The New Zealand Herald recently ran a five part series, “Cancer – the cost of a life”, investigating controversies in cancer testing and treatment. Cancer is a scary diagnosis and it is important to have an accurate understanding of the role that medical cover can play in terms of access to different treatments.

The cost of cancer treatment can be high, and not all of the drugs that are available to help in the fight are currently funded by Pharmac. That means people can be left to pay privately for the medicines that may give them their best chance.

You may have seen, or even contributed to, private campaigns to raise money to help fund cancer treatments not covered by Pharmac. Some of these medicines can buy people a little more time – such as in the case of Jared Noel, an Auckland doctor with bowel cancer who wanted to meet his daughter. However others, such as the new Keytruda treatment for melanoma (at about $300,000 for two years), may make the difference in actually beating the cancer.

While we do have good access to cancer screening and treatment in New Zealand, and generally expect treatment to be covered by the public system, the media coverage these fundraising campaigns have received has made us more aware that this may not always be the case. Pharmac, New Zealand’s Pharmaceutical Management Agency, is a government agency that decides which pharmaceuticals to publicly fund. The reality is that they are not going to be able to cover everything for everyone.

When reading these stories and contributing to private campaigns, those among us with medical cover probably feel a bit relieved that, should we find ourselves in this situation, we will not have to rely on donations from strangers to afford the medicine we need.

Unfortunately it just isn’t that simple.

Some medical insurance providers do cover cancer treatments that aren’t funded, however many don’t. Whether your insurer will or won’t provide this kind of cover will be in the fine print of your policy. If you are buying your insurance through a broker, they will know which do and which don’t – here at Plus4Group we only sell those that do.

Most policies have an upper policy limit of $200,000 per claim per year and will be covered if the treatment is recommended by a specialist.

It isn’t just medical cover that can help out with a cancer diagnosis; trauma cover can pay out a lump sum which can make a big difference with medical expenses and lost income.

As insurance brokers it is our job to know the ins and outs of every policy so we can help you get the very best cover, with no disappointing surprises at claim time. If you want to discuss your medical cover, or any other cover, get in touch with one of our brokers.

The statistics for Fidelity Life claims are out as a flyer that brokers can use to see where and what claims were paid in 2014. From 2012 to 2014 they paid a total of $96.5 million in death and terminal illness claims, $51.9 in critical illness or trauma claims, and $19.6 million in income protection.

In regard to death claims; there were two claims of note. A payment of $300,000 to a 38 year old sheet metal worker and of $250,000 to a 44 year vehicle inspector, both of whom took their own lives. 43% of claims were from cancer, 16% for heart issues and only 4% from accidents.

Of the trauma or critical care claims: 50% for cancer, 13% heart and 26% other. For women 65% of claims are for cancer and, looking through the individual claims, many were for breast cancer.
The largest men’s claim was $830,362 paid to a 53 year old company director for melanoma, and the largest women’s claims were $636,000 to a 43 year old chief financial officer and $709,000 for breast cancer to a sales executive.

Some 47% of income protection claims were paid out for muscular and limb conditions followed by cancer at 13% and depression 8%. A total of 386 claims were paid during this period for income claims. As Fidelity have a benefit for defined accidents the level of muscular and limb condition claims in this area may be a little higher than for the general market.

It is interesting to note that these claims would normally be expected to be paid by ACC. So it shows the value of having an insurance program in place.

From my experience mental health issues are often a reason for a claim and they can take a long time to be sorted. Often the client would be the last person you would expect to suffer in this area.
Again, it just goes to show what value a good insurance program can provide.

If you would like to see the report or just find out if you are covered in the areas where there are the most claims, please make contact me or any member of Plus4 Insurance Solutions.

Grant Uridge is chairman of Plus4 Insurance Solutions, a national insurance broking and financial adviser group.

Ask people what their most valuable asset is and they will likely tell you it is their home. And should you probe further you will find they probably have their home well insured. Great! Chances are they will have life insurance too. And they definitely have car insurance!

The problem is that your house is not your most valuable asset.

