you might need a high sum insured if you have small children and a large mortgage, but a much lower sum insured once the mortgage is paid off and you have more savings.

“A good life insurance policy will have some flexibility to change as your needs do, either by reducing or increasing your amount of cover without any further health or lifestyle questions if you have a life change such as a marriage, birth, adoption or getting a mortgage.

“If your personal circumstances change — such as you take up a risky hobby such as sky-diving — it pays to check your policy wording to ensure it still meets your needs.”

6. Buying on price

Comparing life insurance quotes is notoriously difficult. It’s very easy to be comparing oranges with apples and not realise it. One policy might pay out on terminal illness and another on death only.

Conor Sligo, general manager of Life Direct, says: “Price is important when choosing an insurer and you can almost always save money by shopping around.

“But there are other things to consider, too. We reckon a person choosing an insurer should also look at financial strength, policy quality and customer service, including the insurer’s reputation at claim time. The good news is that these are easier to compare than they used to be.

“For example insurers have to disclose their financial strength rating, and there are good independent sources of policy-quality ratings such as Quality Product Research (QPR) available in the market. These will help you avoid nasty fish-hooks — like a life insurance policy that has exclusions other policies don’t have.”

Another factor to consider is who a claim will be paid out to. Will the pay-out go to your spouse or a trust, in order to pay off a mortgage? Wills and trusts are also worth thinking about at the same time as you’re shopping for life insurance.

source

Read fine print on supermarket insurance

Admin

Policies might be cheaper but check what they actually offer.

Read fine print on supermarket insurance

‘Did you see that Countdown is selling insurance?” a friend emailed last week. My initial response was: “There’s nothing new in that.”

I bought a life insurance policy from a Tesco supermarket more than a decade ago when I lived in the UK. Australians can buy their insurance at Coles supermarkets.

On reflection I realised that buying insurance at the checkout is a relatively new concept for Kiwis, so worth delving into here.

This type of insurance is branded Tesco, Coles or Countdown, but is really provided by an insurer such as Cigna, Southern Cross or Allianz. The supermarket gets a commission for selling the policy.

Countdown isn’t the first New Zealand retailer to enter this market. The Warehouse has sold insurance at the checkout for a number of years. If you look at the Trade Me website you’ll see that one of the tabs along the top is for life insurance from subsidiary LifeDirect.

We’ve also bought branded travel insurance from high-street travel agents for years. The House of Travel policy, for example, is underwritten by Allianz.

Countdown and the Warehouse sell travel insurance, pet insurance and life insurance. Countdown also has accidental death insurance and a bill protection policy (also known as income protection), which covers you for up to $2000 a month if you can’t work because of illness or loss of your job.

The Warehouse offers credit card repayment insurance, which pays a portion of your credit card bills if you are off work for illness, accident or redundancy.

The advantage of “supermarket” insurance is that it’s easy to buy and sometimes it’s cheaper than policies sold by brokers. What’s more the Trade Me experience has shown that availability through everyday retailers encourages people to buy cover. There’s an argument that some insurance is better than none.

Conor Sligo, general manager of Trade Me-owned LifeDirect, says selling via Trade Me has been huge. The company is selling 69 per cent more policies year on year since it appeared on the auction site.

Yet there is a big proviso when buying any health-related insurance such as travel, life, income protection and even credit card protection direct. The catch is the policy wording, which can contain some pretty tricky fine print.

Susan Taylor, chief executive of Financial Services Complaints (FCSL), an organisation that deals with fallout from insurance contracts, has concerns about insurance sold online or through a retailer such as a supermarket. She says customers may not be warned about the importance of disclosing all relevant information to the insurer at the time of applying for the cover.

“In particular, it is extremely important to disclose all pre-existing medical conditions as a failure to disclose could lead to the insurer voiding the policy further down the track.” Insurers usually don’t cover you for a pre-existing condition.

If you’d had heart problems in the past, for example, then have a heart attack on holiday in the US, your insurer is unlikely to pay out for the eye-wateringly expensive medical bills.

You’d think “pre-existing condition” means something you’ve been treated for in the past. But it can also be for an illness that you weren’t even aware you had. FCSL and the Insurance & Savings Ombudsman have dealt with cases such as this.

The pre-existing medical conditions get-out clause is included in travel insurance policies as well as the bill protection insurance and the credit card repayment insurance policies.

A good insurance broker will make sure a client understands how the policy works and will ask the right questions to try to pre-empt claims being declined. What’s more, the broker will try to make clients understand the importance of telling the whole truth when applying for a policy. People who try it on or conveniently don’t mention something when they take these policies out sometimes find white lies come back to bite them.

If you’re not going to read and understand every word of the policy you’re about to buy, you could be throwing your money down the toilet.

