|Posted on 29 December, 2017 at 8:30||comments (0)|
Funeral Insurance is almost certainly the easiest of all insurances to obtain. It is pretty much if you want it you can get it. The only criteria that might prevent you from getting cover is if you fall outside the age entry criteria, but given it is available for ages 17-85 that is uncommon.
The reason it is so easy is because it is what is known in the indusry as a non underwrittten insurance type. That means there are no questions asked of you that need to be assessed by the insurance company prior to acceptance. Funeral Insurance applications do not require you to disclose any information about your current or previous health either at the time of application or any time after that.
Cover is guaranteed acceptance, mainly for the reason your health is not being assessed. So, nothing can prevent acceptance once you are happy with the premiums and cover offered. The benefit of funeral cover being guaranteed acceptance is also seen at claim time. Because there is really nothing to check, once the necessary proof of death has been submitted the claim can be paid. This is a big difference to life insurance where at claim time there is invariably a full assessment needed to make sure there were no non disclosures of health related issues at the time policy was applied for. So, funeral cover claims are typically paid immediately and without any fuss whatsoever.
Because of the no health declaration aspect to this cover it also makes the actual application process easier too. Virtually all insurers allow online applications that are quick and simple. Traditional life insurance applications often still require paperwork as insurers find it easier for customes to disclose information (exceptions exist where some life covers can be applied for online).
So, if you are thinking of buying funeral insurance it is very simple once you have decided the insurer and plan for you.
|Posted on 18 December, 2017 at 3:50||comments (1)|
As insurance advisors ourselves we are the first to admit that the options are almost endless when it comes to choosing your life insurance. There are many insurers and also many banks who offer cover.
To complicate it the premiums for life insurance across the different insurers are not hugely different as say when you compare car insurance premiums. The reason for this is that life insurance quotes are largely based on the average life expectancy of people in NZ which is easily available information and all insurers have access to the same information.
In saying that life insurance NZ premiums do vary to some extent. For example some insurers see themselves as a premium brand for product and service so they will always be more expensive than an insurer who has more emphasis on straightforward cover without the bells and whistles and maybe with more emphasis on such things as online applications.
Before you buy life insurance you can do yourself a big favour by comparing at least 3 different insurers. Do not limit yourself to one bank or insurer or just the same company you insure your house or car with. Shop around for sure. When we provide quotes for our customers we always make a point of providing at least 6-7 insurers to compare. At least that way you know you are going to be pretty comfortable in making an informed decision.
Paul Woollams, Insurance Helpline
|Posted on 16 December, 2017 at 3:50||comments (0)|
The ages of those who buy funeral insurance is surprisingly diverse. For a real life snap shot here are the ages and sexes of the 10 most recent policies we have arranged for our clients.
Male (70) and Female (67)
Female (65)and Male (67)
Male (53) and Female (46)
Male (55) and Female (52)
This is a one off snap shot so you can read in to it whatever you wish but interestingly 5 of the 10 were for individual females and the ages ranged from 48 to 70. A lot of people think funeral insurance is for those 65-70 plus but a lot of people younger than that also see benefits, one of which is that the fixed premiums are set based on your current age so the younger you are when buying funeral cover the lower the premiums indefinitely.
Realistically affordability may be easier if you are still working too which may assist the under 65's to buy. Those over 65 tend to look at the lower cover levels for affordability reasons.
|Posted on 16 December, 2017 at 3:50||comments (0)|
The main reason funeral insurance exists is that we do not know when we will pass away, therefore on the basis that it could be sooner, rather than later, we need to prepare for that unfortunate eventuality. That pretty much sums up insurance. It is there for the unexpected. But if you live a long life the cover is still there for you too.
Most people who buy funeral insurance do not have a large lump sum of money sitting aside that can be used for such purpose when the time comes.
Funeral plans mean you do not have to save the money for your funeral, and of course you can never save at a faster enough rate to counter passing earlier in life than expected. Once cover is in place you have some assurance that money is available for your funeral.
The misinformed information about funeral insurance is that it is a poor substitute for saving for your funeral and that it potentially costs more over time than the amount of cover. This assumes that funeral insurance is a savings scheme, it is not it is an funeral insurance policy. You take it to protect yourself whether it is needed in 3 years or 20, either way it is there when you need it. It is not like saving $10000 for a holiday and when you reach that target you go away. With your eventual funeral we do not know when that will be.
