Life insurance can seem like a complex topic, but at Pinnacle Life, we like to keep things simple. So, in an effort to make it simple, here are five key things you need to know about life insurance in New Zealand.
It’s a risk management tool
Life Insurance is your safety net, your financial backup plan. It’s designed to protect your loved ones financially if something unexpected happens to you. Think of it as a way to manage the risk of financial hardship for your family if you were no longer around to provide for them.
Understanding the players
In New Zealand, there are four primary players in the life insurance industry. Insurers (like us here at Pinnacle Life), intermediaries (such as insurance brokers), policyholders (that’s you!), and beneficiaries (the ones who receive the payout in the event of a claim). Knowing who does what can help you navigate the process more smoothly.
Compensation, not wealth creation
One common misconception about life insurance is that it adds monetary value to your life. In reality, life insurance doesn’t make you richer. Instead, it provides financial compensation to your beneficiaries (usually your loved ones) if you pass away or become unable to work due to illness or injury. It's about protecting what you already have, not creating new wealth.
Honesty is key
When applying for life insurance, honesty is crucial. It’s essential you tell us all relevant information truthfully and accurately on your application. Failing to do so could result in your policy being voided or any claims being denied. So, be transparent about your health, lifestyle, and any other factors that could affect your cover.
Communication is crucial
Once you have a life insurance policy in place, it’s important to ensure that someone you trust knows about it. This could be a family member, a close friend, or your legal advisor. Making sure that someone knows about your policy ensures that your beneficiaries can easily access the necessary information and file a claim.
Understanding these five key aspects of life insurance helps you with the basics of understanding life insurance so that you can make informed decisions and ensure that you and your loved ones are adequately protected. At Pinnacle Life, we’re here to make the process as straightforward and stress-free as possible, so you can have peace of mind knowing that your family’s financial future is secure.
