Are you prepared for the unexpected? Having comprehensive insurance cover will give you financial protection from the unpredictable aspects of life: serious health problems, medical emergencies, an inability to work, damage to your car, loss of your possessions and unexpected happenings when you are travelling.
While many people take the ‘fingers crossed’ approach when it comes to life risks, there are ways you can give your family the financial security they deserve. Not everything in life can be guaranteed, so it’s a good idea to manage whatever risks you can. The main risks are:
You suffer a serious health problem
Whether you experience a medical emergency or are diagnosed with a serious health condition, you’ll need to get quality medical treatment and give yourself time to recover from your illness or injury. Hospital care, specialist medical treatment and surgery may be required. Consider:
- Am I happy to rely on the public health system?
- Would I rather have immediate medical treatment at a private health practice?
- Can I afford private healthcare?
Medical insurance offers protection in the event that you suffer a serious health problem and are unable to afford private health care. Health insurance cover gives you the option of medical treatment at a time and place of your choosing. Find out more about New Zealand medical insurance providers.
You’re unable to work temporarily
If you suffer from a short-term illness, are diagnosed with an ongoing medical condition or have an accident, you may not be able to work for some length of time. Without your regular income, you and your family may struggle financially. Think about:
- Who is dependent on my income?
- How long could we rely on our savings if I was unable to work?
- Who would support me and/or my family?
Income protection insurance can make payments in place of your income, replacing the majority of your regular income and giving you time to recuperate and return to work. Find out more about income protection insurance offered by New Zealand insurance providers.
You are permanently disabled or injured
You may suffer a critical illness or an accident which leaves you permanently unable to work. Heart attacks, strokes and cancer affect a large number of people, and can mean you are unable to remain in the workforce. Consider:
- What would my financial situation be if I could never work again?
- Who would be involved in caring for me?
- How would medical bills and regular expenses be covered?
Trauma insurance offers assistance to those who suffer from a critical illness which forces them to leave the workforce before the usual age of retirement. Permanent disablement insurance will give you financial support should you be permanently disabled and unable to continue working. Through a lump sum or regular income payment, you will be able to continue without struggling financially.
You are diagnosed with a terminal illness or die
If you die, your family will suffer emotionally, but they may also find themselves in financial hardship. Make sure you can offer them the financial security you would usually provide, even when you can no longer be there:
- Who is financially dependent on me?
- How would my dependents cope if I should die?
- How will my funeral costs be covered?
- What debt do I have which may be inherited by my family?
Life insurance provides financial assistance to those left behind when a loved one dies.
You are unable to continue your mortgage payments
A home is the largest purchase you’re ever likely to make, so it goes without saying it’s a sizeable financial burden. If you’re unable to continue making your mortgage payments, through illness or accident, or if you should die, your family may no longer have a securely-held home. Think about:
- If I was to die, would my family or partner be able to continue regular mortgage payments?
- If I was unable to work, would my family or partner have enough resources to meet mortgage repayments?
Mortgage insurance allows you to have security that your home loan will not be a financial burden to your family or partner if you are unable to make payments. This type of insurance is similar to income protection and life insurance, but mortgage insurance payments are made directly to your mortgage lender. Find out more about mortgage insurance offered by NZ insurance providers.
You damage your motor vehicle (or someone else’s!)
Damage to your motor vehicle can become costly very quickly, so it’s great to get cover for accidental damage, loss or theft of your car. Motor insurance will also cover you for damage you cause to someone else’s car. Think about:
- Could I afford to replace my car if it was badly damaged or stolen?
- Could I afford to pay for repairs or replacement of someone else’s car if I caused damage to it?
Motor vehicle insurance is backup protection – just remember that you’ll only be covered up to an agreed amount (the agreed value) and you’re required to take reasonable care to avoid theft or damage of your vehicle.
Your personal belongings are stolen or your home is damaged
Personal insurance will protect you in the instance that your home is burgled or accidentally damaged, either by a fire or in a natural disaster (such as a flood or tsunami), or you accidentally lose personal possessions. Consider:
- Would I be able to afford replacement of some or all my possessions?
- What would happen if my home burnt down?
- Do I own expensive items that would be financially difficult to replace?
House and contents insurance will offer some financial assistance should you and your family have possessions stolen or your home damaged.
You have unexpected expenses while travelling outside your home country
Travel insurance is a must for all traveling overseas. It will protect you financially in the event of a medical emergency, theft of your personal belongings, accidental loss of money, cancelled bookings and flights, and other nasty surprises. Think about:
- Will I be able to replace any lost money or personal items while I’m traveling?
- Will I be able to afford medical care if I need it in another country?
- Will I be able to pay again for canceled flights or bookings?
Travel will take you into the unknown, so it’s essential to have some financial protection. Make sure you purchase insurance before departing, as you won’t find cover easily if you fail to do so.