So what is?

You are. Or, more accurately, your ability to earn is. What you will earn in the course of your working life will far exceed the value of your home. It is your income that pays the mortgage that keeps you in the home you love. And it also keeps you living in the manner to which you have become accustomed.

We notice and remember big dramatic events such as house fires or death of spouse and dutifully do our best to protect ourselves and those we love in such circumstances. However long term illness or disability can be less visible and, even when we know someone going through this, we may not think of the long term financial consequences.

This infographic starkly shows why it is time for New Zealanders to shift their understanding of risk management and insurance.

Insurance advice nz

So what sort of events can impact your ability to earn an income? It could be something small – for someone in a highly skilled job using their hands, such as a surgeon or dentist, a simple kitchen knife accident could be enough to stop them doing the job they are trained for.

Or it could be something big, like a heart attack or cancer. For people under the age of 65 these are the most common illnesses that impact their ability to earn an income. Surprisingly the average age for cancer diagnoses in New Zealand is 41, with one in three of us having some form of cancer before we are 65.

The treatment for cancer, and the after effects, can keep you from the workforce for long enough that the lack of income will become a worry. Long enough to lose your home in fact. Which is the last thing you need in an already stressful situation.

While you might be able to get three month mortgage repayment holiday from your bank, treatment and recovery can take a lot longer. And you need to take into consideration any other debt you may be paying off as well as your day to day utilities and living expenses.

If you’re thinking that this is pretty sobering stuff, the good news is that it’s really easy to protect yourself. Talk to one of our brokers today about your insurance policies, to make sure you have safeguarded your most valuable asset – your ability to earn an income.

“Do something today that your future self will thank you for.” Whether or not you are a fan of bite-sized wisdom, this is a great point from which to discuss health insurance.

In New Zealand we are lucky to have a fairly robust public health system which can lead people to think health insurance is a luxury item they can do without.

To a certain extent that may be true but it isn’t the whole story. There are a myriad of benefits to not relying solely on the state to look after you should health problems arise.

Get it before you need it. There are two main points to this argument, firstly the upcoming shift in New Zealand’s demographics, and secondly establishing a relationship with a health insurance provider while you are in good shape.

New Zealand’s demographics are changing. The government currently spends 20% of its budget on healthcare and we have 10 workers (i.e. paying tax to fund the government budget) for every old age dependent, however in the next 20 years that number is going to shift to four workers for every old age dependent. That is quite a healthcare burden and raises some questions around the sustainability of our public system.

We don’t know how this will be managed, but the government will need to make some changes to fund this and we may not have the level of public coverage we are used to. We may find health insurance is no longer a luxury but a necessity and those with health insurance already in place, with fewer exclusions, will be well placed.

Which brings us to the second point. The fitter and healthier you are the less likely you are to think about health coverage – however this is exactly when you should be establishing your relationship with a health insurance provider – before you need it. You will then find yourself to be well covered when the need does arise.

Another benefit to having health insurance is getting the treatment you want, when you want it. Whether you are treated on the public or private system you may see the very same surgeon – the difference is how quickly you will see them. Through the public system you can end up waiting months for a non-urgent procedure (defined as anything that can wait longer than a week) which you may get as soon as the next week if you are covered by insurance.

What about setting up a savings account for unexpected medical bills instead? A popular idea, but what many people don’t realise is that surgery is expensive. Really expensive. And medical inflation is rising at a rate of 10% annually. The current cost of a hip replacement is $22,000; a heart bypass is $45,000. Even a hernia repair will set you back at least $6,000. Where the emergency savings account can really help you though is in reducing your premiums by having a higher excess on your plan.

I suppose I can cancel it if it doesn’t fit the budget. Many people have seasons when the budget gets a bit tighter, and health insurance can end up being up for discussion. The two biggest downsides to cancelling your policy are finding yourself uncovered when you really need it, and when you do renew your policy finding you are no longer as well covered. Health insurance should really be a part of your long term plan, and your advisor is well placed to help you make it work.

