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From behind the front lines of insurance cover

For many people, insurance is an essential part of their financial planning and unsurprisingly, it’s an essential part that we encourage!

Insurance provides a safety net in case of the unexpected and can give peace of mind in knowing that you and your loved ones are protected.

However, there are some who view insurance as a waste of money, and only purchase minimum cover, if at all. For those who have never had to make a claim, it can be easy to view insurance as pointless.

But for those who have had insurance policies and been paid out when something went wrong, the benefits are clear. Whether it's a major life event like a car accident or a more minor issue like a broken arm, insurance can help to cover the costs and minimise the financial impact.

We understand that it can be hard to value the benefits of insurance above the dollars you spend on it and people battle with parting with their hard-earned cash for something that might never happen. It’s something we see all the time at NZ Advice Group.

One of our long-term clients, Sarah, has had life and trauma insurance cover for 12 years now and each year noticed the premium was going up due to her age. Understandably it was disheartening for her to see more money going out of her bank account each month and seemingly nothing to show for it.

We talked each year about her options and about why she had the cover including the importance of having it if something were to happen. Each year she considered cancelling the cover but realised she needed to keep some of it in place if only for her peace of mind. Over the period she has been insured she has lowered the sum assured a couple of times to keep her premiums down but always kept the cover in place.

Unfortunately, Sarah fell ill with cancer and went through a large health battle over the two years following. She was paid out her trauma cover in full which covered the option of paying down debt and using non pharmac funded cancer treatments.

Sadly, Sarah is currently going through further treatment but still has coverage and still has the option to claim on her life cover if things get worse.

For Sarah, the benefits of insurance have meant a weight has been lifted off her shoulders and she can focus on looking after her health and getting better.

Sarah is not the only one who has had to think long and hard about her insurance cover. Something else that we see often is clients being presented with their options and then taking a long period of time to make a decision about whether or not to take out a policy.

Sadly, we have experienced many occasions when clients have taken so much time to consider their options that their health status has changed, and they are no longer eligible for the insurance coverage that we were initially able to offer. Having a health issue is often the catalyst that makes people decide to get cover, but it can be too late by then.

That’s why we always advise people that, when it comes to insurance, the sooner the better. The younger and healthier you are, the lower your premiums will be and the lower your chance of having insurance denied or heavy limitations placed on your coverage. Once you are insured, your cover will stay in place.

These two examples are incidents that we experience all the time and hopefully serve as a reminder that nobody ever thinks it will happen to them. Until it does.

For those who have experienced the peace of mind that comes with being covered and paid out when something goes wrong, insurance is truly worth its weight in gold.