Insurance can get confusing. Huge policy documents, insider lingo, fine print everywhere. It’s supposed to provide peace of mind, but can instead just play havoc with even the sharpest samples of grey matter.

So, here’s a 101 guide to understanding your personal insurance.

In New Zealand, there are four things a person can insure themselves for: 

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1. Life

Why? To repay debts, cover funeral costs and give your loved ones the financial freedom to properly grieve.

Who? This pays a lump sum to your estate or the person of your choosing.

2. Trauma

Why? Give yourself space to recover, whether or not you’re off work for a prolonged period of time.

Who? This pays a lump sum to you if you are diagnosed with a specific illness.

3. Income Protection

Why? Unfortunately the bills still come in if you’re unable to work due to injury or illness. This will pay a percentage of your income (or mortgage repayments) until you’re able to return to work.

Who? This pays you a monthly sum.

4. Health

Why? If you need non-acute surgery, you can skip the public queue and go straight to a private hospital.

Who? This pays the medical professionals that are looking after you.

Finally, it’s important to ensure that your cover is relevant to your life. Here are a few examples of life events that may impact the relevance of your cover. If any of these apply to you, give us a call!

• You have new additions to your family
• Your kids leave home
• You get married and/or divorced
• Your job changes
• Your salary changes
• You have had any health issues (more than just a GP visit)
• You have set up a new company or trust
• You have bought or sold a property

No investment decision should be taken based on the information in this blog alone.