Insurance News for Real People

Inflation and medical inflation what is the difference

Inflation and medical inflation what is the difference

This is a question often asked by clients, especially those with medical insurance.

Inflation loosely termed is the change in buying power $1 has today vs. a point in time in the past. The Reserve Bank is under instruction from the government to keep this in a band between 1% and 3% per annum.

The best lever for the Reserve Bank to use to manage this is the interest rate, which is why it gets a lot of focus.

Inflation rates help drive the decisions the Reserve Bank makes on interest rates. (In a very simplified way)

What does this really mean?

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What's is BMI and how does it apply to my insurance?

What's is BMI and how does it apply to my insurance?

Let us start with what is BMI?

BMI stands for Body Mass Index. It is a medical tool used by the medical profession to assess someone's approximate body fat.

  • BMI is a function of a person's height and weight. Doctors often use this in conjunction with a person’s waist measurement to get a more accurate understanding of how healthy a person's weight is.

I am guessing you would not be too happy to have your financial adviser measure you for your insurance application, so insurance companies only use height and weight.

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What really happens with a disability?

What really happens with a disability?

Let us say you are a builder and you take a tumble off the roof on a job and break your pelvis. (There have been one or two of these situations, it does happen) You are carted away in an ambulance to emergency and they patch you up.

You are now looking at 12-13 weeks for recovery. You will need assistance for things you never thought you would, nor will you like it much.

After 7 days, ACC will be paying to replace 80% of you provable tax assessable income, which is also tax assessable, and you are still lying in a hospital bed. At this stage of the game, you are starting to do your head in and depression is a real risk for you.

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How do you insure your new baby in New Zealand?

How do you insure your new baby in New Zealand?

There are a number of ways to insure babies and children. Let us start at the beginning, pregnancy and conception.

In New Zealand currently, assistance with conception is limited to what is publicly funded. Private medical insurance does not cover conception issues; it can cover some pregnancy issues though.

What can you have covered once you are pregnant?

The public system is well equipped for dealing with pregnancy. It is unlikely you will need additional assistance that requires funding if you have a normal pregnancy.

If you do have complications with your pregnancy, then there are provisions under most medical insurance policies specialists and tests benefits to assist with private specialist costs. What you do need to consider are the finer points of the policy, this is where your adviser comes in.

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Own you own home, check! Got it insured correctly, probably not

Own you own home, check! Got it insured correctly, probably not

 

The newspaper is full of timely reminders and this article is one of them. We are getting to 12 months in on the new home insurance approach of insuring for the rebuild value. It would appear that the vast majority are in for a shock when they have a loss to the house and they hear what it's going to cost to rebuild.

From the major insurers in the country the news isn't pretty. 60-75% of people took the rebuild value number on their insurance at the last renewal and just ran with it. Of the other 25-40% of people who did look at it and change it, 90% increased their cover.

The claims comment in the article would also suggest those who increased their coverage are the ones who probably have it right.

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Why should you regularly review your personal insurance

Why should you regularly review your personal insurance

 

One simple reason; your risk situation changes. Surprisingly so. I have found many situations where what was covered and covered reasonably well, is not only months later.

For example, a new client I was talking to had a cover that was only a few months old. The situation had changed quite quickly following a relationship break up, quite a bit of debt had been taken on as a result. The life cover taken was no longer sufficient to cover this and the repayment insurance they had, now has a significant shortfall.

Another client after reviewing their situation, a month later comes back. Oh yes, by the way, we have bought an investment property and effectively doubled our mortgage. Quite a change in risk there too.

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