LIFE INSURANCE OPTIONS

Everyone knows that Life Insurance pays a lump sum when you die. Fewer people know that life cover also pays a claim on terminal illness. About half of all claims are for terminal illness. Most of us know what we mean by terminal illness but insurers definition is very specific. For insurers, terminal illness generally means that your specialist has given you the bad news, that you have less than 12 months to live. There are of course differences across companies but this is a good rule of thumb.

Does Life Cover have to be a lump sum?

Most people have their Life Insurance paid as a lump sum but it doesn't have to be. Let's say you don't trust your loved ones not to spend the money on wild parties, fast cars and slow cruises, you can opt to have it paid out monthly. You can select the number of years payment is made too depending on the product.

How high do Life Insurance the premiums go?

Premiums depend on a number of things, principally age, health and amount of cover. A policy will get more expensive over time just due to age and by retirement it can be prohibitively expensive. If you do worry about the increasing premiums then we should talk about level life policies. A level Life policy will remain the same premium over the life of the policy. You can level the policy to death, a guaranteed claim.

Another option to get control of premium is to freeze the premium. This will keep the premium the same but reduce the amount of cover annually to match the price.

What else does life insurance offer?

Some Life Insurance companies have built in benefits that can make the difference in the event of a claim. Some benefits that yo may see in a policy wording are:

• Grief Councelling: The opportunity to see a paid councellor
• Financial Advice: The opportunity to speak to a paid financial adviser
• Children cover: Small amounts paid in the event of a dependent childs death
• Repatriation: An amount to getting the insured back to New Zealand

As independent advisers we can balance all of these benefits and disadvantages of any individual policy. We don't play favourites.

A few answers to questions asked regularly:

Can I Get Exclusions on Life Cover: Generally, other than the built in exclusions, there is no option to remove more cover due to health. Activities can be excluded, for example pilot, hunting, and motor racing. If there is a health issue then the policy may be 'loaded', or made more expensive. This can include smoking status, weight, high cholesterol, etc. The loading will be either as a percentage or as an amount per $1000 insured per year.

Can I Insure The Life Of My Children: Unfortunately children can't have their lives insured however there is an option for Trauma and one company offer Terminal Illness Cover for children. There is a built in benefit in most life policies paying an age bracketed amount on the death of a dependent child.

Is Suicide Covered: Yes, unless otherwise stated a policy will cover suicide after 13 months.

Any more questions then get in touch here.

Cover Yours Ltd (FSP769531) and Marc Hamilton (FSP306046) are registered Financial Service Providers and you can search the register here. Marc Hamilton is a member of the FSCL Disputes Resolution Service. Cover Yours Ltd and Marc Hamilton’s disclosures can be found here or by emailing marc@coveryours.co.nz