We take our ability to work very much for granted, even though we often wish for the day when we don’t have to work. Getting to that day when we no longer have to work is going to depend on our ability to keep working, earning and saving however – and this is where income protection comes in.

Imagine if you couldn’t work because of illness and suddenly your income stops after just a few short weeks.  Many New Zealanders will be worrying within a month about where the money will come from for the mortgage, electricity, phone, rates, food, the list goes on.  You would quickly forget about the plans you had for holidays, entertainment, future lifestyle choices and and purchases.

There is no doubt that for the majority of people the ability to work and earn and ongoing income is their single biggest asset.

One of the problems we create for ourselves too is that the more we earn the more our lifestyle expectations increase...the more we spend on having a better life.

Maybe we think of ourselves as indestructible, but statistics tell us we are far more likely to have a disability lasting more than three months than we are to have our house burn down.  Yet we pretty much all insure our house...and cars...

Assessing the risk here is relatively simple. If we assume that as of today your income stops, it is simply a matter of working out if you can meet your commitments from a sickness benefit? There is the question of course as to whether you’d actually qualify for a sickness benefit – what if you are a double income family and only one income stopped because of sickness? Would it  matter which income stopped? If you are single would you have to move in with your parents or live in a boarding house with others that cannot afford to live independently?

That is the risk in its simplest terms.  If you want to reduce that risk you need to consider income protection insurance, which (in general terms) will provide you with an agreed amount or proportion of your lost income in the event of being unable to work due to illness or accident.

Once you decide to look into getting some income protection cover though, it gets complicated and there is absolutely no substitute for working with a professional adviser who understands the difference in types of contracts and how they would work at claim time.  No two products are exactly the same. And it is not as simple as “any Income Protection is going to suit you”.  Some will not suit you and your circumstances at all.

Some of the factors that will affect the choice of what income protection cover will work best for you will be things like:

• Whether you have a salary or are self-employed
• How much you have in savings, investments, leave entitlements
• If your income fluctuates from year to year
• If you get fringe benefits you rely upon (e.g. get a company car?)
• Do you have business expenses that continue while you are disabled
• Do you split your income for taxation purposes

Even with the help of a professional adviser who can work out which contract is most likely to be right for you and work at claim time, there is no guarantee that the cover you selected will be right forever more.  You have to review it regularly and make sure the cover you chose is still going to be the cover that works for you.

NIB Healthy Insurance

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Many people think ACC will pay if they get sick.

But ACC only pay for "accidental injury", not sickness or illness

and ACC definitely only pay up to a limit. This represents a huge risk to most New Zealanders as the historical statistics show that 5 out of 6 disabilities are caused by illness - not accidents.

One insurance company revealed in it's claims statistics that the average age of the worker making a claim on their income protection plan was 43 YEARS OLD - obviously many are younger and many much older. This "average" age though is when many have their largest personal financial commitments. So often, when people can least afford to take the risk, they most need protection.

If you do have an accident then ACC should provide something. Often however it is not as much as people hoped, because many self employed legitimately minimize their personal taxation position – and ACC work on you personal taxable income at claim time.

For the self-employed there are a few things to do that make good sense, and can help to avoid the problem entirely.

1. Get some professional advice to work out what ACC might provide, and which of the ACC products are the best choice in your situation.
2. Build up some cash reserves so you can self fund a month or two, and park the reserve outside of your business.
3. Consider some of the business insurance plans that can put money into your business, by covering temporary loss of a key person (like you!) or covering some of the overheads and expenses. They are a business expense too by the way...
4. Once you've covered the first 3 steps it makes sense to work out what shortfall there might be coming into your household from your business and then look at your personal insurance protection.

It is possible to set up your affairs so that money comes in if you are too ill to work in your own business, and with some good advice and good planning you can do it in a way that gets the best out of ACC, and your business, and your personal insurance plan.

For a limited time you can get Health Insurance Cover for Pre-Existing Conditions!

Southern Cross Health Society are the largest providers of health insurance in New Zealand.

They have a range of healthcare plans to suit different needs, budgets and to accommodate life stages.

We are pleased to be able to offer their products and to assist you deciding which may be suitable for your needs.

Southern Cross are currently making a very special offer.

Get cover for qualifying pre-existing conditions and save up to 20%*

Take out a new VIP policy before 30 September 2015 and get **:

• cover for qualifying pre-existing conditions after 3 years continuous membership, and
• a 10% special joining discount off your first year’s premium
• PLUS a possible 10% healthy lifestyle reward for the first two years.

Of course as always terms and conditions apply. Please contacts us by email at admin@bayfinancialpartners.co.nz or by phone on 07 578 3863 on 07 578 3863 for details.

• If you've investigated health insurance in the past and found they wouldn't cover you because of a pre-existing condition, or
• If you've just assumed that pre-existing medical conditions would prevent you from getting health insurance

Now is the time to get in touch with us. Ring Jonathan on 07 578 3863.

*Total premium discount based on standard publicly advertised rates for individuals (without healthy lifestyle reward applied to those rates) available through Southern Cross contracted Advisers as at 31 May 2015.

** This offer is subject to standard policy terms and is open only to new individual sales (transfers, ex-group members or upgrades to existing policies will not be eligible for this offer). Promotion terms and conditions apply - www.southerncross.co.nz/society/buying-health-insurance/discount-offer-terms-and-conditions. Full details of the policy benefits, maximums and any exclusions or other conditions that may apply can be found in the Terms and Conditions and relevant Schedule of Benefits

Russia’s largest bank is hoping more millennials will ‘Pika-choose’ their products after seizing on a way to capitalise on the gaming craze currently sweeping the world.

Sberbank is offering 50,000 rubles worth of insurance coverage, equivalent to NZ$1,125, for personal injury while playing Pokemon Go.

Players simply need to enter their details, including their Pokemon Go nickname, online to receive the cover.

There have already been reports of injuries to players who have been distracted or disorientated while playing the game, and Sberbank is hoping to gain from concerned players.

However, Sberbank life insurance CEO Maksim Chernin said there was also a higher game in play, rt.com reported.

“It is also important for us that the project will improve financial literacy, as the younger generation will be able to learn about insurance instruments while playing the game,” he said.

The bank said it planned to install special Pokestops modules that will lure Pokemon and players to its offices.