One last note on pre-existing conditions – don’t make the assumption that you won’t be covered without talking to an advisor – some exclusions expire after a period symptom free and you will still be covered for more than you won’t be – some coverage is better than none.

If you want to discuss more about your health insurance options call one of our friendly advisers for an expert opinion.

When it comes to personal insurance, deciding which cover to get can be overwhelming. Life insurance, income protection, trauma cover… Each sounds like a good idea, but sometimes budget dictates that you just can’t have them all right now. So how do you decide which is most important?

The first step is to find a good broker who will listen to you and talk to you about your needs and what is important to you. There is a lot to take into account, for example what life stage you are in, if you have any dependants (if so, how many and what age), how many more years you plan on being in the workforce, and so on.

While your personal situation is a key determining factor, it’s worth noting that most brokers will follow some general guidelines when advising you. To help you get your head around what is considered best practice by those in the industry, we’ve put together a brief guide to personal insurance.

It covers different types of personal insurance out there, why they are important and how they might factor into your planning. Please remember that, to make the best plan for you, it is essential to sit down and talk to an experienced broker.

Income Protection: Your income is key to everything and should be the very first thing you protect. Your ability to earn an income is the greatest asset you have and it holds everything else up. We wrote extensively about this in our blog post What is your most valuable asset?

Mortgage protection is a part of income protection and is vitally important, as for every home to lost to a fire, 48 homes are foreclosed on as a result of disability. It is hugely reassuring to know that should you be no longer able to work, your mortgage is covered.

Trauma Cover: Trauma insurance (also known as critical condition/illness, disability or total permanent disablement insurance) typically pays you a lump sum in the event of a traumatic injury or illness.

There are three main reasons this type of insurance is worth considering.
ACC will cover an injury, however before age 65 one in three people will be diagnosed with cancer, one in five will have a stroke and one in four will have a heart attack; and the average age of a trauma claim for cancer diagnosis is only 41 – none of these are covered by ACC
While your income and mortgage protection will cover you being unable to work due to an illness, medical advances mean heart attacks can be caught and treated early and effectively meaning people can be back at work in four to five weeks – and most income protection policies have a four week stand down before they kick in
If you have dependents and/or a spouse most polices will cover them too, which your income protection won’t. When disaster strikes it isn’t just the loss of income that costs you – travel, accommodation and special equipment costs can all add up.
The last thing your need when life takes a hard turn is additional stress about your finances, and trauma protection can at least take care of that.

Life Insurance: To find life insurance all the way down at number three on the list may come as a surprise – however it is the least claimed and the last claimed personal insurance. If you are leaving dependents behind, you absolutely must have life insurance to take care of them.

Health Insurance: In New Zealand we are lucky to have a good public health system so health insurance isn’t the absolute must have that it is in some other countries – which is why it is coming in at number four. Of course this doesn’t mean it isn’t important – you can read more about why we think it is in our blog post Do you really need health insurance in New Zealand?

Want to make a plan to protect you and your family from the unexpected? Contact us and we will discuss your unique situation and come up with the best plan for you.

Here’s an interesting fact: In the current ‘internet age’, every smartphone user has more information at their fingertips than the entire global population had just one generation ago.

Of course, having such vast quantities of information readily available has led to huge changes in the way we live life, communicate, spend money and find answers to our questions.

One of the trends emerging as a result of this change is medical self-diagnosis. Instead of going to the doctor and paying for a professional diagnosis, more and more people look online to find out about what their symptoms might mean, and what to do about them.

While this approach might save time and money, and be helpful in resolving minor medical issues, it’s a risky way to manage your health. After all, can you really trust the advice given in a generalised medical opinion, when the person giving the opinion has no knowledge of your specific circumstances and medical background? Of course not.

Fortunately most people take a common sense approach to more serious health complaints. They see a GP or specialist for accurate professional advice, and follow a treatment plan designed specifically for their circumstances.

We believe that, in this day and age, the same principles apply to insurance advice.

