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Colin’s May/June 2012 Newsletter
Four great ideas to improve your insurance cover and reduce your costs:
1 How to stop insurance premiums going through the roof:
This is probably the most common question I hear day to day talking with clients and business contacts. And it’s true, standard life cover gets dearer annually as we get older and underlying rates escalate.
We’ve heard all the justifications - claims costs from the earthquakes etc, but the reality is the true cost of insurance only becomes evident at claim time. Sadly many people pay premiums for years but may never get paid out.
For example, the average life expectancy is now around 80 years yet most people cancel their life cover before retirement due to unaffordable premiums – just when they need it to cover funeral and final costs. Basically, this is due to poor planning and advice.
The good news is; there are some things you can do to contain costs to ensure that premiums are affordable and money won’t be wasted: If you don’t already have some Level to age 80 cover, let me give you a quote and show you how much you’ll save over time.
2 The right type of life cover is critical:
Lump sum life cover often doesn’t get used for the purpose it is taken out for - debt protection, and ideally, cover should be reduced as debt is paid off. Why? Because, we hear many cases of families falling out over lump sum pay-outs, or money getting siphoned off for trips, cars and other windfall reasons instead of going to replace income lost by the death of a breadwinner and for the care/education of families.
We believe families (and businesses) need to be protected by allocating the correct amount and type of cover for each specific purpose – i.e. Replacement income with monthly benefit paid out over a fixed term to provide care for spouses and children. This type of cover also saves you money!
3 Income protection premiums can be affordable:
You have heard it said before; the most important asset you have is your ability to generate income. Go on - try taking a couple of month’s unpaid leave and see how it affects your budget. Incredibly, many Kiwis’ insure their assets/property before they insure their earning capacity. Ironically, there wouldn’t be much property to insure if we were unable to work and earn.
Yes, income Protection can be pricy, and some people struggle to get a payout. That’s because you must make sure you have the right type of cover and the right structure to match your budget. Let me show you how - You may be pleasantly surprised!
4 Most businesses are paying far more than they need to for ACC:
Private cover may be a more cost effective option!
Why is it important to get this right?
Approximately 1800 NZ businesses cease operation each year due to disablement of a business owner, and approximately 6 out of every 10 business owners are likely to become disabled due to an illness or accident before they turn 65, preventing them from working for at least a month. Of these, nearly a third will still be on claim 12 months later.
I offer a no-obligation review of the effectiveness of your current cover. There is no catch and no cost to you for this service except for a few minutes of your time. Call me today: 0275 327348.
Credit contracts/Home Mortgage tips:
Interest rates report – compliments of James Lockie
The Reserve Bank reviewed the OCR at the end of April and left it unchanged at 2.5%. The Governor’s comments were interesting. He said that inflation was not a threat (which is positive), and that the economy is recovering slowly. He is worried about the high dollar, particularly in light of falling commodity prices. This is a concern, as it makes it very hard on our income producing exporting sector. The good news for those with mortgages is that we are likely to have stable rates for the rest of this year and early next year as well.
Credit Reports – guard your financial integrity
Credit reports are becoming an increasingly important tool in determining whether a loan will be approved or declined. These reports are starting to show more credit information about a borrower. Credit scoring, which is where the credit provider works out the likely future performance of a particular borrower, is becoming increasingly important here. Credit scoring is well advanced overseas. All potential borrowers should now realise that their credit report is becoming a key document for lenders. It is important to keep it clean by repaying all your loans in a timely manner. If you have had any past issues, then it is important to tell your potential lender, as they will find out anyway. You may have sound reasons, such as sickness or divorce, to explain a particular issue.
How to pay your loan off faster and make substantial interest savings:
Sovereign has a fantastic mortgage product called a ‘Go Home Loan’. Unlike normal revolving credit facilities where you can end up never reducing principal, a Go Home Loan combines the best of both types of loan by utilising your deposits to reduce your balance and fee’s (you need just one account). Note: as your balance tracks down over time, your loan gets paid off faster saving you significant interest. You can also make extra payments at any time without fees. Talk to me before you talk to the bank and I will give you some money saving tips.
Vehicle finance tips – Spread depreciation, free up capital, and reduce tax by leasing:
Changing vehicles should an enjoyable experience, not a terrifying one, so before you expend time and effort trying to find the best deal and the most suitable vehicle for your needs, give me a call and tap into my extensive 40 plus years experience.
Tips and information to help your decision making process:
Methods of financing vehicles:
Lease Specials for May/June (45 mth/45K/Non Maintained Op Lease)
New Captiva CX V6 $499/LX V6 $549/L300 SWB 2.4 Van $419 per month
Colin’s thought of the month: 'Almost everything in life is easier to get into than out of'
59 Girven Rd Mt Maunganui Tel: 07 5474266 Fax: 07 5723590 Mob: 0275 327348 www.planwise.co.nz
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