Insurance News for Real People

Start up business, new year, new risks

Start up business, new year, new risks

I’ve said for many years that Kiwi's love being self-employed, and we seem to switch between employed and self-employed a lot. Some succeed, some have a change of direction, and some are about a change of situation. The point is that change is inevitable.

What will surprise you; typically, there are over 45,000 start-up businesses each year in New Zealand. Anecdotal evidence also suggests that a large number of these businesses are registered with the Companies Office early in the new year. Unfortunately, a lot of these businesses will simply fail due to cash-flow constraints. Some will be because the business isn’t sustainable, but the more likely reason is someone got injured or was prevented from working due to a disability.

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Does your current adviser really understand income protection?

Does your current adviser really understand income protection?

I've spent 24 years in financial services, during which time I've worked on a significant number of difficult income protection claims. I still don't understand why the indemnity-first approach for income protection still prevails with the majority of advisers in today's environment.

Well, I do. It's not the client-first approach we'd all like to expect. Advisers have to do less and get paid more, but that's another story.

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Home Based Worker - Protecting your income

Home Based Worker - Protecting your income

As a home based worker, insuring your income can be a bit of a challenge in some situations, though with post Covid, work from home has become more accepted by insurers. 

The question is what do you do and how mobile do you have to be to do it? 

To be clear, I'm talking about those people who earn an income rather than those who are in unpaid occupations. The later is another article.

I'll be exploring a few situations and the insurance approach for paid home based workers, to give you a bit of an idea about how you can protect your income if you work from home.

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The Changing Face of Income Protection

The Changing Face of Income Protection

Most people, when discussing income protection for the first time, assume it automatically covers job loss (redundancy). It doesn't, and it's often not an option. Over the last 5-10 years, this has ebbed and flowed, with mortgage repayment having redundancy as an option, and some income protection too. Post Covid, most no longer have redundancy cover available.

The point I am making is things change, but this article is not about redundancy.

What I am talking about is a new product Asteron Life released in 2015, that is quite different to the normal income protection approach.

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Why should I restructure my ACC?

Why should I restructure my ACC?

If you are self-employed the answer is you should! We don't joke about this, restructuring your ACC will give you more certainty if you are disabled through an accident and if you have talked to a financial adviser and arranged income protection, you will have more certainty for non-accident disabilities as well.

Let me start at the beginning. You started your own business and you have been doing your thing for a few years, you have no income protection because you have got by this long without it.

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Income Protection Offsets and why Mortgage Repayment Protection is mixed in to your income protection planning

Income Protection Offsets and why Mortgage Repayment Protection is mixed in to your income protection planning

Offsets are one of the most contentious and least understood provisions of an Income Protection contract with policy holders.

Why?

Simply it's not a selling point so it's glossed over in the advice discussion.

Keep in mind, having some cover is better than no cover, but having the right cover is even better.

I'm going to explore offsets in this article so you have a better understanding of what this may mean to you.

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Agreed vs Indemnity cover what is better?

Agreed vs Indemnity cover what is better?

In our opinion in all situations Agreed Value is. Yes, there are some clever tricks you can play with tax and claims on indemnity or loss of earnings, but the vast majority of claims just don't work out like that at claim time.

In my experience when it comes to Income Protection claims, indemnity claims cause the most headaches. In my time as a manager looking after advisers and as an adviser myself, the only problematic claims I have had were indemnity claims. Agreed Value never had the drama and hassle.

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Is income protection taxable?

Is income protection taxable?

The short answer: depends.

The longer answer: maybe, maybe not.

No I am not trying to be difficult, it does depend on the policy you have so maybe, maybe not.

The simple answer:

If you have indemnity or loss of earnings yes, it is tax assessable. If you have agreed value, it is generally not tax assessable. But there's more, no not a set of steak knives, really there's more.

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