You may have noticed a number of web-based insurance providers in the market. These ‘DIY’ solutions claim to deliver lower-cost premiums by taking the whole process of researching insurance quotes online.

While this might seem like a quick way to find a solution, in reality using an online provider exposes you to a much greater risk of choosing the wrong insurance policy. What might seem ‘cheap’ upfront can easily lead to an omission that becomes very expensive come claim time.

Why? Well, simply put, there is no way that an online form will be able to assess your unique needs as well as an insurance specialist.

Real advisers understand the real impact of a life-threatening illness or injury, and can help you make a customised plan that offers financial certainty for your family, no matter what the future holds. They also understand the subtle differences in policy fine print and can recommend the best provider, product, and plan for your specific circumstances.

If ever you need to claim for the benefits of your policy, a real adviser will also be there to answer your questions and liaise with the insurance company on your behalf.

While online insurance quotes may seem like a cheap and convenient solution, the reality is that people often choose the wrong product and, unfortunately, the mistake isn’t usually discovered until claim time.

So, if you’re wanting to compare insurance companies, don’t hesitate to call one of our friendly advisers for an expert opinion.

How long have you been with your current bank? Whether it’s been since you were a nipper or later in life, chances are you’re a long-standing customer.

So, when it comes to buying life insurance, trauma cover or mortgage protection, it’s not surprising that many people take the option offered by their bank. It’s quick and easy to do, so why not?

While getting insurance from the bank might seem like a convenient solution, in reality some bank policies aren’t all they’re cracked up to be.

Here are three important things to look out for if you’re considering taking out an insurance policy with your bank.

1. How hard is the claim criteria?

When it comes to insurance, your policy is only as good as its fine print. In particular, in regards to mortgage protection cover (which pays your mortgage repayments if you can’t work), some banks’ pay out criteria can be very stringent compared to mainstream insurers.

In the past, we’ve seen policies where the definition of ‘total disability’ is so hard to achieve that it’s unlikely that the cover would pay out in the event that the policy owner couldn’t work. If this were to be the case, it would be very difficult (and stressful) to make a claim.

The irony is that, if you can’t work and can’t access your mortgage protection cover, the very same bank that sold you the policy may soon be chasing you over late home loan payments. Imagine being in that situation, where the same institution who sold you the policy is the same institution that declines the claim, and is the same institution that forecloses on your family home as a result. Potential conflict of interest? We think so.

2. How do you know you’re getting the best available policy option?

Have you ever wondered if the banks have some kind of vested financial interest in the insurance products they sell? Some banks produce their own in house insurance policies, whereas other banks have tied relationships with a certain insurer. For example, ASB Bank sells Sovereign products, this is because Sovereign and ASB are both owned by the same parent company. However what is consistent between them all is that each bank will typically only offer their one preferred option. This means that going to the bank doesn’t give you an opportunity to compare the market in an informed way, to find out how your cover actually compares in both price and quality. Given the information above, is a bank insurance recommendation the best thing for you, or the best thing for them?

Fine print is everything, so we recommend engaging an independent adviser who has access to a wide range of insurers and knows the “pro’s and con’s” between them, and what the best outcome for you will be based on your individual circumstances. RMA advisers have access to research data that demonstrates the differences between policies, giving you the peace of mind that you are receiving objective advice.

3. What percentage of claims are paid out?

Any insurer worth their salt will be completely transparent about their claims statistics – that is, the number of claims they pay out versus the number they have received.

Many of the major insurance companies publish regular statistics on these and yet, despite our recent efforts, finding these statistics from the banks is very difficult. In fact, as independent advisers, we have not been able to obtain any.

Of course, this begs the question – if the banks aren’t transparent about how many claims are paid out, how likely is it that your claim will be? Moreover, who is there to help you as an advocate at claim time? Another reason why working with an independent adviser can make all the difference.

At the end of the day we believe that insurance products sold by some New Zealand banks offer poor cover and should be avoided. You deserve to know what you are paying premiums for and how your premium compares to the market. Using an independent adviser means you will be offered a choice of the best products on the market, suited to your specific needs.