Health Insurance

How much does it cost to raise a child in New Zealand?

Shai Patel

WINTER 2017

By Amy Hamilton-Chadwick, Freelance writer and registered FA

It’s often said that it takes a village to raise a child. From a financial perspective, though, you had better hope the village has a solid investment portfolio. Raising children is a costly exercise, and the more you earn, the more you’re likely to spend.

The hard costs

The hard costs are the actual day-to-day expenses incurred by each child, either directly or as part of the family’s total bills: for example, food, clothing, accommodation costs, education, and healthcare. Australian bank Suncorp found in its 2016 Cost of Kids Report:

• The 9 to 11 age range is the most expensive, followed by ages 6 to 8, then 3 to 5, 12 to 14, and 15 to 17. The under threes were the cheapest.

• The first-born wasn’t the most expensive – parents actually spent more on each child as the family expanded, although housing costs didn’t increase much, which helped to offset the higher spending.

• Food is the biggest expense when it comes to your children.

For most Kiwi families, though, the basics are only part of the story. Optional activities like sports and music lessons add up rapidly, as do additional toys, technology, and sports gear. Then there are family holidays, private schooling, and extra tuition. And do you need a bigger house?

Those discretionary decisions are why there’s a big gap between what various households spend: estimates range from about $150–$450 per child per week, depending on your income. That’s a range of $7,800–$23,400 a year or $140,000–$420,000 across 18 years – plus another $12,000–$20,000 per year if your child attends a private school! And, as many parents discover, if your child stops costing you money at the age of 18, you’re in the minority. Plenty of parents are now assisting children in their thirties into first homes.

An extremely rough estimate

Obviously, you didn’t have kids to turn a profit. You love the expensive little blighters. But what does the average Kiwi kid cost to keep for a month, in hard costs alone? Here’s a very rough estimate, based on numbers from local and Australian research:

Food  $320

Housing and utilities $215

Education (public)  $40

Activities  $60

Holidays $95

Clothing $80

Transport $75

Entertainment $70

Healthcare $60

Pocket money $35

Communication/technology $60

Extra and unexpected costs $50

That’s a total of: $1,160 per month, or $13,920 a year, or $250,560 from birth to age 18.

The ‘Stay-at-Home Parent Penalty’ 

The biggest hidden cost of parenthood is taking time out of the workforce. This can be extremely expensive over the long term, even if in the short term it can seem like it’s a money saver when you weigh up the costs of childcare, transport, clothing, and so on.

Five years out of the workforce, missing out on all the promotional opportunities and additional KiwiSaver contributions and gains that entails, can result in the loss of hundreds of thousands of dollars in income. When you go back into the workforce, you’re often earning less money than when you left, too. This penalty will have an impact on whichever parent takes time out, but some research suggests stay-at-home dads are even harder hit than stay-at-home mums.

The good news

Holy mackerel, there’s got to be an upside, right? Yes, there is. Parents actually earn more than non-parents in New Zealand, according to Statistics New Zealand. One or both working parents may benefit financially, although fathers get a bigger boost.

In other good news, a 2015 Melbourne Institute paper found that children “have a very small impact upon wealth accumulation, seemingly at odds with the large ‘costs’ implied from expenditure-based estimates.” So even if the numbers look huge, over the course of your lifetime, it’s a surprisingly small dent out of your overall wealth.

So, if you are considering having a first child, or adding to your already growing brood, it’s wise to keep the costs in mind – even if the rewards are priceless.

The editorial above reflects the views of the editorial contributor only and content may be out of date. This article is sourced from a previous JUNO issue. JUNO’s content comes from sources that it considers accurate, but we do not guarantee that the content is accurate. Charts are visually indicative only. JUNO does not contain financial advice as defined by the Financial Advisers Act 2008. Consult a suitably qualified financial adviser before making investment decisions

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Health insurance: Value for money counts

Shai Patel

Obviously our health is not something we should penny-pinch on. But having said that, value for money definitely counts when you’re looking for a new health insurance policy or reviewing an existing one.

Here are some helpful tips on how to make the most from the money you spend on health insurance.

