Cave Financial Services

Maitain Your Wealth by Protecting Your Greatest Asset

Fri May 10th 2019

You might own your home, have one or more cars, and maybe you have rental property. Which one is your greatest asset? The answer is: none of the above. Insurance to protect all those things is important, but your greatest asset is yourself – and the income you bring in.

So when it comes to insurance, why wouldn't you protect your greatest asset? Stop for a minute, and think about what would happen if you couldn't work, or your income suddenly disappeared? Protecting that income should be your first insurance port of call.

The good news is, the right insurance can not only protect your income and wealth, it can also help maintain it too.

Choosing the right insurance

There's a lot of product choice out there when it comes to insurance. If you're looking to protect your assets and build your wealth as well, then it's important to do your homework, so you can choose the right insurance package for you, your family, your lifestyle and your assets. That way, you'll have more back-up if things go pear-shaped.

We've outlined some kinds of cover you might need:

Mortgage and life insurance

These are two kinds of insurance that are paid out on your death.

Life insurance offers your spouse and family the lump sum amount specified in your policy when you die. That way, they can afford funeral expenses and any other costs involved in losing you – and your income. Many life policies will pay out before you pass away if your illness is terminal.

Mortgage repayment insurance takes care of your mortgage specifically, and is particularly important if you have young children. As you get older, conditions may change – your children grow up and leave home, you may have paid off most or all of your mortgage, and your premiums rise. When you get to that point, you can save yourself some cash by removing that policy from your insurance portfolio.

Trauma and disability insurance

Have you thought about what might happen if you're unable to work? You could have a health issue – cancer, heart disease, diabetes – or a serious accident injury. There are immediate and ongoing costs involved, and trauma cover will take care of these, paying out when you've had a diagnosis.

If your health issue or accident leaves you with a disability that keeps you from working for some time, that's where disability insurance comes in. You may recover eventually, but the insurance can meet outgoings and expenses in the meantime, and help maintain your lifestyle.

Income protection

Similar to disability insurance, income protection provides a regular pay-out when you can't work due to illness or accident. That might be a percentage of your income, or a level of benefit as specified by your policy. Income protection allows you to live the way you want without having to liquidate assets or sell property.

Consider getting cover for your partner too, even if you are the only one in paid employment. Paying someone to replace any unpaid contribution if your partner falls ill – cooking, cleaning, gardening, childcare – could be very expensive, and your partner may even need care as well.

Guarding your health

In New Zealand, our public health service offers immediate and excellent care for emergencies and life-threatening conditions. However, if you have an illness isn't urgent you'll most likely be put on a waiting list for treatment or surgery. That can mean a long and uncomfortable wait, and your condition may even keep you from working, impacting on your quality of life and your capacity to work.

Paying outright for private healthcare is out of reach for most people – even simple procedures can cost several thousand dollars. When you have health insurance, you can get the treatment you need privately, and promptly. That way, you won't need so much time off work, no months or years waiting in discomfort or pain, and your lifestyle, wealth and family won't suffer. Most health policies also pay for medication, specialists and any equipment you need for your recovery.

An insurance checklist – dos and don'ts for getting the best cover

1.Don't roll over your insurance each year without considering your situation. Have there been any changes in your life that your insurance will need to cover? Are some policies no longer relevant?

2.Do put money aside in case of emergencies. That way, you'll have enough to pay any excess if you make a claim, and you can even take on some risk, thereby reducing your premiums.

3.Do consider the excess – a lower excess means higher premiums, and a higher excess will lower your premiums. Find a balance – generally take on a premium level that fits your budget, and be ready to pay the excess when the time comes.

4.Don't leave out any important information when you're signing up for a policy. If you do, you could be turned down for a claim, just when you need cover the most.

5.Do pay attention to the detail – read your policy carefully, or have someone look it over for you. If you're counting on certain conditions being covered, or you don't understand something, be sure to ask. You could be buying cover you don't need or isn't fit for purpose.

6.Don't double up – if you already have some kind of insurance through your job or with your mortgage lender, getting more for the same cover isn't going to mean a double pay-out – insurance companies don't work like that.

7.Do your homework – not all insurance companies are the same. To get the cover you want, at the premium you can afford, it pays to get quotes and read the fine print so you can choose the policy that fits you best.

8.Do take up multi-deals. When you're shopping for insurance, you might find that some companies offer deals for taking out several policies with them. House, contents, car, health, income, life cover – any of these and more can be provided by one company. You might save on premiums, but be sure the policies cover what you need insured.

9.Do look into your insurer's credit rating. You could be buying a policy now, but when you want to make a claim, it would be terrible to find your insurer has gone belly-up and the coffers are empty.

10.Reduce your premiums by upping your safety, security and health. You'll live longer and feel better, with good peace of mind.

Bonus tip:

If you want advice about all of the above (especially the fine print), contact a insurance broker. They offer a service free to you, helping you get the cover you need, at a price that's within your budget. When it comes time to make a claim, your broker can help with that too.

Keep your assets safe and secure

No-one can see into the future. All any of us can do is be prepared – ready to face the worst, while always keeping a positive outlook.

A range of well-chosen insurances can help, by supporting you through the hard times, and helping you maintain your valuable assets and wealth. You'll have peace of mind knowing that your family will be cared for, you'll make it through that trauma, and what you've worked so hard to build will be preserved whatever happens.

That way, when life throws a curve ball, you'll be ready.

Talk to Cave Financial today about insurance cover for your greatest asset – you.


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"Michael has a wealth of information to share with regards to financial planning...he has always provided valuable information to both my clients and me without being a pushy sales person! "
Vijay Nyayapati

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