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New Zealand; a land of opportunity but not without risk.

No matter what background we have or what country we or our forebears come from, there is no doubt New Zealand offers opportunities to those prepared to work for them. This pioneering spirit in a modern world has become more often referred to as our entrepreneurial spirit…where grit and determination meets execution! We can spend time working for ‘the man', building our know-how and experience or we are already experienced business people from other places, and one day we think, ‘I could do this myself. Take my dream, start a business, (or start again), employ some help. I don't want an empire, I just want to work for myself and get a lifestyle out of it for me and my family.'

This attitude is so common that small to medium sized enterprises (SMEs) in New Zealand employing five or fewer people now number over 430,000, employing more than 560,000 people representing immeasurable worth to the national economy (GDP). But there's a threat lurking beneath these impressive statistics: research tells us that New Zealanders are underinsured compared with other countries, with only about a third of the investment other OECD nations put into protecting the livelihoods of the people producing this GDP. At GFS there is too often evidence that business owners, many of whom are the key person in the business, frequently lack some or all of the cover they need.

This is in part because many see insurance as expenditure rather than protecting their dream. One role of GFS is to show people than insurance is not a cost, but on the contrary a vital element of financial wellbeing. A second role is to provide products and services that facilitate that wellbeing.

The diagram shows all the parties at risk in ‘The Circle of Life'. The business is underpinned by its key people, who are subject to general life risks - accident or illness that could leave them temporarily or permanently unable to contribute to the business.

That financial impact flows on to the owner/s of the business (often also a key person), who is responsible for the debt, both visible and invisible. Some owners think they don't need business or key person cover because they don't see any outstanding debt - they wholly own the business and the business assets such as vehicles and so on.

However, that's just the visible debt. The cost of exiting is invisible - if you suddenly had to close the business, what would it cost you to pay all current utility bills, rates, holiday pay and other entitlements? What about your lease commitments too? Too often these issues can be overlooked.

Then there are the families; the people supported by the business. What does the owner's lifestyle cost? What about their staff's lifestyles? Who and what is dependent on the business, and what happens if that revenue stream drops or stops? But of course, ‘the circle of life' only completes because the business also is dependent on the very people needed to drive revenue.

The advice GFS offer their clients looks to deal with this value chain. Certainly, it is the responsibility of business owners and key people to seek advice to get the cover they need. But GFS bear equal responsibility, in that they must help to simplify this process and support their clients transfer of any financial liability they are uncomfortable with should a life risk event strike. Getting the insurance you need should not be complicated or expensive relative to the risks you face – Talk to GFS today about how they can help you.

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Insurance Tips - Avoiding the biggest mistakes Kiwis make while buying insurance

Written by Ajay Kumar on August 4th, 2015.      2 comments

Today I was very happy to see NZ Herald write an article on “…biggest life insurance mistakes Kiwis make”. This is because people are more likely to trust such advice coming from a reputed newspaper.

It talks about what Global Financial Services (GFS) has been asking customers for more than 16 years. I am providing 3 tips that I feel are most critical and will help you avoid the biggest mistakes - not just while buying life and personal risk insurance but also for maintaining it. 

Life insurance, Critical illness and trauma insurance, total and partial disability cover, health insurance or medical insurance and income protection insurance are some of the most popular types of personal risk insurance. Different companies have different products but the underlying principles remain the same.

Hence, irrespective of if you are buying insurance or if even if you bought years back - following are 3 tips you must keep in mind:

1. Ensure that the insurance cover is sufficient

Insufficient 13225076 cropped-743Personal risk & not just life insurance is very important to protect your family home and family from the mortgage in unforeseen circumstances. The insurance cover should be sufficient to cover your mortgage in addition to your family’s other requirements. For e.g. if your life insurance is of $200K but mortgage of $500K, it may not be sufficient in such circumstances.

2. Review your insurance policy every year

Couple Dreaming 33889825 cropped-944I can hear a clear echo of our voice when the NZ Herald article says that, "Your circumstances can change and insurance policies evolve". It repeats what GFS tells all its customers and even posted on its facebook page last month.
Adding to this, in my experience many times customers don't even realize that they may be eligible for a claim against their insurance policies, obviously other than life insurance. This is another important reason for a review.
We have assisted people who were not even our customers to get claims for events they never thought might be covered in their existing policies.

3. Look at terms of the policy and reputation for claims - not just price

Old couple 10190067 cropped-791Don't buy just on price - look at other terms and conditions, customer service and reputation at claim time.
Almost every month we come across families who had bought insurance from a friend many years back. 15 – 20 years later when they need a claim, they find that their friend stopped working as an insurance adviser many years back. You can read of such cases on our facebook page as well. GFS has assisted not only our insurance customers but also mortgage customers get their claim even if they took insurance from someone else.
Whenever you take insurance, think about who can help you at the time of claim - many years from now... not just the best deal you are getting today.

If it has been more than a year since you reviewed your life and personal risk insurance policy, click here to book an appointment.

Ajay Kumar
Director, Global Financial Services Ltd. (Auckland)


Udita Sood says ...
Thank You for Sharing useful insight on Insurance.
Saurabh Gupta says ...
Yes Udita, I also found this useful. I used to only think about keeping my insurance premium as low as possible. I never looked at these other aspects.


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