The fine print in Countdown’s life insurance policy contained some clauses that were difficult to comprehend. Much of the nearly 300-word definition of cancer in this policy was beyond me, and I count myself as being very good at understanding insurance policies. On prostate cancer, it said, “prostate cancers diagnosed as TNM classification T1 with a Gleason score of 5 or less, unless major interventionist therapy (including but not limited to surgery, radiotherapy, brachytherapy or chemotherapy) is performed”. That reads as if that if you get prostate cancer and apply for the terminal illness benefit under the policy you could well have a fight on your hands. It’s here where a good broker is worth his or her weight in gold.

All of that said, insurance to cover you when you can’t work is very useful. Work & Income pays a pittance if illness ends your employment. Even ACC is less than your usual income.

Something like the Countdown bill protection insurance could be a financial lifeline in times of need. It pays out a monthly sum for six months. Income protection bought through a broker may pay more for a longer period, but typically doesn’t cover redundancy, which in my opinion is really important for many people.

One disappointment is that some of the policies I looked at aren’t any cheaper than going direct to the insurer. On the surface the Countdown basic pet plan came in at $20.52 a month for my cat to be covered up to $3000 a year, compared what I believe to be Southern Cross’s nearest equivalent at $24.62. Read the policy, however, and the latter has $2000 more cover and would only want me to make a 20 per cent co-payment (excess) on claims instead of 25 per cent.

The Warehouse PetPlan costs $17.04 a month for my cat for a maximum of $8000 cover, but has a higher excess than its supermarket competitor. The premium is exactly the same price as buying the policy direct from PetPlan.net.nz. At least a portion of your premium is going to a New Zealand-owned company, not an Australian insurer.

I’ve read a lot of insurance policies in my life. Pet insurance policies come on the trickier end of the scale. It’s not like a house or car insurance policy where you’ve got more or less the same cover whether you’re with AA Insurance, AMI or Lumley. The Warehouse pet policy uses 11,746 words to explain what you’re covered and not covered for. Countdown’s has 6405 words. Pet insurance must be a fine-print writer’s dream job.

I certainly hope the supermarkets get into house insurance. We need competition to drive down premiums, which were hiked outrageously and cover downgraded after the Canterbury earthquakes.

KPMG released a report on the insurance market earlier this month in which it said it expected competition to intensify. That’s good news for consumers.

Then a couple of weeks ago, Tower announced it is now offering full replacement cover for homes lost to fire. That’s something every home owner should be aware of. I plan to jump ship from AMI unless it follows suit.

Cigna/Countdown use one marketing trick that I quite like, although it’s not original. The pair have been giving away free short-term insurance policies.

As of Tuesday, Countdown was offering 5000 free grocery protection insurance policies. They are similar to bill protection cover and pay out $1000 a month for up to three months if you become incapacitated through illness or accident. The policy lasts for six months.

Countdown and the Warehouse also offer free year-long $10,000 life insurance to new parents.

source

How to save money on your mortgage

Admin

How to save money on your mortgage OPINION: Interest rates have been the big talking point of the past 10 days.

First, BNZ sparked this year’s spring mortgage rates war when it rolled out a record low one-year rate of 4.35 per cent.

Then ASB matched it.

That was followed by the Reserve Bank’s announcement that, as predicted, it was cutting the official cash rate to 2.75 per cent.

Banks quickly rolled out another round of rate cuts. Kiwibank was still firing mortgage war shots yesterday, lowering its floating rates by 0.25 per cent to 5.9 per cent and making smaller adjustments to its fixed rates.

This is all headline-grabbing and interesting for those who are taking out a new mortgage or have a loan due to refix soon.

For most households, their home loan is the biggest regular chunk of money coming out of their bank accounts.

But borrowers do themselves a disservice if they spend too much time trying to time the market and lock in the absolutely lowest interest rates they can for the absolutely longest time, thinking that is the best way to cut the cost of their loans.

Economists’ crystal balls are notoriously cloudy when it comes to predicting the future track of interest rates. This time last year, we were all told that rates were heading up and it was certainly the time to lock in mortgage rates.

Take it from one who followed that advice that those fixed-term rates over 6 per cent do not seem so attractive with 12 months’ hindsight.

At the beginning of the year, TSB made headlines with its 10-year rate of 5.89 per cent. Even Prime Minister John Key said he thought it was a good thing.

Ten years in the market is a long time and who knows where rates will be in 2024. By then, those TSB borrowers may be rejoicing in paying far less than the market rate. But right now, six months on, I wonder if they think they have such a good deal when ASB is offering 5.09 per cent for five years.

The lesson out of all of this is probably that rate picking should not be the biggest part of your home loan strategy.

It is nice to get a cheap rate – the difference between ASB’s floating rate at 6.5 per cent and its five-year special at 5.09 per cent is $186 a fortnight on a $500,000 loan being paid off over 20 years, a decent chunk of cash.

