Income Protection Financial Adviser
Navigating the personal insurance landscape can be confusing in this day and age, especially when it comes to Income Cover. With so many Income Cover options, understanding and selecting what is best for you can be overwhelming. Which is why enlisting the help of a Financial Adviser can be one of the best decisions you will ever make when it comes to insurance – especially if you need to claim.
Read more below on Income Cover and how a specialised and trusted Financial Adviser can be your biggest ally when applying for Income Cover.
What is Income Cover and Why Do I Need It?
Income Cover (sometimes called Mortgage Repayment Insurance) is a form of insurance that pays out regular payments in the event of an accident or illness that leaves you unable to continue working. Income Cover is designed to replace your income to ensure that you do not suffer financial hardship at an often stressful and uncertain time. For example, you may take out Income Cover if you are the main income earner, with the idea that the mortgage repayments on your family home and usual living expenses are able to be met should you be unable to work due to illness – this could mean that you do not have to sell the family home in the event of you requiring an extended period away from work due to a serious health condition.
What Are Wait Periods and Benefit Payment Periods?
When applying for Income Cover, you have the option to select how long you want to wait to receive a benefit from the insurer in the event of a claim – the longer the wait period, the cheaper the premium. When deciding on the wait period for your Income Cover, it is important to think about how long you could financially survive without a regular income and also consider your emergency savings that may be available in such an event.
A benefit payment period is the amount of time you will receive an income replacement from the insurer should you make a claim. Most insurers will offer anywhere from one year, all the way up until 70 years of age. When deciding on your benefit payment period, it is important to consider how long you would need a replacement income for in the event you unable to return to work due to a serious illness or accident. For some, they may select a two-year benefit period as that would provide them with enough time to adjust to their living situation or sell down assets to fund their ongoing lifestyle.
As the right combination of wait period and benefit payment period differs person to person, advice from an experienced Financial Adviser who regularly deals with not only Income Cover applications, but also Income Cover claims, can be advantageous.
Can I Still Get Income Cover if I Am Self-Employed?
Yes, you can still get Income Cover if you are self-employed. When you apply for Income Cover, you will need to nominate a monthly sum to be insured. Therefore, you will more than likely be asked to provide two years of financial records for your business to prove your income level. As there will be extra requirements when applying as a self-employed person, it can be useful to speak to a Financial Adviser who specialises in Income Cover for those who are self-employed.
Do I Still Need Income Cover If There is ACC?
It is important to remember that ACC only covers you in the event of an accident. By comparison, Income Cover provides a pay-out should you be unable to work due to either an accident or an illness.
Note that if you are self-employed and have ACC CoverPlus or CoverPlus Extra, there may be a way to combine your ACC cover and private insurances to maximise coverage and reduce your ACC levy – a Financial Adviser who specialises in ACC and insurances can help you work through your options.
Should I Get Income Cover Through a Financial Adviser?
Everyone’s situation and Income Cover requirements differ. For some, they may be wanting to consider differing wait and payment period combinations to reduce premium costs. A Financial Adviser will be able to present you with all your options and work through what may work best for your situation. A Financial Adviser will also be able to recommend whether an agreed value or indemnity value benefit is most suited to your situation. With so many variables to consider, the help and advice from a Financial Adviser can be invaluable.
Can I Trust a Financial Adviser?
In New Zealand, all Financial Advisers are regulated under the Financial Markets Conduct Act 2013 and must be registered on the Financial Service Providers Register (a public register maintained by the Companies Office). These regulations, along with the requirement to comply with a recently updated Code of Conduct, ensure that Financial Advisers in New Zealand are competent, knowledgeable, and meet the industry standards required when giving advice to clients.
Are All Financial Advisers the Same?
While all Financial Advisers in New Zealand are regulated, not all Financial Advisers are the same or have the same experience. For example, there are advisers who specialise in helping people secure mortgages, advisers who specialise in investment and KiwiSaver advice and those that specialise in insurance advice. When speaking with a Financial Adviser for the first time, the adviser should be able to tell you what type of advice is within the scope of service.
I Have Been Declined Cover – What Are My Options?
Income Cover is most commonly declined due to the health status of the applicant and being perceived as too risky from the point of view of the insurer. However, that does not mean that you cannot reapply in the future with the help of a Financial Adviser. The benefit of using a Financial Adviser to reapply for cover is that an experienced adviser will more than likely know which insurer would be open to considering your application and they will also be able to use their experience to ensure your application and the information provided is presented in the most effective way. This will give you the best chance at having your application accepted by the insurer.
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