Confusion about insurance leads consumers to choose more costly coverage than they need and uncertainty about cost can cause people to delay or avoid the care and coverage necessary.
We know that in today’s cost of living crisis and rising interest rates, many Kiwis are struggling to get by.
But alarmingly, New Zealanders are also significantly underinsured, putting their loved ones at risk, findings from the Financial Services Council’s (FSC’s) latest research report Money and You – Taking Cover reveals that around 70% of New Zealanders are underinsured, putting their families and dependents at risk.
Only 11% of respondents reported having income protection insurance, 14% have total and permanent disability insurance, and 18% have cover for trauma or critical illness.
While respondents reported greater uptake of life insurance (38%) and health insurance (32%), an overwhelming percentage of the population are not covered should the worst happen.
Insurance can be complex and not all insurance policies are the same. It’s easy to compare two policies on price, but the cover you get may be very different. So we hosted a webinar about Insurance with Kim Mason, Monument Financial Adviser. You can watch the full webinar here.
In this blog post, we asked Kim to answer all the questions from the webinar, so take a look below.
1. We have both health and life insurance. But now am too scared to change both the policy and the company we belong to. If we change do we lose all the pre-existing covers, delayed cover eg 6 months for certain procedures etc.
There are definitely risks to be aware of when thinking of changing to a new provider and particularly if the current cover has been in place for a long time, the risk of having exclusions on the new cover that you don’t have now, can be high.
With medical insurance, there are some policies that do cover some pre-existing conditions after a wait period, such as 3 years, but there are some conditions that just won’t be covered and this is where a Financial Adviser can give you a recommendation after talking to you about your medical history.
There’s no harm in applying elsewhere to see what the terms would be. If you do apply for cover with a different insurer, it’s important that you keep your current cover in place until after you get an offer of terms and make your decision about whether to change or not.
Sometimes it can be a better option to stay with your current insurer but make some changes such as increase your medical excess or decrease your amount of cover.
2. How do I know what a reasonable amount of insurance is? AND how do I know I will not be "ripped off" in terms of premiums? ie is there an "average" to compare quotes to?
Its very difficult to define what is an average price in insurance because everything is very specific to you and your circumstances whether that’s cover requirements, health history, hobbies/job etc. This is very much how a financial adviser can help you because a reasonable amount of insurance can differ from person to person. Advisers survey the market so you can see you are not paying too much.
It’s important to make sure you compare like-for-like. Simple lump sum life insurance where a lump sum is paid on accidental death is much cheaper than a policy that pays on death for any reason at all.
Quoted premiums also assume you are in reasonably good health. If you are at a higher risk of illness or death, the insurer could “load” (increase) your quoted premium once you apply.
However, we do have two estimate tools that can give you an indication of what you might pay for both Life Insurance and Hospital Cover. They both provide a starting indication of price and then you can investigate further with an adviser who will fine tune it to your needs. If you want a quick look for yourself, have a look an online calculator for Hospital Cover or a life insurance estimate here.
3. With inflation and costs going through the roof, however salaries being fairly stagnant (without promotions, year on year increase in government is under 1.5%), if we should choose one insurance which one is a must have - life or health or critical illness or income protection or disability or any other? Thanks!
Different people and different situations will have different priorities – there is no one-size-fits-all. For some people income protection will be vitally important, whereas for others, Life Cover or Medical will be at the top of their list of priorities – it’s dependent on so many situational factors. And it can keep changing too – different insurance types can become more or less important as our situations change. Just remember that keeping some cover is better than no cover, so you are better off working with your financial adviser to find ways for it to remain affordable than cancelling the lot.
4. What is the standard type of medical insurance that general heathy people should get? Is it worth to go premium? why there are so many premium types of heath insurance?