The value comparison

There is a plethora of choice in the health insurance market – a large range of benefits and pricing. It can be tricky to compare apples-with-apples, and more importantly, how policies, benefits and pricing stack up against what you personally want your insurance to cover. As your insurance adviser, we have access to a range of providers and products in the market and can help you shortlist a range of suitable products, based on your specific requirements and budget needs.

Getting the excess right

Selecting the highest excess you can afford to pay can be – depending on your circumstances – a good way to reduce your premiums. But if you choose this approach, it’s important to remember that having a large excess could mean that you miss out on being reimbursed for lower-cost procedures – in other words, the cost of accessing your insurance (your excess), may outweigh the cost of the treatment.

Focus on the extraordinary as opposed to general care

One option is to take out ‘hospital-only’ or ‘hospital and specialist’ cover rather than comprehensive coverage for general medical costs (e.g. visits to the doctor). It all depends on how you want your cover to work – but this approach can mean that you can assign more budget to higher-cost risks (the often unforeseen medical events that life can throw our way), instead of spreading it across health services that the household budget can stretch to (again, for example, a visit to the doctor).

Know your no-claims-bonus threshold

Some insurers reward their customers by offering a low-claim bonus. To be eligible, customers need to remain below a specific threshold over a certain period of time. Needless to say, this certainly does not mean that you should avoid filing a claim when you need to. But it is good to know what your insurer’s no-claims bonus threshold is (if they offer it) so that you can weigh up the benefit of claiming against being eligible for a bonus.

Don’t forget direct debit

Setting up a direct debit is another easy way to save a few dollars. Don’t expect a huge sum (we’re talking about shaving 2.5 percent off your premiums), but as they say, even small amounts over time can amount to significant savings.

Check the extras

As optional extras usually increase the overall cost of health insurance premiums, it’s important to check that you’re not adding unnecessary coverage to the mix. Once again, we can work with you to help identify what you need and remove any unnecessary add-ons.

If you would like to learn more or would like to review your policy, we’re here and happy to help.

An Adviser Disclosure Statement is available free and on request

Getting health insurance online? Read this first

Shai Patel

It’s no mystery we live in a high-tech age, where we are increasingly taking to the Internet to browse for and purchase items — including health insurance products.

We’re certainly strong advocates of Kiwis being informed, researching, cross-referencing and comparing products. But one thing is having a smattering of what’s out there, another is making sense of the fine print and understanding what the policy entails, or how it would relate to your current and future circumstances.

So, if you’re considering applying for insurance online, here are a few key things you may need to take into account.

Unwitting non-disclosure

Non-disclosure refers to the situation where a customer fails to mention (or misrepresents) a relevant fact at the time of applying for an insurance contract and, as a result, put themselves at risk of being underinsured or uninsurable in the future.

Non-disclosure can also be unintentional. When applying for health insurance, for example, people can underestimate the seriousness of a medical condition, or simply forget having had past health issues.

This may come down to the fact that insurers and consumers have different perceptions of the threshold for disclosure.

As your insurance adviser, we’re here to ask the right questions. Part of our job is to minimise the potential for non-disclosure, guiding you on what information you should share (regardless of how insignificant it may sound).

The lower-price game

The insurance market has seen a surge in web-based insurance providers, some of whom claim to deliver lower-cost premiums. As appealing as this may seem, don’t forget the cheapest option might not be the best one for you.

To understand whether a medical insurance cover will work for you, you need to understand the small print first, with its abundance of inclusions and exclusions. That’s where our expert advice comes into play

Time to claim? You can count on us

For a policyholder, claim time is often the biggest moment of truth. What can you claim on? Under exactly what circumstances will your policy pay out?

As we said, such an all-round understanding can be difficult to achieve without guidance. But having an insurance adviser in your corner at claim time also means you don’t have to worry about dealing with extensive paperwork. We’ll help you do that.

The bottom line is, there’s nothing wrong with getting insurance online. But before you submit your application, make sure you’ve taken the necessary time to understand the product – or ask for our help.

An Adviser Disclosure Statement is available free and on request.

Insurance company refuses to cover Auckland mum with rare illness

Shai Patel

 

Here is a great article which points out why getting good financial advice is important, so that you have the right cover for what you require it for. We listen to find out what you want the cover for, before coming back to you with recommendations.

