Protecting your prosperity
Paying for trauma cover might seem like an avoidable expense, but it can prove vital to safeguarding your financial standing should the worst happen, says Lifetime financial adviser Nathaniel Byers.
OPINION: In my experience, trauma cover is the most important type of insurance second only to income cover to protect you and the assets you’ve worked hard to accumulate. Don’t ignore this insurance as a crucial part of your financial plan.
Trauma insurance pays out a cash lump sum should you be diagnosed with a critical illness or condition, and sadly the true benefits of the cover are often only understood when someone is diagnosed. During their lifetime, 33 percent of Kiwis will be diagnosed with heart disease,* while Kiwis affected by cancer is expected to rise by 50 percent by 2035**.
These statistics are sobering.
Many Kiwis are still unaware that, as well as the shock and concern that accompanies a serious illness diagnosis, enduring the condition can be financially crippling. Eligibility for ACC payments only applies in regard to health issues caused by an accidental injury, not for illness.
While health insurance ensures you receive the treatment you need, trauma cover provides cash flow should you be unable to earn an income, or need to pay for additional expenses such as hiring help for the day-to-day running of your household or paying for hospital travelling expenses.
Know what you’re covered for
Most trauma policies cover you for serious illnesses such as heart disease, strokes and cancer, and can insure you for up to 60 conditions. The range of conditions covered varies from plan to plan, so it’s important to understand your specific policy details and what it does and doesn’t cover. The best advice can be sought in conjunction with a financial adviser to compare policies to ensure you can get the cover you need.
What can I spend my pay-out on?
Over the years, I’ve seen trauma cover pay-outs used for many things:to cover debt such as car or home loans, to pay for travel to hospitals in other cities, to purchase specialised equipment and hire assistance around the house. You decide what pay-out amount you think you’ll need when taking out the policy and once the money is in your account, you can decide exactly how the funds are used.
Parents, don’t forget the kids
One of the smartest things parents can do is to cover your children with trauma insurance. On many adult policies, adding children to your plan comes at no extra cost to you. The cover is comprehensive and it can give you the freedom to stop working while you care for your kids during what is likely to be a stressful and uncertain time. If your children are in their early twenties, you’re likely to benefit from lower premiums and it will provide you with peace of mind knowing they’re taken care of.
Five trauma cover dos and don’ts:
- Do take out sufficient cover
- Don’t omit any relevant information on your application
- Do fully understand what you are covered for
- Don’t delay claiming within the required time
- Do lean on your financial adviser during the claim process
Nathaniel Byers is a Lifetime financial adviser based in Southland. He is passionate about providing financial peace of mind to families and professionals should unforeseen circumstances arise.
* The Heart Foundation of New Zealand
** The Cancer Society
Unlocking Financial Harmony: Navigating the Symphony of Life with Mindfulness
In the hustle and bustle of daily life, the concept of mindfulness often finds its place in discussions about mental health and stress reduction. However, its impact on financial wellbeing is a hidden gem worth exploring.
A 2021 survey by the New Zealand Retirement Commission ranked New Zealand’s overall financial wellbeing as 61 out of 100. In this case, financial wellbeing is defined as “a combination of meeting commitments, being financially comfortable, and resilient for the future.” The area in which New Zealand scored the lowest was preparedness for retirement, with a 43 out of 100 which highlights that around one in three New Zealanders are concerned that they will not have adequate savings to last through their retirement.
Finding Your Financial Ikigai: The Japanese Art of a Balanced & Purposeful Life
In a world that often measures success in financial terms, the Japanese concept of Ikigai offers a refreshing perspective. Transcending the boundaries of culture and geography, this philosophy loosely translates as "a reason for being". Ikigai is a convergence of what you love, what you're good at, what the world needs, and what you can be paid for. It's an approach that represents a broader view of prosperity, encompassing joy, purpose, and contentment. As financial advisers, we find this particularly compelling. This article delves deeper into how Ikigai can not only enrich your life but also inform your financial decisions for a more fulfilling journey.