“Base” cover with hospital plans cover surgery and associated specialists and anaesthetists costs. If you add a Specialist and Test module, that means that you can claim for specialists and tests even if they don’t relate to surgery. Often people will go with a base hospital plan and a Primary Care plan as they use the Primary Care plan to provide cover or partial cover for specialists and tests not related to a surgical claim. This is something that you can discuss with your Financial Adviser to work out what’s right for you. By providing options you have the ability to customise a plan that meets your personal needs as well as your budget.
5. I’m a young healthy person wanting to get insurance for things like wisdom teeth removal, however most cost effective plans appear to exclude wisdom teeth. I don’t want to get an expensive plan just to cover wisdom teeth as it is unlikely I will need to use insurance for anything else for a while, so what solutions would you recommend for this?
Some medical insurance plans do provide cover for unerupted or impacted wisdom teeth that require oral surgery, rather than at the Dentist. If you have already had an issue with your wisdom teeth though, you would need to disclose this in your application and you may have an exclusion for wisdom teeth removal.
6. How do insurers use medical history and/or information when assessing cover? How does an existing condition affect a policy?
Underwriters have guidelines that they work with and these can be different for each insurer. They use your medical history or information to work out the if there is any extra risk of you making a claim due to your medical history versus the rest of the population of a similar age and gender at birth. Sometimes this will result in an exclusion for a medical condition or body part, or it could mean a loading (higher premium).
7. I'm interested in learning about health and life insurance options for LGBTQIA+ individuals. I've encountered discrimination when trying to find life insurance cover. I have been told I am ineligible for life insurance because I experience gender dysphoria (for context, I am in my 20s and healthy). Why would this be a barrier to obtaining insurance, and how can that be legal grounds for denying cover? I am also interested in learning about health insurance which covers transition related healthcare for transgender people.
Some insurance products advertised online, or on TV, or promoted by banks are very basic and have many policy exclusions. If you contact a Monument Insurance adviser in your local area, they can approach several insurers on your behalf. The insurers used by Financial Advisers offer more comprehensive cover, with no such policy exclusions.
At present, no health insurer will provide cover for transition surgery, however according to the government website here gender affirming surgery has been funded by the state system since 1 July 2022. It is normal that when the government funds relatively new or complex surgeries - that the insurers do not.
8. Can I be insured for an existing medical condition? If so, which conditions?
Of the insurers and policies that cover pre-existing conditions, they all do work a little differently and this is where a Financial Adviser can give you a recommendation after learning about your medical history – for example some insurers that cover pre-existing conditions after 3 years cover endometriosis or congenital conditions , whereas others wouldn’t. It can be helpful to have a Financial Adviser to work with you on this.
9. Can you get income protection if there might be a very good chance that you could lose your job, or made redundant in the next few months?
Income Protection only covers you if you can’t work due to sickness – it doesn’t cover you if you lose your job or get made redundant. There is specific redundancy insurance available but generally it only covers you for 6 months and can be quite expensive (especially since COVID), and you can’t apply for it if you know that there is a good chance that you will be made redundant in the near future.
10. Healthy 46yo single mum. Have life insurance. When to start looking at medical/health insurance? Old way of thinking currently – get emergency treatment via ED. Haven’t thought about if I need any major surgeries so will just go on the waitlist when/if the time comes. Should I start paying premiums now at age 46? Why waste money when public health system can pay (tax funded also)? Perhaps thinking needs to change but I’ve done ok so far.
The problem with insurance and especially health insurance is that unless you take it before you need it, you will most probably will not be able to get it due to pre-existing conditions. As a single mum the option to be on the waiting list may well not be a viable option if your condition is such that you are either unable to work or are restricted in your ability to get around. A lot will depend on your overall financial situation. I would recommend for peace of mind that you have a obligation free meeting with a local Monument Insurance adviser and there will be no change for this advice.
Also, keep an eye out for group health insurance offered by an employer. They can be very attractive in terms of premium and often cover all pre-existing conditions.
11. Does income protection come with health insurance, or do you have to get that through a different company. How does having income protection really make a difference if you only get paid your income for a set period of time?