Trauma insurance is a great cover to have, (We have had some amazing claims stories) but it is specific to a list of conditions (these vary dramatically depending on whether it is a bank product or one through Insure NZ). We will also look at other options that would have covered Selina in the situation below. We can mix and match cover, so that it will cover as much as we can for your particular budget.

Three months ago Selina Linton fell out of bed, unable to move her legs. She barely remembers the following weeks spent intensive care; doctors can’t say exactly when, or to what extent, she will recover.

The Auckland woman was struck by Guillain-Barre Syndrome — a mysterious, debilitating illness that attacks the nervous system. The 54-year-old dental assistant remains in a rehab centre, in nappies, unable to walk.

Her husband Nathan Linton, 53, said he was shattered to learn the trauma insurance policy they had been putting money into for over two decades didn’t cover Guillain-Barre. It wouldn’t pay out for what the family deemed an “incredibly traumatic” experience.

The Lintons’ discovery is not unusual. Trauma insurance, also known as crisis or critical illness insurance, is a broad term for a highly specific type of coverage. It pays a lump sum to be used any way the insured chooses.

Selina’s medical bills were covered by the state, so Nathan said the money would have gone into modifying their Titirangi home for the wheelchair his wife was likely to return with. He said the family were also “getting kicked” through being one income down.

Nathan said he hoped others might temper their expectations of trauma coverage after his family’s experience: “we’d have done better putting the money in a jar by the bed”, he said. Ideally, he wanted Guillain-Barre put on insurance companies’ trauma tick list.

A spokesman for AMP, the Lintons’ insurance provider for over two decades, said trauma policies didn’t cover Guillain–Barré Syndrome for several reasons, including because only 40 to 80 New Zealanders got it each year.

“Insurers can’t cover every eventuality – if they did premiums would go up and cover would not be accessible or affordable,” he said.

Guillain-Barre sufferers who permanently lose their ability to “perform key tasks independently” could, however, get a pay out through trauma insurance, he said. Selina was not eligible as doctors believed she would eventually recover.

Karen Stevens of the Insurance and Financial Services Ombudsman (IFSO) said she had many clients who, like the Lintons, felt misled by their trauma policy.

“Trauma in everyday language means something unexpected that happens to you and plays havoc with your life — but if it’s not specifically mentioned in your policy, it won’t be covered,” she said.

“We recently had a woman come in who had suffered fairly horrific injuries from giving birth to a baby, for example, which left her incapacitated. She said it was the most traumatic thing that could have happened to her, but since birth wasn’t mentioned in her policy there was nothing we could do.”

Stevens said disgruntled heart attack victims approached the IFSO “constantly”. While trauma policies typically include heart attacks, they only pay out if certain events play out.

Since being in hospital Selina has had pneumonia, a tracheotomy — doctors cut a hole in her windpipe to get air to her lungs — a flooded lung, and excruciating nerve pain. Her husband said her “good brain inside a very sick body” — which until recently could not speak — and the ever-fuzzy prognosis of Guillain-Barre had taken psychological tolls too.

She could barely keep her eyelids up at 4 o’clock in the afternoon last Tuesday, in a wheelchair at her Point Chevalier rehabilitation clinic. She held her husband and their 22-year-old daughter Lucy’s hands, and cried.

“Now I should be finishing work for the day and going home to cook dinner with my family,” she said. She missed the Titirangi trees, her dog, and “catching up with the girls”.

Nathan promised to get their wheelchair-unfriendly house ready for her “somehow”, to hasten her homecoming.

“We’ll suck it up,” he said. “But we thought we were responsible, taking out that insurance policy so that if something like this happened, we’d be able to look after each other comfortably.”

WHAT IS GUILLAIN-BARRE? 

– It is a collection of symptoms, rather than a single disease.

– They include rapidly progressive weakness, sometimes resulting in complete paralysis.

– Recovery typically takes three to six months, though two-thirds never fully recover and it can be fatal.

– It frequently follows another health problem such as food poisoning, flu, childbirth or surgery.

– Two cases were triggered by the campylobacter outbreak from contaminated drinking water in Hawke’s Bay last year.

If you have any concerns about your insurance cover and wish to have a free no obligation chat, please call on 09 551 3500 or click here

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Call for NZ to rethink bowel screening

Shai Patel

New Zealand needs to rethink its exorbitantly expensive second-rate bowel screening programme based on research from the UK.

