Five things you might not know about personal insurance

You’re probably aware that personal insurance helps you to cover expenses if you’re unexpectedly affected by illness or injury. But do you know how many different kinds of cover are available to you, how they work, or which ones you really need? Here are five things you might not know about personal insurance.

Most people take out insurance for the least likely event

Life insurance is one of the most commonly-purchased personal insurance products, but your chances of suffering a serious accident or illness that prevents you from working are far greater than that of dying. Life insurance only covers you for the worst-case scenario. There’s a whole range of other products available that cover more statistically probable events – income protection, redundancy cover, critical illness cover, and total and permanent disability cover.

You can cover just your mortgage or rent payments

Unless you’re lucky enough to be mortgage-free, accommodation costs are probably your largest household expense. If you can’t afford a comprehensive income protection product, but still want the peace of mind that you could cover your mortgage or rent payments in the event you were too sick or injured to work, you’re in luck. Some insurers offer a more affordable product that will pay your mortgage or rent repayments while you get back on your feet.

You don’t have to spend your payout on your injury or illness

If you receive a lump-sum payment because of a critical illness or permanent disability, you don’t have to spend it on treatment. You can use the money any way you like, including:

·       going on holiday

·       topping up your KiwiSaver to the desired retirement amount

·       paying off your credit cards or mortgage

·       setting up an education fund for your children

·       renovating the house

Health insurance can get you treated 99 days faster

Ministry of Health data for 2014* shows that the average waiting time for hospital procedures was 144 days, whereas for private procedures it was just 45 days. This means, on average, having private surgical cover could see you on the road to recovery more than three months sooner.

Some insurance comes with perks

These days, some health insurance policies don’t just cover your medical costs – they also reward you for leading a healthy lifestyle with discounts and special offers, such as money back on premiums, gym membership concessions, and free dental, optical and hearing exams.

If you’re worried that you don’t have the right kind of insurance, or don’t understand how your existing policies work, give Keith a call today to arrange an obligation-free review of your cover requirements.

* Data obtained from Ministry of Health statistics for privately funded hospital discharges vs publicly funded hospital discharges – 1 July 2013 to 30 June 2014

Simon Walker