First off, let’s be really clear. In some cases, buying insurance online does work. Usually this is when we insure our stuff. The insurance company knows exactly what they're dealing with, so a 'one size fits all' approach is fine. For example, insuring your 2008 Toyota Corolla is the same across the board.
Kiwis are already pretty good in this area. You and your family / friends probably have insurance on your car, your home, and all the stuff inside it. So you're sorted? Not exactly.
Regardless of what objects you own, and how nice they are, it's likely none of them are your most valuable asset. The majority of us overlook the fact that our most important asset is actually our ability to earn income - now, and in the future. If we lose that ability, it doesn't matter how nice our car is, we'll probably end up in a dodgy financial position.
The majority of New Zealanders still have a lot of earning to do in the future, and no insurance in place for the unfortunate situation where they can no longer work. They should be insuring themselves.
Valuing your car is easy. Yourself? Not so simple.
There are four ways to insure yourself:
Medical Insurance
Pays medical bills if you get sick.
No wait time - treatment straight away.
Access to non-pharmac drugs.
Income Protection
Pays a percentage of your income if you can no longer work.
Most people are off work long-term due to illness, not accident (therefore not covered by ACC).
Trauma Insurance
Pays a big lump sum of money if you are diagnosed with a serious illness.
Biggest claim is for cancer - one in three Kiwis claim their Trauma pay out.
Can be spent on whatever you like ie pay your mortgage off, alternative treatment etc.
Life Insurance
Your family gets a big lump sum payment if you die or are diagnosed as terminally ill.
Gives financial stability to your loved one, even if you're not around. Pays off debt and provides ongoing support for your family.
Who do you want the money to go to? You need to specify in your Will, otherwise the court decides.
Insuring yourself is far more complex than insuring things like your house and car, and that’s simply because there are many more factors to take into consideration. For example, factors such as your income, budget, current or future children, mortgage or other debt, and general life goals all come into it.
A common issue with buying insurance online is having no idea how much insurance to get, or how the complex policies work. We often see people that have bought far too much insurance, not enough insurance, or policies that don't even apply to them. All of these constitute ineffective insurance - something we're hell-bent on helping people avoid, or get out of if they're already in this position.
Tailored advice is key
We know this stuff can be really difficult to understand, and that’s why you shouldn’t just take a stab in the dark and buy it online. It's probably not going to be the best option for you.
An insurance adviser's help is free, independent, and ensures that your unique needs and budget are taken into consideration. They also know how the different products across the market work inside and out, and can lay out the pros and cons of each one.
But, and probably most importantly, if you ever need to claim on your insurance, they’ll deal directly with the insurance companies for you, giving you the best chance of a smooth and successful payout.
Have a quick chat with one of our trusted advisers to see if we can help, just click the link below.