The Accident Compensation Corporation (ACC) is an organisation that will assist New Zealander’s should you suffer a physical injury, sometimes including the mental trauma that comes along with it. They will cover treatment costs and/ or lost income while recovering to get you back to work. The amount you can receive is capped. Naturally caused illnesses or deaths are not covered by ACC. Therefore, additional personal insurance for you and your family is very important to ensure adequate cover/ support is in place.
Accelerated vs Stand Alone:
You can often choose to either have Accelerated or Stand Alone insurance benefits. For “Accelerated” benefits; if you make a claim, the amount claimed reduces the Life insurance by that amount. You are sometimes able to “buy back” the Life insurance further down the track. For “Stand Alone” benefits; it is a benefit on its own, and if you make a claim, the Life insurance amount will not be reduced by the claimed amount. Accelerated benefits are a cheaper option compared to Stand Alone benefits.
Accidental Death vs. Life Insurance:
Accidental Death cover will pay out should you die due to a sudden accident. This is a lower cost option compared to Life insurance, but protection is very limited. Life insurance cover will pay out should you die due to an accident, or from natural causes. This type of cover is a lot broader in comparison to Accidental Death cover.
A qualified insurance expert who can assist you with all things insurance, including tailored advice to help you choose the correct cover and necessary sums insured, as well as assisting you with any claims that may arise down the track. Here at Absolute Insurance Ltd we have a number of highly qualified advisers who have access to a range of different insurance providers. They can ensure that you get the right type of cover for you and your family.
This type of cover is designed to protect your business, should you or another key staff person become ill or injured and unable to work. It provides a monthly payment to help cover expenses including hiring a temporary staff member to take your place while you recover.
Buy Back Option:
If you have chosen “accelerated” Trauma or “accelerated” TPD under your Life insurance policy, and you make a claim for either the TPD or Trauma, the claimed amount will be subtracted from your overall Life cover. The “Buy Back Option” allows you to restore your Life insurance cover to its original amount, 12 months after claiming.
Cooling Off Period or “Free Look”: If you take out a new policy with us and change your mind, you have a “cooling off” period. During this time you are able to cancel and receive a full refund for any premiums paid. By law there is a minimum of 15 days cooling off period. Some Insurers, ie Partners Life offer a 30 day free look period from the date of issue.
Disclosure and Non-disclosure:
Insurance companies will ask a number of questions regarding your lifestyle, habits, work, income and medical history when you apply to take out cover. It’s important that you answer these questions correctly. If you fail to disclose information or fail to provide honest information, it is called “non-disclosure” and it can impact your ability to claim severely.
An exclusion is a medical condition or a specific event that is not covered under your insurance policy. Some policies contain general exclusions, but others will sometimes contain exclusions that are based on your personal lifestyle and/ or medical history.
Funeral Cover can cover the cost of a funeral, which can cost thousands of dollars and often needs to be paid quite quickly. Insurers usually pay out a Funeral Insurance policy quicker than a standard Life Insurance policy. Some Insurers offer a separate Funeral Cover policy, but others, including Partners Life, have a Funeral component built into the Life Insurance policy as well as the option to just has a Funeral Cover policy on its own. They will advance $25,000 from the Life Insurance policy once a claim is accepted by the Underwriting Team.
Income Protection Insurance:
If you are unable to work due to illness or injury, your Income Protection policy will pay you a significant portion of your income as a monthly benefit. You are able to choose the length of time you are covered as well as the waiting period in which you begin to receive your monthly benefit. Increasing Claim: If you are unable to work for a long period of time and you have an Income Protection (IP) policy in place, you may find that your monthly IP payment does not cover your increased living expenses. As an optional benefit you can choose “Increasing Claim” – your monthly IP payment will rise with inflation with this benefit in place.
This is an optional benefit on many policies. With Inflation Adjustment in place, your sum insured will increase slightly each year to keep up with inflation.
If you pass away or become terminally ill, Life Insurance cover will help to provide for your family. It is a lump sum payment to help cover any debts, funeral costs, covering lost income and overall financial support. Many Insurers, such as Partners Life, will also pay a Terminal Illness Advance Benefit. In their case - 30% of the Life Cover sum insured to a maximum of $250,000.
Mortgage Protection cover will pay your mortgage or rent payments if illness or injury stops you from working. Nominated Beneficiary: When you have a Life Insurance policy in place, you can elect to have a “nominated beneficiary” . This person (or persons) will receive the pay out from your Life Insurance cover if you pass away. If you do not name a nominated beneficiary, when you die your insurance money will be paid to your estate.
Personal Medical Attendants Report (PMAR):
This is a report that the insurer obtains from your usual attending GP at the insurers cost. The report details your full medical history and is used by the insurers Underwriting team to assess your health.
PHARMAC is the New Zealand government agency that decides which pharmaceuticals to publicly fund in New Zealand.
A pre-existing condition is all illness or injury that you had prior to taking out your new insurance cover. Sometimes your policy will cover your pre-existing conditions and other times you may have an exclusion placed on your policy for the condition. It’s important to disclose any information about your pre-existing conditions to your adviser.
This is the payment you make to the insurer in exchange for your cover. You can pay your premiums weekly, fortnightly, monthly, quarterly, half yearly or annually. Payment frequencies differ for some Insurers.
Stand down period:
This is the length of time that your policy must have been in place before you are covered for certain conditions. The stand down period is in place to prevent fraudulent claims, where customers know they are already sick. These claims can have an impact on the cost of insurance for others.
Stepped & Level premiums:
You can choose 2 different types of premium: Stepped or Level. Stepped premiums start of lower compared to Level premiums, but each year as you age, your premiums will increase. Level premiums start of higher compared to Stepped premiums but won’t increase as you age – unless you increase your amount of cover.
This is the amount that the insurer will pay you or your beneficiaries should there be a claim on your policy.
A Terminal Illness is an illness where your life expectancy is 12 months or less. Many Insurers will pay out your Life insurance sum insured early if you are diagnosed with a Terminal illness.
Total and Permanent Disablement Insurance (TPD):
TPD cover is a benefit that is paid out if an illness or injury prevents you from ever working again. It is a single lump sum payment to help cover any major expenses. You can select either “Own Occupation” or “Any Occupation” when taking out TPD cover. If “Own Occupation” is selected, the policy will pay out if an event prevents you from ever doing the occupation you were employed to do immediately prior to the event. For example, a Brain Surgeon could still technically become a GP if they suffered from nerve damage in their hands, but with “own occupation” the benefit would pay out. With “Any Occupation” it would not.
Trauma Insurance (Critical Illness Insurance):
Trauma cover is a lump sum payment that is paid out if you suffer from a specific illness or injury. It covers many common conditions such as dementia, heart attacks and some cancers.
Underwriting is the process where a customers application to take out cover or when a claim is submitted is assessed to determine how much risk the customer poses. A client’s occupation, medical history or lifestyle can impact the underwriting decision. Special terms and/ or a loading can be placed on the policy if it is of higher risk. Waiting Period: A “waiting period” is how many days you need to wait after becoming ill or injured, before the Insurer will pay out your claim. Common wait periods are between 30 and 90 days, but shorter or longer wait periods may be available. The longer the waiting period, the lower the premium becomes, but keep in mind that shorter illnesses will not be able to be claimed on if the waiting period is too long.