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Protecting Your Health

HealthProtecting Your Health

Happiness in life comes largely from three sources: relationships with friends and family, good health and having a clear purpose in life. Good health comes about through adequate housing, diet and medical care and statistics show that on average, those with more money have better health. With the increased pressures on the health system, health insurance plays a big role. According to figures recently released by the Health Funds Association of New Zealand, around 1.33 million New Zealanders are covered by health insurance. That’s around 30% of the population. It’s big business, with claims of around $1 billion a year. The best time to take out health insurance is when you are fit and healthy. Once you develop a medical condition, you may be faced with increased premiums or exclusions, just at the very time you are likely to need the cover. It is encouraging to see that younger people, in the age group of 25-30, are increasing their uptake of health insurance For a young person with no dependents and limited budget, a basic health insurance policy should rank high up the priority list when looking at insurance needs. Later in life, health insurance helps to avoid getting stuck in long hospital waiting lists for non-urgent surgery.

Health insurance is not cheap, but neither is medical care. The purpose of health insurance is to allow you to obtain a high standard of medical care without having to compromise your standard of living in paying for it. If you have substantial wealth, you can probably cover health costs without the need for insurance. Others should keep in mind that 1 in 2 people will suffer from cancer during their lives and that there are over one million hospital discharges a year in New Zealand. Don’t take good health for granted.

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The Unders and Overs of Insurance

insuranceThe Unders and Overs of Insurance

Insurance is one of those things that most people need but resent having to pay for. When money is tight, it is often insurance premiums that get cut from the budget. With an increasing amount of insurance being bought online or over the phone without advice there is a real danger that more and more people will be either over-insured or under-insured.

The value of insurance is not just the ability to make a claim, it is also the peace of mind that comes from knowing that your financial risk has been passed on to a third party. The difficulty comes in determining the optimum level of insurance cover whereby the risk you retain is acceptable and the premiums are affordable.

Start by looking at ‘what if’ scenarios to assess the financial impact of an unexpected event on yourself and on others who are dependent on you, taking into account long term effects such as your ability to prepare for retirement. Unexpected events could include the loss of physical assets such as your house or car, loss of life, or a serious accident or illness leading to additional costs, disabilities or loss of income. With each scenario is it necessary to determine the amount of money required to maintain the current and future standard of living of both yourself and of those who are dependent on you at an acceptable level. Find the cost of cover for these amounts, and put priorities on the risks that are most important to you. Keep working with alternative options of cover until you arrive at a point where you are comfortable with the level of risk you are accepting and the cost of cover. It is best to work with an insurance broker to help with this analysis and find an affordable solution.

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