 Though contemplating your eventual demise is never pleasant, life insurance is fairly straightforward. Investing in life cover is an excellent way to insure you and your family against the unexpected and unpleasant things that occasionally happen.
As impartial brokers Broadbase International have access to the whole New Zealand insurance market, and can help you to tailor an insurance solution that meets your individual needs. You'll find that insurance is very well priced in New Zealand, so please contact us to discuss your needs. Life insurance pays out a lump sum on death. It is designed to ensure that your dependants are able to support themselves. Some insurers allow you to access the lump sum before you die if you are diagnosed with a terminal illness. There are two types of life insurance: - Term insurance is an annually renewable contract between you and the insurer. Until you are 100, the insurer is obliged to renew your insurance. The premiums increase as you age. Term life insurance is ideal for people who only need their cover to last for a set period, for example while they have dependants or until their mortgage is paid off. An example of the cost of term life insurance is upwards of $150 a month for a couple where the wife is 47 and the husband is 50. A slightly younger couple, where the wife is 33 and the husband is 41, would be upwards of $60 per month.
- Whole of life insurance pays out when you die, but you can elect to stop paying premiums when you are 65. Your premiums can be stepped or even fixed for the term of the policy. It is much more expensive than term insurance, but can be economical if you intend keeping your insurance for a number of years.
Life insurance will generally not pay out if you commit suicide within a set time after taking out the policy, and some have exclusions if you die during activities such as car racing and piloting an aeroplane. You can get a quote for life insurance based on your age, sex, and whether you smoke or not, but before cover commences most insurers get you to fill out a comprehensive health and lifestyle questionnaire. They may also get you to have further medical tests. You must answer these questions fully and honestly, or your cover could be compromised. Some of the add-ons to life insurance that many insurers offer are: Critical Illness or Trauma CoverCritical illness insurance, sometimes also known as trauma cover, pays out a lump sum upon diagnosis of a critical illness which leaves you unable to work. Insurance companies generally have a set definition of critical illness (e.g. cancer, heart attack, stroke, heart surgery), and there is generally a stand-down time between when you take out the insurance cover and when you can claim on it. Total and Permanent Disability Cover This pays out a lump sum if you become unable to work due to an accident or illness. You will generally not be covered if you deliberately injure yourself, disable yourself committing a crime, or injure yourself through recreational drug taking. Income Protection This pays you an income in the event of an accident or illness. The insurer generally sets a waiting period (upwards of 4 weeks) before payment starts, and typical exclusions include back problems, mental disorders and complications of pregnancy and childbirth. You will also not generally be covered if you deliberately injure yourself, injure yourself committing a crime, or injure yourself through recreational drug taking. The policy pays out for a set number of years, and cover generally lasts until you are 65. Accelerated CoverSome insurers offer packages which include disability, income and critical illness cover along with life insurance. This can be an economical way of having a high level of cover, but any payout from one form of insurance will typically reduce the payout of another under the same policy – if, for example, you claim under you critical illness cover, your life cover will be reduced by the amount that you have been paid out already.
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