Starting a family or have small children? As a parent, you’ll want to make sure you are doing everything you can to keep them happy – and financially safe. Your family is your most important asset, and you are theirs. With this in mind, Insurance can be a great step to ensure that your family is financially secure. But where do you start? What are the top Insurance covers to consider, and how can you tailor them to suit your situation?
Perhaps, you have never thought about Insurance before having a baby. Or maybe you have considered it, but put it in the 'too hard basket'.
The truth is, becoming a parent is a powerful experience – it ‘rewires’ you and reframes your priorities. If protecting your children is one of them, we're here to make Insurance as easy to grasp as possible –starting with this guide. Read on for three insurance types to consider...
Life Insurance isn’t something we like to think about. But if you have a partner and/or children relying on you financially, securing Life Insurance is a good way to prepare for the ‘worst-case scenarios.’ How would your family cope financially if you or your partner were to pass away? Would they be able to meet their mortgage repayments or their everyday expenses? Would the remaining parent need to juggle full-time work and childcare costs? A Life Insurance payout can help your family in many ways – from paying the bills and paying off debts, through to funding your kids’ tertiary education and even creating a lifetime income stream…
There’s not just one answer to this question. It depends on a number of factors, including your priority needs, any debts you may have (including your mortgage), and your income. Of course, weighing up all factors is not easy, but that’s also something that we can help you with. So please don’t hesitate to contact us if you’d like to discuss the detail of your situation. Quick tip: People often prioritise Life Insurance for the breadwinner, but remember – even if stay-at-home parents don't earn an income, having Life Insurance coverage in place for them as well can provide financial peace of mind while you deal with the loss.
One of the key components in the life insurance decision is short and long-term affordability. Generally speaking, Life Insurance premiums are age-related and increase as you get older. Alternatively, you can ‘fix’ your cover – with Level Premiums. With Level Premiums, you don’t have to worry about increasing premiums as they remain steady throughout the duration of the contract. They are usually slightly higher than age-related premiums at the start of the policy, but lower in comparison in the longer term – which makes them a good option if you are looking for long-term affordability. Once again, please get in touch if you’d like to learn more about this.
In New Zealand, there are limitations when it comes to taking out Life Insurance for children under the age of 10. And if you think about it, there wouldn’t be much point to it anyway. The key reasons to take out Life Insurance are to pay off debt and/or help your loved ones maintain a comfortable lifestyle. But because children don’t have either of these, Life Insurance is generally not something you should consider. However, there are other Insurance types you can think about – like Health and Trauma Insurance. We’ll come to these in a second...
Here in New Zealand, we are pretty lucky with our public healthcare system – it does a great job in urgent situations, such as accidents and emergencies. But when it comes to non-urgent cases, including serious illnesses, relying on public healthcare can mean long waiting lists. That’s where private Health Insurance can help. With Health Insurance, you and your family can get quick access to the treatment options you need when you need them, without having to meet the cost of private healthcare.
Generally speaking, the younger and healthier you are when you take out Health cover, the better. The idea is to get covered before anything has happened – so the fewer policy exclusions you or your child are likely to have. Also, if you have just welcomed a new baby or are expecting, keep in mind that – before the age of three months – children are often automatically accepted onto an existing policy. Get in touch if you’d like to learn more.
Ever heard of Trauma Insurance (or Critical Illness Insurance)? This type of cover is designed to protect you financially if you’re seriously ill or injured (if the condition is specified in the policy document). Importantly, it’s paid as a lump sum upon diagnosis of a severe critical condition, regardless of whether or not you’re unable to work. There’s no restriction on how you use the payout from a critical illness insurance policy claim. For example, you can use it to pay your mortgage or medical expenses, to clear yourself of debt, or even to hire help around the house. However, keep in mind that the list of covered conditions can vary significantly between different policies, so if you’d like to learn more, please don’t hesitate to contact us.
What would you do if your child became critically ill? It’s not an easy thing to contemplate, but as a parent, you know the answer. You'd be by their side. Trauma Insurance pays out a lump sum if your child is diagnosed with a severe injury or illness specified in the policy. This can help you and your child focus on recovery, while also allowing you to take time off work to be there with them. You may be able to add children's Trauma cover to your policy at no (or very little) additional cost. So please get in touch if you have any questions.
Having a young family can be the best time of your life, but it can also be tough financially. So it’s important to make sure that you get the right level of coverage at a price that fits your budget. Working with an Insurance adviser can help you strike a balance between your needs and goals, always keeping your unique circumstances front and centre. Because we get it – every dollar counts. So here are five quick tips for achieving value for money with your Insurance plan.
CHOOSE THE RIGHT INSURANCE COVER(S)
As a parent, some Insurance types may be more important to have than others. But again, everyone’s circumstances are different. If you'd like to ensure that your short and long-term needs are met, let’s have a chat.
SELECT THE RIGHT BENEFIT AMOUNT
Select the right benefit amount – not too high, not too low. Insurance premiums are based on a number of factors, some of which aren’t in our control. What you can control, though, is the benefit amount. Let's talk: we can help you avoid being over or under-insured, so that your most important assets are protected.
INCREASE YOUR EXCESS
If you have Health Insurance, or you’re considering taking it out, you can save money by increasing your excess. It’s a good idea to select the highest excess you can afford to pay: the higher the excess you agree to contribute upfront, the lower your premiums will be.
CONSIDER LEVEL PREMIUMS
As we said, Level-Premium Life Insurance or Trauma Cover stay at a constant rate for life, potentially helping you save thousands in the long run. But is it the right option for you? We can help you find out.
REGULARLY REVIEW YOUR COVER
As Insurance advisers, not only can we help you with quotes and claims – we can also help you make sure your cover keeps up with your life. As your life changes, so may your Insurance needs; and that’s why we recommend our clients to book in a review with us on an annual basis.
Working with an insurance adviser can help you save money and time, while boosting your peace of mind that your family’s financial future is protected. So if you're looking for the right cover for your unique needs, keep us in mind: with us in your corner, it's easier to secure an appropriate level of coverage at a price you can afford.