That’s the view of Associate Professor Brian Cox from the University of Otago who says UK research proves flexible sigmoidoscopy screening is better than the faecal occult blood (FOBT) New Zealand is planning to use.

During a sigmoidoscopy exam, a thin, flexible tube, or sigmoidoscope, is inserted into the rectum, while a FOBT detects very small amounts of blood in a bowel motion before they become visible to the naked eye.

The results of a UK trial of flexible sigmoidoscopy published in The Lancet confirmed the reduced bowel cancer incidence and mortality persists for at least 17 years after the flexible sigmoidoscopy test. The benefit is very likely to persist for the rest of a person’s life, Professor Cox says.

He says a 15-minute sigmoidoscopy is by far the most cost-effective strategy for reducing bowel cancer in New Zealand and it could be performed by GPs.

“This is the most cancer-preventing 15 minutes anyone could ever undertake.”

A flexible sigmoidoscopy screening test once when aged 55-64 years reduces lifelong risk of bowel cancer by 35 per cent and mortality from bowel cancer by 41 per cent.

Professor Cox says the earlier results of the UK trial at 11 years of follow-up were published in 2010 but were not deemed sufficient by the Ministry of Health to guide the development of bowel screening policy in New Zealand and only a pilot study of two-yearly FOBT screening was pursued.

The evidence from the UK trial clearly indicates the need to completely rethink the approach to bowel screening in New Zealand before an exorbitantly expensive second-rate FOBT programme is instituted, he says.

A national flexible sigmoidoscopy programme could begin within 12 months covering the entire country.

About 3,000 New Zealanders are diagnosed with bowel cancer each year, and it’s the second most common cause of cancer death.

Budget 2016 invests $39.3 million for national bowel screening, starting with Hutt Valley and Wairarapa DHBs in 2017.

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MISTAKES TO AVOID WHEN BUYING INSURANCE

Shai Patel

Buying insurance can be confusing, but when the unexpected happens – a death, floods, car accident, unable to work or illness – it’s a relief to know that some of those financial losses will be covered. But how do you know how much coverage you need? And what questions should you ask before buying a policy?

Many consumers aren’t sure. Insurance coverage is far from one size fits all, so here’s a look at mistakes some consumers make when buying insurance.

Assuming insurance is unaffordable.

A large percentage of the population has no health or life insurance. Often that’s because people feel they can’t afford it. This is not correct and you will be surprised at what you are able to get.

The average consumer thinks life insurance is three times more expensive than it actually is. And often they do not research the actual costs.

When buying insurance, ask about potential discounts. These may be offered if you place all your insurance with one company or you may be able to get discount on medical insurance if you add some other cover with it.

Relying on assumptions or outdated figures.

It is surprising how many people we talk with who realise that they may either be underinsured or in some cases over insured because they have not had their insurances reviewed for a while.

As things change so quickly in the insurance industry, it is worthwhile reviewing your insurance on a regular basis because you need to make sure that it meets your needs at the time you need at the most.

Click here to see video on why to review you insurances

Shopping on price alone.

Comparing insurance policies can be confusing, but resist the urge to simply choose the policy with the lowest premium. Consider the company’s reputation and the coverage you get for the premium you pay.

What we do for our clients is make sure the company that we decide to choose, has good claims paying history, at application stage they have the company that will offer the best terms and policy wordings that at the time of claim have more chance of paying.

Glossing over the details.

Insurance companies pay a claim when you meet the policy wordings of the insurance cover. It is always wise to read and understand these wordings, so you are aware of may or may not be covered. We specialise in this, so you do not need to and available to answer questions if anything is unclear.

What I see when I meet with clients is that they have insurance cover, but due to the complex wordings of the policy document and not having a degree in law to understand these, that people find it hard to understand exactly what they covered for. I actually have a law degree from the UK and therefore am able to decipher these wordings for you and help you understand them in plain English.

Setting your excess too low.

Setting a low excess typically means higher premiums. Insurance is designed to protect against losses you could not cover yourself, so if you can afford to pay the first $500 or $1,000 yourself, you may not need a lower excess. Consider your own financial situation. How much of the risk are you willing to insure yourself?

Because insurance can be so complicated, we recommend a regular review of all your policies to ensure you are adequately covered. Now would be a good time to call and book a time for a review so you don’t find yourself out of pocket should disaster strike.