But a mortgage is a long-term commitment. Sometimes you will roll off a mortgage at just the right time to grab a great rate for a term that suits you. Other times you might not be so lucky.

It seems that borrowers who constantly chase the lowest rates on offer put themselves at risk.

Take that one-year 4.35 per cent rate and you will save some money over the next 12 months.

But where will rates be in September 2016? It is very hard to say.

You could find they have already picked up again and you are stuck facing a much higher interest rate bill overall than if you had locked in a longer term now.

Borrowers should choose interest rate terms that suit them. If you are likely to need to move house within the next few years, don’t fix for a long term. If you are budget conscious or a new homeowner and need to know what your commitments are, a five (or longer) year term may be ideal.

The argument to opt for a six-month rate rather than keeping your loan floating does seem sound – six-month rates are available below 5 per cent while floating is still above 6.

Some brokers argue that borrowers should break their loans up and fix the chunks for different terms so you have a bit of the loan rolling off every year to be refixed. This spreads risk effectively.

But when it comes to a mortgage, what really matters is the rate at which you pay it off, not the interest rate you pay.

If you take that 5.09 per cent rate at ASB, your payments on a $500,000 loan will be a minimum $1533 a fortnight to pay the loan off in 20 years. Bump that up by $67 a fortnight and you will pay it off in 19 years and save $23,342 at current interest rates.

Round it up to $2000 a fortnight, roughly what you would have paid when interest rates were at their last peak anyway, and you will pay off the loan in 14 years and save $109,988.

Put away your crystal balls and apply some strategic thinking to your loans.

Look at ways to mitigate risk, such as spreading your loans over different terms, look at what terms will suit your household.

But most importantly look at what extra cash you can chunk on your loan. That is where the biggest gains are to be made.

And the best part is, the rate at which you do that is entirely up to you – not the Reserve Bank.

source

The reason to have Medical Insurance – Waiting lists are growing

Admin

Up to 30% on waiting lists have operations delayed or cancelled but ministry says figures don’t tell whole story.

Elective surgery patients miss out on treatment

The number of patients getting elective surgery has steadily increased over the past decade – especially after it was made a national health target in 2007.

The Government’s much-publicised increase in hip, knee and other elective operations has been questioned in light of data which appeared to show the proportion of people missing out on treatment was growing.

But officials say growing waiting lists and a rising number of patients leaving hospital untreated do not tell the whole story.

The number of patients getting elective surgery has steadily increased over the past decade – especially after it was made a national health target in 2007. Since National came to power in 2008, the number of operations has lifted from 118,000 to 162,000 a year.

However, data released under the Official Information Act shows the proportion of patients on waiting lists who were leaving hospital untreated was also rising over the same period. As many as 30 per cent on waiting lists in some regions had their operation delayed or cancelled.

At Auckland District Health Board, there was a waiting list of 27,200 people for elective surgery last year. Of that number, 4558 patients – nearly 20 per cent – were admitted but left hospital without treatment. Last year up to November, 3822 patients out of 22,346 left untreated.

New Zealand First health spokeswoman Barbara Stewart, who provided the data to the Herald, said the ratio of treated to untreated had “markedly deteriorated” over the past decade.

The Ministry of Health said the figures did not necessarily reflect a health system under pressure. Many patients had their operations postponed because they were unfit for surgery.

“All it means is that the patient is not clinically appropriate for surgery or personally ready for surgery at that particular time,” a ministry spokesperson said.

But Ms Stewart said at the very least, the figures were “not the rosy picture painted by the Government but … a reality many of those who try to get surgery know”. She said many of those whose operations were delayed or cancelled were elderly or in pain.

Asked about the figures, Health Minister Jonathan Coleman pointed to the dramatic increase in total operations under National – up 37 per cent since 2008.

“This increase in access is supporting more people to be seen, a key approach in addressing … demand.”

The Government committed a further $27.5 million a year in this year’s Budget to meet increased demand for elective surgery. As concerns about “unmet need” grew, the Ministry of Health last year began measuring surgical referrals for the first time.

This meant officials would get a better understanding of the demand for operations, not just the number of people who were approved for surgery.

A New Zealand Medical Journal article published in November showed 36 per cent of people in two DHBs who were considered good candidates for hip or knee operations did not receive surgery.

These patients at Whangarei Base Hospital and Hawkes Bay Regional Hospital met the clinical threshold for treatment but not the financial threshold.

Dr Coleman said patients who did not make waiting lists continued to be monitored by their GPs.

source

URGENT CALL TO ACTION – Do you have medical Insurance that does not cover your pre-existing conditions?

Admin

ApprovedURGENT CALL TO ACTION

If you would like your pre-existing medical conditions to be covered after 3 years, then you need to contact me today.

This is a very limited offer and we need the medical cover in place and the first premium installment completed by the 31st July 2015.

Please call me to discuss further.

Shai – 09 551 3500

Email: shai@insurenz.co.nz