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Income Protection Insurance Where Do I Get Advice?

Where do you find advice about Income Protection Insurance options?

Sorted.co.nz the Government site on personal financial matters would say that your "Financial Adviser" is a good source of information about investment advice, but it has little to say about Life Risk Insurance Advisers. They are those Advisers that advise on the financial effect of Life Risks like premature death, becoming disabled, meeting with a major health trauma etc. If you need advice about Income Protection, where do you turn? A Life Risk Insurance Adviser

Some myths and concerns have developed over time about Insurance Advisers, and I am going to deal with them in a series of short posts.

Concern #1
The Adviser was digging ditches last week and this week, insurance sales.

I suggest you ask your Insurance Consultant or Life Risk Adviser how long they have been in the business of life, disability and health insurance sales. Ask them what their background was before that. Ask them if they own their business, or if they are employed.

Many Insurance Advisers are self employed contractors to the owner(s) of the client base. This may mean that when they may split off from with the company they are with, they may have to pass on the relationship to another Adviser. When I set up Life Risk Limited, I bought back some of the relationships I'd sold to the company I was working with when I joined them. I bought out some of the relationships I've developed on that company's client base, and I left some of the relationships behind.

Sometimes I'll see clients I left behind, but they understand that the 20 year relationship they've had with that organisation is more important to the company than the relationship we developed in the 5 years I was looking after them. Not one of them has not accepted that their current Adviser company wants to keep them. That is a sign they are being well looked after I expect.

I've now set up my business so that I don't have to say goodbye to clients.

As part of my serice, my website www.LifeRisk.co.nz has an increasing number of common questions answered in articles, audio and video downloads. This is another way I am offering clients a helpful financial education.

As the Financial Advisers Bill becomes law, and people settle into life with KiwiSaver, some Advisers will begin to offer an easy to understand financial education at the workplace, and over the web. Why? Because we're in the business of advice, Life Risk Insurance Advise and KiwiSaver and Retirement Planning Advice.

Come on a journey of learning with me. I've been in the Life Risk advice business since 1998. That's why I started Life Risk Limited in 2006. Along the way, I'll help you with your Life Insurance and provide advice about KiwiSaver as well.

Neil Smith is the owner of Life Risk Limited, Life Risk Insurance and KiwiSaver Advisers.
A disclosure statement is available, upon request, and free of charge.

I've set up a poll on the topic of Income Protection. Please visit it here. The link takes you to another page at LinkedIn.com

How Safe Is Your Life Risk Insurance Provider?

How Safe Is Your Life Risk Insurance Provider Anyway?

This special report was put together in the wake of AIG in the America coming under the international spotlight. It is important to realise that AIG Life New Zealand (American International Assurance (NZ) is financially safe at the time of writing this report.

This special report is designed to give you a better understanding on how
life risk type policies work. The type of cover I am referring to is; death
cover,critical illness cover, disability income cover, and medical insurance
cover.

Question 1
I have an existing cover in place, will I loose this cover if the company
I am insured with goes out of business?

No is the short answer. In the past we've seen many insurance businesses
change ownership, and a your plan will have a guarantee of renewal of the
plan until a certain date. The minimum period of such contracts is 5 years,
but yours is likely to last longer than that. Cover remains in place as long as
you pay the premium within that guaranteed period.

Questions 2

If I keep paying an existing policy right now will I lose the premiums?

No. The only way you can 'lose' the benefit of the premiums is if you make the mistake of allowing your policy to lapse. You will then lose the value of your
policy being a 'guaranteed renewal' contract.

This would be a very dangerous thing to do as you may be unable to apply for
insurance later if you develop a health problem in the meantime or if your health
is not as good as when you took out the policy.

Your existing company would need to fail outright, and the New Zealand and
Australian market is very unlikely to let any insurance company go. They are

much more likely to take the policies over.

Question 3
What if I happen to be in the middle of a claim? Will I lose the
ability to continue on with that?

All of the life insurers in New Zealand I recommend my clients deal with use
reinsurance. This is insurance for the insurance company. Part of the cost of
your claim is paid by another company to you insurer, and then passed on to
you as a claim payment.

The companies I recommend are also established operators in Australia as well. They are big companies that have vast experience. They have solid credit ratings
and are easily sold to another insurance company.

Even AIG Life in New Zealand still has an A+ credit rating from Standard and Poors* as at Tuesday, 17th September, 2008. Its parent company has had some issues but its parent company is not directly funding claims in New Zealand. The contracts made in New Zealand are funded by insurance and reinsurance funds arranged in New Zealand. (*Standard and Poors A+ negative outlook).

Question 4
If another insurance company takes over my policy can they change
the terms I currently have?

NO - they are bound by the terms of the existing contract, including your current acceptance terms. Some contracts even have guaranteed premium rates for their
life insurance. Otherwise they can change the premiums if they wish to. When Colonial was bought by prudential and soon after by Sovereign which is owned by ASB Group, nearly all of the insurance contracts, bar a few Colonial contracts were kept the same, and premiums have not altered much.

If you have any questions about your Life Risk Insurance, or want to know about a Life Risk Limited Lifestyle Check, please call Neil Smith on 027 489 6141 today.

A disclosure statement is available, upon request and free of charge.