In the current climate, stress seems to be running high and with covid-related illnesses, safety measures and mandates, some of us are running at beyond maximum capacity.
Looking after your well-being can easily be put on the back burner with more pressing issues needing to be addressed. As some of you know, I am a health and safety advisor for businesses as well. If I was to apply risk assessment principles to the topic of well-being, the current climate is what we call a “risk”. This can negatively impact our general well-being (emotional as well as physical). To address any risk, we put in place what’s called “controls”. These controls act as preventative measures before anything has happened rather than a reaction to the event. I see looking after our personal well-being as the same thing. Preventative measures put in place, before anything occurs, that helps us to be resilient and recover quicker. Now, the good thing is, that even if you are noticing your well-being taking a turn, it’s not too late to do something about it. Each day counts. Here is a link to an app that my daughter discovered, and we have both been using recently. https://www.mentemia.com/nz/home It was developed by John Kirwan – you may have heard his name around regarding mental health in NZ. We are finding it’s a great app, full of useful ways to address your well-being. Its free for personal use and if you are a business owner, it also has a paid option where you can make it available for your staff to use. Stay safe and well.
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Trauma Insurance is a living cover. It pays a tax-free lump sum to the insured for up to 45 health conditions that are specified in the policy wording. There is some variation in the conditions depending on the insurer, but the main ones are common to all insurers. 85% of all claims are for cancer, heart attack and stroke.
So, the question, why Trauma Insurance? Serious illness can mean a total disruption in family life. It may mean an income earner is unable to produce income (at least for a time) with corresponding financial pressure. It may mean that treatment not paid for by the public health system, could be beneficial. For example: Theres a cancer drug called Keytruda. It’s very effective for some cancers. It’s very expensive and it’s not paid for by the Health System for all cancers. (it recently became funded for some cancers such as advanced melanoma’s, but not metastatic bowel cancer for which it is also effective). Trauma insurance can be used to pay for such medications. Some people use the money from a Trauma Insurance claim to pay down debt and make life more bearable, in that way. Reduce the financial pressure. In short it can provide an essential buffer when things go wrong. This blog is general information only. For specific advice in relation to your circumstances, a Licensed Financial Adviser should be consulted. Health insurer NIB often publishes useful ideas on healthy living.
Here’s 3 quick ideas around healthy brain function from NIB; Walking (exercise) 30 mins a day Walking supports your mind directly by boosting neurochemical like dopamine and epinephrine’s. Your brain needs these chemicals to function well. Reading/video games Reading daily. Try and interpret what you have read and even write down comments. Another winning combination for brain health : Play a video game that challenges you mentally and physically at the same time, like Wii Fitness. Cholesterol Keeping your cholesterol within a healthy range, not too high and not too low is good for brain health too. Why not ask for a cholesterol check at your next doctors appointment All the best for another month You maybe wondering whether your current Life, Trauma , Business Revenue or Income Protection, covers Covid 19.
For all of the above policies we have put in place for you, the short answer is : Yes. Your insurances will pay the normal amount under the standard terms and conditions of the policy. Note : For, say, Income protection, this does not cover you if you can’t work because of self-isolation. It would however cover you if you contracted Covid19 and could not work because of it (providing the standard wait period under your income protection was met). Life Cover : Full cover, death from any cause, world wide. Trauma Cover : This covers 40 illnesses. 85% of all claims are for heart attack stroke and cancer. Covid19 is not one of the covered conditions. General : If a pandemic (or any other out of the ordinary event) is widespread, and claims are substantially out of the ordinary, a local (NZ) insurance company may claim against its reinsurance, with overseas reinsurers. The local insurance company also has the option of increasing the overall premium to all policy holders, to help cover claims. (This is only when claims are substantially out of the ordinary). I trust that’s of help in these difficult times. If you have a query, please do not hesitate to be in touch (email, txt or phone call). If you have Life, Trauma or Income Protection type policies put in place elsewhere and would like my opinion, please let me know. This blog is general information only. For specific advice in relation to your circumstances, a Licensed Financial Adviser should be consulted 1.Do your homework.
Work out what its going to cost to replace your house and contents. There are great online tools for doing this. For your home, try this link - Cordell calculator 2.Avoid buying on price alone. The cheapest isn’t always the best. Of course, to keep the premium down you may be able to select a higher excess and get a lower premium. That doesn’t affect the quality of the cover, it just means you pay a higher first amount of each claim. It might be better to think “I don’t need to claim for every little thing, I’ve got enough money set aside for that. So I’ll keep the premium down with a higher excess and know the cover is there for the majors. Like the house burning down!!) 3.Get a couple of quotes. This means you can compare prices (It’s easy to go online and do that). 4.Make sure you understand the cover. Make sure you know what is covered and what isn’t. I trust those few points are of use. I thought you maybe interested in this article that Generate KS published a while back. It gives a pretty good idea of why we don’t stop investing when the market drops.