Feel free to contact us for a free no obligation chat – Insure NZ – 09 551 3500 or click here

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Diabetes – How much do you know?

Shai Patel

Diabetes is a disease where your body cannot control its blood sugar levels properly – either because your body doesn’t make enough (or any) insulin, or because your cells have become resistant to insulin.

Insulin is a chemical produced in the pancreas. It helps your body process sugars.

  • If blood sugar levels aren’t kept under control, diabetes can be life-threatening.
  • Diabetes can lead to other health conditions, including kidney failure, eye disease, foot ulceration and a higher risk of heart disease.
  • Keeping your blood sugar at a safe level means you’re less likely to have other health problems.

There’s no cure for diabetes, but there are things you can do to stay well. Support from your friends, whānau and health care providers can help

Heart and diabetes checks

Diabetes is our largest and fastest growing health issue we face in New Zealand. Diabetes is closely linked with heart disease (also known as cardiovascular disease or CVD), and together they are responsible for the deaths of more New Zealanders each year than cigarettes are. Many of these deaths are preventable.

The More Heart and Diabetes Checks Health Target has been established to help save these lives – aiming to have regular heart and diabetes checks for at least 90 percent of those at risk of developing these conditions. Find out more about heart and diabetes checks.

How common is diabetes?

There are over 240,000 people in New Zealand who have been diagnosed with diabetes (mostly type 2). It is thought there are another 100,000 people who have it but don’t know.

  • Diabetes is most common amongMāori and Pacific Islanders. They’re three times as likely to get it as other New Zealanders.
  • South Asian people are also more likely to develop diabetes.
  • The number of people with both types of diabetes is rising – especially obesity-related type 2 diabetes.

Type 1 diabetes

Type 1 diabetes is when your body has stopped producing insulin. People with type 1 diabetes need to inject insulin to live.

  • Type 1 diabetes is usually diagnosed in children.
  • Type 1 diabetes is less common than type 2 diabetes.

Type 2 diabetes

Type 2 diabetes is when your cells have become insulin resistant or your body doesn’t produce enough insulin to keep you healthy.

  • Type 2 diabetes usually develops in adults but it is becoming more common in children.
  • Type 2 diabetes is the only type of diabetes linked with obesity.

Diabetes in pregnancy

Pregnant women can also develop diabetes. This is known as gestational diabetes (or ‘diabetes in pregnancy’). It usually goes away when the baby is born.

But the problem is more widespread than that, and it appears to be worsening.

In fact, advocacy group the International Diabetes Federation has estimated that by 2040 the number of adults with diabetes globally will rise about 55 per cent to reach 642 million.

And there’s no room for complacency, with the federation stating that the condition kills one person worldwide every six seconds.

However, diabetes can often be effectively managed, even prevented.

While access to quality medical care plays a large role, so too does public awareness of diabetes, and to test your knowledge, we’ve developed a quiz.

Answer the 10 questions below as true or false, then check the answers to see how you fared.

Afterwards, you may also like to complete or update your Wellness Assessment to learn about your diabetes risk and potential ways of addressing it.

For more information and individual advice, consult an appropriate health professional.

 

What’s your diabetes knowledge?

Indicate whether the following statements are true or false.

  1. Glucose is found in blood only.
  2. Insulin is a hormone normally released into the blood after eating.
  3. Type 1 diabetes is a lifestyle disease.
  4. In type 2 diabetes, the body may stop responding to insulin properly.
  5. Being overweight does not increase the risk of type 2 diabetes.
  6. You can develop type 2 diabetes without experiencing obvious symptoms.
  7. Type 2 diabetes increases the risk of cardiovascular disease.
  8. People with diabetes should avoid sugary food and drink.
  9. Type 2 diabetes always requires medication.
  10. Gestational diabetes goes away after pregnancy.

Click Here For Answers

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Waikato Hospital’s staffing of operating theatres not at full capacity, resulting in fewer surgeries

Shai Patel

Waikato Hospital does not have enough doctors and nurses to run its operating theatres at full capacity, resulting in between six and nine elective surgeries being put off each week.

Because of the staffing shortages the orthopaedic department was behind by 265 cases at the end of last September and its inpatient waiting list was reduced from 585 in January to 387 in November.

