Hawke's Bay Insurance Advice

Even though you’re healthy now, life insurance serves as a financial safety net and a smart investment in your future. You’re not buying life insurance because you expect to die young—you’re securing your future and protecting the people who care about you from financial burden.

Your age and health determine how much you pay. A 25-year-old compared to a 35-year-old can be a significant difference. Health issues can develop unexpectedly, making coverage expensive or impossible to get later.

Have you got any credit card debt or a car loan maybe? These are the kind of costs that Life Insurance could pay for if the unthinkable happened.

Your life will probably change. Many young people eventually marry, have children, and buy homes. If you develop health problems while uninsured, you might not be able to get affordable coverage when you really need it.

The amount of cover you need all depends on your specific situation. Some things you might consider:

• Outstanding debts (mortgage, car loans, credit cards, hire purchases)
• Funeral expenses
• Income replacement for dependents
• Future expenses like children’s education
• Subtract existing savings and other life insurance

Your cover should protect your dependents’ lifestyle, pay off major debts, and cover final expenses without leaving your family financially stressed. Review annually or after major life changes like marriage, home purchase, or having children.

Life insurance: Provides a lump sum to your loved ones if you pass away. 

Trauma insurance: Provides a lump sum payment upon diagnosis of serious conditions like cancer, heart attack, or stroke.

Income protection insurance: Replaces a portion of your income if you’re unable to work due to illness or injury.

Although we are really lucky to have ACC in New Zealand, it only covers medical costs and income replacement for accident-related injuries.

It doesn’t cover illness or trauma. You need other types of insurance cover for income loss and health care.

For example, if you’re diagnosed with cancer (not covered by ACC), you might be unable to work for months or years with no income replacement. Your family still needs to pay the mortgage, buy groceries, and cover daily expenses.

Life is always changing, and your Insurance Adviser is there for you throughout all the changes. We do yearly reviews to make sure you still have the appropriate cover and we are able to help make adjustments to your cover to ensure you can afford it.

It all depends on the insurance policy you have. Some insurance cover changes with age. There are options where you can level your premiums. Talk to an Insurance Adviser is the best way to find out what will work for you and your situation.

The key difference is how the policies interact with your life insurance.

Stand-alone Trauma Cover:

• Separate policy: Completely independent from your life insurance
• Full payout: You receive the full trauma benefit and keep your full life insurance
• Example: $200,000 trauma policy pays out for cancer diagnosis, and you still have your full $500,000 life insurance policy
• Higher cost: More expensive because it’s additional coverage

Accelerated Trauma Cover:

• Built into life insurance: The trauma benefit is part of your life insurance policy
• Reduced life cover: Any trauma payout reduces your life insurance by the same amount
• Example: $500,000 life policy with accelerated trauma pays $200,000 for cancer, leaving you with $300,000 life insurance remaining
• Lower cost: Cheaper because you’re not doubling up on coverage

Stand-alone gives you more total coverage but costs more. Accelerated is more affordable but reduces your life insurance when used. It all depends on your budget, family situation, and how much total coverage you need across both scenarios. An Insurance Adviser will be able to guide you on this.

Your insurance needs are different without dependents, but they don’t disappear entirely. Focus on protecting yourself from debt burdens to others and maintaining your lifestyle if you can’t work. The coverage amounts may be lower, but some protection is still essential for responsible financial planning.

• Health insurance: Medical emergencies affect everyone. This covers medical expenses, prescription drugs, and preventive care.
• Income protection: You still need income if illness prevents you from working, especially if you have a mortgage or are paying rent.

You might be able to do without large life insurance amounts, but talk to an Insurance Adviser to work out what would suit you and your situation.

Being able to make a claim is why you have insurance. If you have an Insurance Adviser, they can help you through the whole process. From lodging the claim, checking the progress and negotiating with the insurer to ensure the best possible outcome for you. They will be in your corner.

Claims are smoother when you report promptly, provide complete documentation, and understand your policy terms.

The basic process is:

1. Contact your insurer.
2. They will give you the correct forms to fill in.
3. Fill in the forms and lodge the claim.
4. The insurer will assess your claim.
5. They will come back to you if they need more information.
6. They will either approve or decline your claim.