When money is tight, should you drop insurance?

With Christmas approaching, now is the season of strained bank balances. So is dropping insurance policies a good way to watch your pennies? Simon says no.

My eldest has decided he wants a turtle for Christmas. These are not the cheapest items to get, let me tell you. So, having a birthday close to 25 December, he's accepted the fact that this will be a combined present. Very kind of him.

If you’re considering getting a turtle here are the costs to expect: First, they need a habitat. They need a UV light to live (this isn’t a “treat” for them, it is a NECESSITY). Your tank will need a light and an area for them to bask in. You need to have a docking station for them to crawl out of the water and bask in their lighting (also mandatory). Heavy duty aquarium filter, a very specific habitat, water heater ... the list goes on.

For the full turtle set up, you won't see much change from a grand—and that doesn’t even include the turtle!

Next question is what type of turtle to get. Painted? Red ear slider? Eastern box? Yes, these are all types of turtles. I haven’t started going crazy … yet.

My son has been saving like mad for months, meticulously putting ticks on the chalk board each time the dishes are done, room is tidied, washing is away.

He's also very understanding that mum and dad have all sorts of unavoidable life bills to make (regardless of the holiday period) like a mortgage, food, petrol, day care ... and, boy, does that list go on.

I’m sure I’m not alone in facing some financial pressures at this time of year. For many, these times might mean skipping a few meals out (and drinks), cutting back on subscriptions, uploading some old treasures to Trade Me and maybe even cancelling a policy or two.

Whatever you do to save your pennies, don't do that last option. You never know what’s just around the corner. And if things do happen to turn sour, those insurance policies could be the most important asset you have.

What have you arranged to be left over when you go? Is the mortgage covered? Kids university fees accounted for? What about if you get sick? Income protection? Trauma?

Most of the folks I talk to about insurance want to look at what they have in place because somebody they know had something frightening happen. These events can kick you into gear to get covered. But don’t wait for those events to spark you into action, now’s a good a time as ever.

So, where can we help?

As unaligned brokers, we provide free, confidential, unbiased reviews of people’s insurance. These chats are frank discussions about what you should consider having in place. We’ve found that people can often save up to 20 per cent on their premiums simply by having a chat with us.

And maybe you’ve already got your insurance sorted. I'm happy to arrange a special something for you if you refer a friend (that draws down a policy). I've given away plenty of awesome referral gifts recently … but, please, don’t mention turtles!

Get sorted prior to Christmas (and do keep in mind portion distortion at the table).

Simon O’Neill is a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.

Update on the Sovereign Insurance sale

New Zealand's largest insurance company, Sovereign (of which Velocity Financial supports), has been sold with the new buyer being AIA. 

This sale will be finalised mid next year. Sovereign's history to become New Zealand largest insurer has involved amalgamating 27 companies (I think that's the number) into one big one. So this is another step in that process of a smaller insurer being absorbed into an even larger company.

What does this mean for you?

All existing policies and conditions will be honoured as they are legal binding contracts. In the insurance land, this purchase is viewed as a good thing with improvements for clients to come.

We will certainly be keeping all existing Sovereign clients up to speed.

Public Waiting Lists

Getting sick isn’t much fun. Being placed at the back of a long public waiting list is even less fun. Graham shares his experiences with navigating the line between health insurance and public health care.

This is not an insurance sell; just observations from my personal experience.

There has been plenty of talk leading up to the election about the Southern District Health Board and waiting lists, particularly in reference to those dealing with prostate cancer. The delay in treatment and assessment has led to a shortening of life for many of those concerned.

What can you do about it? And how do you manage that for you and your family?

Well, if you are in a critical condition, the New Zealand health system is excellent. If you look like you are going to die within the next week then you will be looked after. Also, for some congenital issues, the New Zealand health system is brilliant. As many of you know my son was born with a cleft lip and palate, he's now 23 and the public health system has been excellent during the multiple surgeries and ongoing dental care. However, many years ago, my mother was diagnosed with breast cancer and went on a waiting list—not so great from our health system. 

For my family, private health Insurance made no difference for my son and his surgery (his congenital birth conditions are not covered) but it saved my mother’s life. Private health insurance meant she didn’t need to rely on her position in the public waiting list, her treatment was paid for and we dodged some scary consequences.

The key to making sense of the New Zealand health system is learning to dance between those two extremes of having great public health support and being shoved to the back of a long waiting list.

Graham Goodisson is a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.