“One of the benefits of making regular contributions into your KiwiSaver account is that you get to take advantage of dollar cost averaging (DCA). DCA involves buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. As a result more shares or units are purchased when prices are low, and fewer are bought when prices are high. DCA reduces the risk of investing in a single investment at the wrong time. For example, you decide to purchase $1,000 worth of shares in company X for each of the next three months. In April, X is worth $30, so you by 33 shares. In May X is worth $25, so you buy 40 additional shares. Finally, in June, X is worth $20, so you buy 50 shares. In total you purchased 123 shares for an average price of approximately $24 each - a much better result that if you had invested the entire $3,000 at $30 a share. As demonstrated above DCA can lower an investor's overall purchase price of a stock, as well as minimise the risks associated with market psychology - including market-timing and panic buying and selling. A lot of KiwiSaver members were unaware they were buying shares at the height of the GFC - just like Warren Buffet was - and similarly those shares have - as a whole - turned out to be great investments.” This blog is general information only. For specific advice in relation to your circumstances a Licensed Financial Adviser should be consulted Investing 101 - be prepared to walk away
Our inbuilt biases make it difficult for investors to walk away from investment opportunities they have worked on or sell investments when they go wrong. If an investor has spent considerable time (or money) researching a potential opportunity it can become difficult to walk away even if the investment doesn't quite stack up. The investor must be prepared to set the opportunity aside if the due-diligence does not support an investment case. In addition, people's natural aversion to losses can lead to poor and irrational investment decisions whereby investors refuse to sell loss making investments in the hope of making their money back at some later point in time. We believe that astute investors pay little or no attention to the purchase price of an existing investment in deciding the rational course of action regarding whether or not to hold, sell or buy more. The rational investor will estimate the likely return on the investment on a forward-looking basis and compare that return to other attractive investment opportunities and decide on the course of action from there. Diversification Diversification is one of the golden rules in investing. We all know the phrase "Don't put all your eggs in one basket". Unfortunately, time and again people do not apply this to their investments. For example, during the GFC when New Zealand finance companies were collapsing, thousands of New Zealanders lost much or even all of their savings. Many thought their hard earned savings were diversified by having invested in a number of different finance companies. Unfortunately, this is not diversification, as all their investments were in one highly-leveraged sector of the same economy. Please note the above is not specific investment advice, its general information only. This month I’ve provided some information on Private health Insurance for you. (Abbreviated from the website “Sorted”)
The older I get the more I realise the benefit of this type of cover. I had to have a procedure a while back. Because it wasn’t considered serious by the Public Health System, I would have had to pay for it myself (about 4ks worth). My health insurance paid for it and it was done within 10 days - That’s peace of mind! Have a bit of a read and flick me an email if you would like to know more. I can provide costs and benefits for all the main insurers for you - Sth Cross, NIB, AIA, Partners Life and Sovereign. It doesn’t cost any more going through a Broker or Adviser. Fast-tracking your health The advantage of health insurance – although you may end up with exactly the same surgeon as you would in the public system – often lies in cutting down the wait times involved. While the public system will treat you right away for anything life threatening or for serious injuries from an accident, you’ll usually end up on a waitlist if it’s not as urgent. How much of a wait are we talking about? One industry study found that it took on average 100 days longer for surgery if you were on the public list rather than on a private one. In the public system, the average time from the first GP referral to having surgery was 224 days; those going private would generally be seen by a surgeon a couple of weeks after the first visit. How to save on health insurance Shop around and uncover the discounts. By carefully comparing what the insurance companies are offering and getting quotes, you could save hundreds or even thousands of dollars over time. The way you pay your premiums – such as by direct debit or annual lump sums – may also reduce your costs. Live well and save. There are a number of discounts available for those with healthier lifestyles, such as for those who don’t smoke or drink too much, exercise and eat their fruit and veg. Take advantage of group rates. If your employer offers health insurance, for example, a ‘comprehensive’ policy that covers everyday medical costs may be worth it. These workplace-based policies are also cheaper because their cost to you is not typically based on your age, but rather where you work, and employers are often able to negotiate much better group rates because of the strength in numbers. Getting in early is also key – at a younger age, health insurance premiums are much cheaper. New packages from insurers aimed at twentysomethings, for example, can start at $1 a day or even as low as $4.95 a week. While these may not cover surgery, you can claim for everyday things like visits to your GP, dentist, physiotherapy and glasses. And because insurance does not usually cover for ‘pre-existing conditions’, starting early solves that, too. You can also reduce the amount of coverage you buy, such as by choosing a higher excess or a lower coverage of say $100,000 instead of $300,000. (According to Southern Cross, there is no single private procedure in New Zealand that would cost as much as $200,000 – almost all last year were below $100,000.) If you choose a higher excess, you’ll need your emergency funds available at short notice just in case. By focusing on the big risks – skipping comprehensive coverage for day-to-day medical costs and choosing ‘hospital-only’ or ‘hospital and specialist’ policies – you’ll ensure you’re protected from the highest health costs that might hit. And all the while saving on premiums along the way. This blog is general information only. For specific advice in relation to your circumstances a Licensed Financial Adviser should be consulted I’m too young to worry about saving for my retirement right now
