Life insurance

FAQs: What happens to my life insurance if my partner and I seperate?

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We take insurance policies out our partners to mitigate the financial effect on our lives if they die or become ill. If I am the life assured, that makes my partner the policy owner. My partner receives the sum money my life is assured for if I die, and vice versa.

“If they own my life insurance policy, does ownership change when we separate?”

Your separation may or not affect the ownership of the life insurance policy. If a couple separate and there are kids involved then often the insurance stays in place and the ownership remains as it was for the benefit of the kids. Essentially, if my ex-partner dies, I am still affected financially.

It can get a bit sticky when the separation is not amicable. You don’t control your life insurance policy, so if you and your partner separate they can choose whether or not they want to shift the ownership.

 

“How do I get ownership of the life insurance policy when it’s owned by my ex! I now want it as my health has changed since I took the policy out originally and I could now be uninsurable.”

The short answer is you can’t. You don't own or control the policy the policy owner controls it.  As above, they can shift ownership to you if they agree to that.

 

The solution? Always get professional advice before taking out a life insurance policy and make sure you understand the ins and outs of the policy ownership.

 

Graham 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

The "What If?" and "Would You Rather?" Game

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When we’re young, we all feel invincible. Life is pretty good. Most of us have some disposable income and live it up. But there comes a time when we all need to ask the “what if” questions, says Debra Halton.

 

Sitting across from a young couple who had just purchased a home, I got them talking playing the old “What if …?” and “Would you rather …?” games. What if one of them got seriously sick, would the healthy one rather continue working in order to pay the bills or to have the choice to be there for their sick partner. What if one of them died? Would they rather be able to take some time off work or would their finances be such that they’d need to rush back to work?

 

Discovering what people need and what they really want and raising some very real “what if” scenarios is my job. And it’s important. I know lovely people who never had that question asked of them before tragedy struck. For example, last year, a father of four young kids dropped dead suddenly. Overnight everything changed for his wife and children. There was a long silence on the end of the phone to the insurance company when the wife realised there was only $50,000 of life insurance coming to the family. She was left to grieve and then bear the burden of housing, clothing and feeding her kids single-handed.

 

Some say that Kiwis don't’ like to discuss two things—sex and money—so I can hear the audible sigh as I write this piece on insurance. For, although it’s not sex, it’s most definitely about money. And our reluctance to talk about insurance is even more pronounced when it comes to insuring our lives: If I stopped people on the street and asked about car insurance almost everyone would say a resounding “yes”, yet if I asked about protection for you and your family if something tragic should happen, only 40 per cent would nod their heads.

 

So, I know these “what if” questions are hard, but the “would you rather” game gives us an opportunity to reflect on what we value most and how we can protect them best. The hope with good insurance is that you’ll never need to use it. But if you did, the people who matter most in your life will want to thank you for having the courage to confront those tough “what if” questions.

 

If you’d like a chance to throw around some “what if” scenarios and review your personal insurance, let’s grab a coffee—my shout! Would you rather have it black or milky and foamy? Perhaps soy or even a hot choc?

 

Debra Halton 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.

When money is tight, should you drop insurance?

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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.