Income protection is different to health insurance. Some companies eg Partners Life and AIA do offer both and some insurers provide some incentives if you take 2 policies. The aim of income protection is to replace your income if you are unable to work due to a medical condition and your adviser will work with you to design the cover to start after you have exhausted any sick leave entitlements and other financial resources
12. I returned from the UK where I was supported by the NHS therefore didn't have health insurance. On return to NZ I was diagnosed with a health condition. My question is can I now get health insurance or do I have to put up with the terrible NZ health system. An example of which is I was admitted to hospital in October 2022 and an endoscopy was requested by the hospital. I am still waiting ( March 2023)?
Depending on your medical condition cover for certain conditions and treatment may either be declined or deferred for 3 years. You can however get cover for day-to-day medical costs irrespective as to your pre-existing conditions after serving a waiting period. If you arrange to speak to a Monument Insurance adviser, they will be able to discuss your options.
13. Hi team, one of my concerns around insurance would be that I have 3 young kids, potential high dentist bills or maybe the likes of braces etc, is this a good reason to get onto health insurance? Also what are the top 3 reasons why most people choose health insurance?
There are plans that cover orthodontic treatment however in many cases the actual cost can be significantly greater that the amount that is covered by the plans so you need to shop around.
People buy private health insurance so that they can:
1. Get non-urgent treatment when they need it and not have to join lengthy public surgery wait list,
2. The treatment will be at a time that is convenient for them, and
3. By a surgeon of their choice.
14. Not sure if this question makes sense, but with life insurance, can Trusts help with making sure the money definitely get to my children without much issues/bureaucracy?
The ownership of insurance policies and the use of trusts and or wills in many cases makes good sense however you should receive advice from a Financial Adviser and they may also advise depending on the complexity of your situation that you speak to a lawyer. We are however running a Webinar on 26 April on Wills and EPA’s that I suggest that you to watch here.
15. Does diabetes fall under one of the critical conditions? And if it's in the family genes, how does that impact the premium & cover/claim?
A lot here depends on the level of control the person has over the diabetes. The good news is that once an insurer has agreed to provide cover you will continue to be covered even if the condition deteriorates.
16. I assume pregnancy not covered in Income Protection/Mortgage payments?
No – but some insurance products may allow you to pause premiums during this time. Worth checking with a Financial Adviser.
17. Can you negotiate your loadings?
Your Monument Insurance adviser will try on your behalf, if they or you think the loading doesn’t seem fair. However the loading is exactly the same as the insurer would apply to any other applicant with similar medical conditions.
18. I have Southern Cross insurance for many years. Can I transfer companies and with conditions that have developed while on my other insurance?
No - you stand to lose benefits if you change insurer unless you have access to a plan via your employer where existing conditions are covered.
19. Finding a financial advisor is a bit daunting as I would like a reputable one. Is there a list of recommended advisors anywhere?
The good news is that all financial advisers are now governed by a Code of Conduct and have to have a minimum level of education and undergo regular compliance audits and professional developments. HealthCarePlus has access to a nationwide team of financial advisers via our relationship with Monument Insurance and if you follow the link here you will to able to make an appointment with your local adviser.
20. What are the fees for Financial Advisers? Do we have to pay the advisers to get advice?
In almost all situations there will be no fees payable. However, if you purchase an insurance policy the insurer will pay the financial adviser a commission. This is all disclosed in the Terms of Engagement which details the scope of the work they agree to do for you.
If you have more questions about Life and Health Insurance, you can submit it in the comment section below. Or if you are interested in finding out more about your life and health Insurance options, we have access to a nationwide team of Monument financial advisers who can provide you with more personalised approach. Monument has been our appointed business partner since the early 1990’s to provide financial advice to our members on life and health insurance products (HealthCarePlus is not legally able to provide financial advice).
It won't cost you anything for this chat and there is no obligation for you to do anything following the conversation. But we do strongly recommend that if you are interested in looking at insurance further that you seek their advice before making any decisions.
So to speak directly to a Monument financial adviser in your local area, please click the button below to book a chat with them.
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