Not true. The earlier you start saving, the more money you will have in retirement, which means the amount you need to save on a regular basis could be less (of course, the more you do save, the more you have available to enjoy in your retirement). If you start young, a small amount eventually turns into a big amount with the addition of compounding interest and the longer period of contributions. The later you leave it, the bigger your regular contribution will need to be to make up for the years you weren’t putting money aside and weren’t getting the benefit of compound interest. I can’t join if I am self-employed While you will need to make the contributions yourself, you can still join KiwiSaver and also benefit from the Government contribution. You will need to decide how much you want to contribute and then make the payments manually yourself (IRD can give you some information on this). Just remember – the Government will contribute an additional 50 cents for every dollar you put in up to a maximum of $521.43. That’s like free money – so make sure you are contributing the maximum amount of $1042.86 each year, and you’ll get the maximum contribution. I can’t choose my own provider Not so. You can choose your own provider, whether you join through your employer or you join directly yourself. All employers need to select a default provider, which you will originally be enrolled into, but you do have the freedom to choose the provider you want: you don’t need to be stuck in a default scheme. I can’t touch the money until I am 65 Well, actually, access is only available when you reach retirement age – which may or may not still be 65 in a few years’ time. However, there are some situations that you can access the money prior to retirement age, subject meeting the criteria around this. Funds can be accessed for a first-home withdrawal to help you buy your first house (a definite bonus in the current market), and you may also be able to withdraw the funds early if you are experiencing financial hardship. Each provider will have different rules around this, so approval to access is on an individual basis. There’s no point contributing if I can’t afford to put much in anyway While it may seem like building a comfortable retirement fund is a long way off when only contributing a little bit, putting away as little as $10 per week can give you a nice little nest egg when you retire. And of course, the earlier you start, the more you can take advantage of compounding returns and interest – that is, earning interest on top of interest to give your own savings a welcome boost. This blog is general information only. For specific advice in relation to your circumstances a Licensed Financial Adviser should be consulted Each month I like to write about something useful around insurance. After all most people spend a reasonable amount of income on insurance. This month it’s abbreviated from an article I read recently.
Five tips for buying insurance: 1.Shop smart. When looking for insurance, your No. 1 priority should be to find adequate coverage. Price is important, but you’ll want to determine what kind of coverage you need first. Then you can fit that coverage into your budget and determine which carrier can provide you with the most comprehensive policy for your situation. You may be tempted to choose insurance with the lowest price tag, but if you don’t have enough coverage (or the right kind of coverage), you will see less financial benefit when it comes time to file a claim. 2.Look for discounts. Once you evaluate your coverage needs, factor in your budget and find ways to save. Ask your adviser/broker if there are any discounts on your coverage. You can save money by “bundling” multiple policies, such as purchasing a home and vehicle policy from the same carrier. 3.Fill in the gaps. An average policy will cover the basics, but you may need to add extra coverage to meet your unique needs. For instance, you may have items like electronics or a nice piece of jewelry that would be financially difficult to replace, even with the assistance of your average renters or homeowners policy. You may want to add additional coverage for these items. 4.Purchase life insurance—you aren’t too young. Life insurance is essential, no matter how young or old you are. And for millennials, buying now may be a smart move because it’s cheaper to buy a life insurance policy when you’re young and healthy. This kind of insurance can help your family cover unexpected costs in your absence, including student loan debt or a mortgage, in addition to end-of-life costs. And if you have children, a life insurance policy can also support their education or childcare expenses. Additionally, every millennial should consider long-term disability coverage, which helps you stay afloat financially if an accident happens and you become disabled and unable to work. 5.Talk to an independent adviser An independent insurance adviser is an essential resource when purchasing insurance—especially if this is your first time. An independent adviser works with multiple different carriers, which is different from captive agents who can only sell insurance from the carrier they work for. Working with an independent adviser can help make sure that you are getting the best coverage, for the best price. You’ll also benefit from the advisers knowledge; they know how to talk you through your options and actually explain what each policy includes. Let us know if we can help. This blog is general information only. For specific advice in relation to your circumstances a Licensed Financial Adviser should be consulted |
AuthorBob Sinclair is the owner and director of Sinclair Solutions Archives
June 2023
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