That meant patients who had been assessed for surgery were told they did not meet the criteria because the hospital could not cope with the work. In turn the number of people who qualified for surgery was lower.

At the same time that hospital managers were frantically trying to recruit specialist doctors, anaesthetists and orthopaedic nurses to address the shortfall which has constrained the theatres since March last year, they were looking at ways to cut expenses to meet a $43 million savings plan.

In a public excluded report to the Waikato District Health Board on November 23, released under the Official Information Act (OIA), managers said a range of initiatives were needed to address the budget woes including reducing nursing levels.

DHB managers said costs were over budget despite lower than planned for patient volumes and delivery, for two main reasons: only $6.1m of the $43m had been saved, and an increase in full-time nurses.

Nurses were the biggest blowout to the budget at $3m while medical (doctors) were $1.1m.

The cost of nurses’ overtime for six months to December last year was $1.2m. A range of initiatives to remedy the situation included assessing nursing levels to “reduce where appropriate”, tightening up nurses’ overtime and annual leave, and examining the criteria for implementing watches – where a patient is monitored for an extended period.

DHB executive director of Waikato Hospital Services Brett Paradine said theatre recruitment of nurses was specific whereas reducing nursing costs was spread across the entire hospital.

He said nurses would not be forced to take annual leave unless they had more than two years’ worth with no plan to reduce it.

There is also a process where staff can request to cash in leave over the statutory minimums.

The Herald has previously reported that chief executive Dr Nigel Murray cashed in his annual leave as part of his renumeration package.

Paradine said the use of Safety Partners – watches for patients at risk of harm due to dementia or delirium – was being made more efficient and the DHB was considering using family members of the patients to provide the watch instead.

The DHB said in the reports that it did not have enough budget to treat acute cases and deliver elective surgeries required by the Ministry of Health’s national health targets, which could result in financial penalties.

Similar problems were occurring in other district health boards including Auckland, and Capital and Coast in Wellington where that DHB was behind on 300 elective surgeries at the end of December.

The backlog was largely the result of a shortage of senior doctors, according to minutes of board meetings at the DHBs.

Association of Salaried Medical Specialists executive director Ian Powell said the situation was dire.

“There is a severe shortage that is camouflaged by the failure of DHBs …to advertise needed positions and so there’s a difference between vacancies and actual shortages.”

Powell said DHBs were under financial pressure and relied on doctors working longer hours to cover the shortages.

Labour’s health spokeswoman, Annette King, said Waikato patients would be better off moving to Rotorua if they needed surgery.

“They can operate when people are less disabled and less in pain than they can at Waikato.”

Health Minister Dr Jonathan Coleman said health funding for the 2016/17 financial year increased by $568m to a record $16.1 billion.

Coleman reiterated previous comments that the Ministry of Health was working closely with Waikato DHB to address its issues in orthopaedics.

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Why review your insurance policies – How we can help!

Shai Patel

It is good idea to review with your insurances, if you have not seen your adviser for a while or do not have one give us a call 09 551 3500 or 0280 467873.

As our business name suggests, our team services New Zealand wide.

We can also arrange and review certain insurances for Kiwis living abroad.

Today 8 women will be diagnosed with breast cancer

Shai Patel

That is 8 women EVERY SINGLE DAY!!!

This year 600+ will most likely die, yet 30% of eligible women aren’t enrolled in free screening

And sadly 60% of young women don’t know the signs beyond a lump.

Breast Cancer Facts

  • Around 3,000 New Zealand women and 20 men are diagnosed every year – eight women every single day
  • The risk of breast cancer increases as women age. Around 75% of all cases occur in women over 50 years.
  • More than 600 New Zealand women die from breast cancer each year. Mortality rates have dropped by 27% since 1994 – a function of greater breast health awareness, the introduction of the national screening programme for women 44-69 years and more cancers being found earlier enabling successful treatment.
  • Regular mammograms find cancer early and save lives. The 10 year survival rate is 92% if a breast cancer is found through a mammogram compared to 75% if the cancer is detected by chance/self examination because the cancer is generally more advanced when a symptom appears. (source: NZ Breast Cancer Patient Registers).
  • The national screening rate is below 70% of women aged 50-69.

Breast Cancer Facts

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