According to a recent report by the Financial Services Council, New Zealand is one of the lowest countries to seek insurance. Out of 31 developed countries included in the study, New Zealand has the third lowest rate of insurance.
But would happen if suddenly you were no longer able to meet your financial commitments? This eventuality of not being able to pay your bills or keep up with the mortgage payments might not even be sudden, but instead,a gradual process, as is the case for most people.
Whilst accidents can and do happen, it is rare for someone to have a severe accident that suddenly prevents them from continuing to work. Instead, it is more likely that a person will experience progressively deteriorating health through their adult life. This period of gradually worsening health is known as the ‘disablement process’.
How Insurance Works with Disablement
As your health declines, you should think about the succession of health covers as you go through stages:
- Health Insurance – generally you would be working and receiving an income, and the purpose of this kind of cover means that you can get all of your hospital bills paid for in the event of a medical emergency. We can get sick or have an accident at any time, so this kind of insurance is vital to prevent hefty medical fees. Most people understand the purpose of this kind of insurance, how it works, and have got themselves covered.
- Income Protection – this would come later when you start to get too sick to work. The period between full health and becoming unable to work could be a rapid deterioration or a slower downward turn. In any event, income protection guarantees that your financial obligations can be upheld.
- Trauma Insurance – is a step up from the previous two types as it covers you in the event of a major health condition that could involve long stays in hospital, and you’d definitely not be able to return to your regular job and income after that. The cover is more extensive and costly than the previous two, but worth it for what it provides.
- Total Permanent Disablement – this is when you are medically unable to ever work again. There is no way that you could ever receive an income from employment after this, and this type of insurance is there to ensure you can still have your regular financial commitments met.
- Life Insurance – upon your death, family members or other beneficiaries receive some financial pay-out as a lump sum. Payment is guaranteed on your death so long as you have made all your required contributions.
If you’re interested in finding out more about which insurance is right for you, you can call us on our nationwide freephone number, 0800 141 889, or you could call 09 631 7771. Ease Insurance are based at Suite 6a, 114 St Georges Bay Road, Parnell, Auckland, 1052, and you can request quotes via email at firstname.lastname@example.org, or fill in the contact form on our website. Please leave your name, email address, contact number, and your message, and we’ll gladly get back to you.