Lets hope your passing will way down the track, if so your claim will just be paid at that time, you do not lose your sum insured. The worst case scenario under some policies is that you may pay more in premiums than your cover amount if you live a long life, if that is the case I say, good I would rather have the long life!
If you do not have large lump sum of cash on ready stand-by or cannot save a large amount quickly then funeral insurance may be an option for you.
|Posted on 16 December, 2017 at 3:45||comments (0)|
So called experts say the number of people without Life Insurance is far too high in NZ and as a nation was are under-insured in this area. But in reality there are large chunks of the population who simply do not require life insurance anyway.
Children obviously, those younger adults without debt and / or dependants and at the other end of the scale, the much older people without debt or where their sons or daughters no longer need your financial assistance to survive after you you have passed. So, that is a fair chunk of the population anyway.
So, those with debt (we really mean a mortgage) or with dependants who would be seriously financially disadvantaged if you were no longer around make up the majority of people who need life insurance.
To us, the number one rule about how much life insurance you have is based on affordability. Sure, in a perfect world you might need, say $500000, but if that is a financial strain now then it is better to just take what you can commit to. Otherwise you will simply cancel it down the track anyway and have nothing. So, take what you can afford.
But, assuming you can afford the premiums try to get enough cover to clear your mortgage in full and then add an amount you feel would adequately financially assist your spouse or dependants for the foreseeable future following your passing. Ideally at least enough to provide a source of replacement income for 2-3 years to allow life to go on over that time.
If you have three children under 5 and a big mortgage then a significant size life insurance would be sensible but if your mortgage is now small and your kids are finishing high school then a whole different, potentially lower, amount of cover may be all that is needed.
Life cover can always be reduced too later, so as changes in your life occur your life insurance amount can be altered too to suit.
|Posted on 16 December, 2017 at 3:45||comments (0)|
With a typical life insurance policy you have two options regarding the ownership.
You can have yourself as both the insured person and the policy owner. This means when the time comes to claim the proceeds will be paid to, and distributed, as per your will / estate. This is ideal if you have specific requirements as to what you want to happen to the money. The money can be distributed in accordance with your will but be aware this could mean a delay in settlement while probate is obtained and other matters handled.
It is becoming more common that a different person is nominated as the policy owner. This means that person effectively owns the insurance, is responsible for payments, and they are also the person to whom the claim proceeds are paid to. This circumvents the will as the money bypasses it and is paid directly to the policy owner. Typically a policy owner will be a spouse, that is by far the most common, so they get the funds quicker and easier.
However, where you have a pollcy owner you also need to be aware that there can be complications in the event of separation as the owner would have to agree in writing to assigning the ownership to another person. We have had a number of instances where a policy owner is in fall out with the insured person and this cannot happen easily, effectively then the life insured loses their insurance. Also, if you had wanted your money to be used to help others, say your children, this cannot happen unless the policy owner carries out such instructions on your behalf as they are the only ones with any rights to the money.
|Posted on 15 December, 2017 at 23:30||comments (0)|
When the time comes for your funeral insurance claim payout the good news is that the money is paid in a simple cash lump sum to your nominated beneficiary. So, that person can use the money to meet what ever expenses are necessary with your funeral or related matters.
For some reason, there seems to be a common misconception that at claim time you have to present funeral home invoices, bills for flowers etc to the insurance company when you claim. This is just not the case, maybe that occurs overseas but in NZ whatever sum insured you select will just be paid to your beneficiary.
We also suggest to our clients that after the funeral cover NZ has been issued that they make sure their beneficiary is provided with a copy of the insurance policy so they know exactly who to contact when the time arises.
It is also worthwhile to have a quick chat at the same time between the two just so the beneficiary is aware of the intentions for the money. While in an ongoing illness type situation there is time for some planning to be discussed that may be possible in the event of an accident or sudden major event like a heart attack.
When determining your level of cover with funeral insurance you can either just take am amount that should be sufficient to pay for your actual funeral or you can take that amount and add to allow for maybe cover some sundry bills you may have at the same time like a credit card, HP, small balance of a loan etc. Some people who have family more far afield often add a bit extra to allow for some of the money being used to help with travel costs for those out of town, or out of country.