May 2022 Newsletter

Hi there,

Welcome to my May newsletter and farewell to the magnificent summer of 2021-2022. We certainly had a wonderful summer despite the obvious challenges.

Our income is one of our most important assets; this is our ability to generate funds to meet our financial commitments and afford our lifestyle choices. Sadly, only about 25% of working Kiwis see the value in income protection or mortgage insurance. Rightly, we insure our house, contents and car, but why not our income?

During my 25 years as an advisor, I have encountered a variety of reasons why people are reluctant to insure their income or mortgage.

“It won’t happen to me”  The reality is that it happens to many people during their working lives.

“I have ACC”  Yes, but ACC only covers accidents.

“We will be Ok”  The reality is that only a single figure percentage of the workforce has funds on hand to meet their financial commitments for more than three months should they need them.

“We can borrow against our house to give us living expenses over this period”  Yes, some people can, but that is becoming increasingly difficult as lending conditions and criteria change.

And the big one 

“Income/Mortgage Protection cover is too expensive.”

I ask those who don’t have some form of income or mortgage protection to consider this fictitious example:

Tony is a 43-year-old non-smoker. He is a residential builder, earning $80,000 per year and has Indemnity Income Protection cover of 75% of his PAYE income ($60,000, i.e. $5,000 per month), with a four week wait period payable for five years, and a waiver of premiums during his claim period. 

Out of the blue, Tony has a stroke. He is significantly incapacitated, unable to work, and will most likely not return to work for some time, if at all. Because Tony has income protection cover, he has a safety net in place for his family. 

The numbers at a glance:

  • Premiums paid over the five years preceding Tony’s stroke – $17,042
  • Payout over the five years that Tony will be off work – $382,256
  • The difference –Premiums paid equate to  4.45% of the Income Protection claim payments

In Tony’s case, the expense of the premiums vs the claim pay-out was well worth the investment.

It is worth taking a moment to consider the actual cost to you, your spouse, family, or business of losing your income vs the cost of investing in protection.

If I can persuade you to do one thing, it would be to give me a call to discuss your options. I can tailor-make a portfolio of cover that will meet your needs and provide you, your family or your business with that ever-important safety net.

All the very best,

Kevin.

The best compliment you can give me is to recommend me to your family & friends. Is there anyone you know who would benefit from my services & advice?

Kevin – Mobile (027) 204 4301 or E-Mail kevinh@apexgroup.co.nz

P.S. If you are in business, then you really do need to protect yourself with some form of insurance. Download my free resource on the 10 Reasons to have Insurance if you are in Business. Grab your copy here

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