September is Life Insurance Awareness Month. And it’s something that Pinnacle Life feels passionate about. It’s a month where we want to raise awareness about life insurance, its importance, and why it’s so important to understand its place. Our aim for this month is to educate. We know that people find the life insurance industry complicated and overwhelming. So, if you have life insurance already and want to learn more, or you’re just starting out, we’re here to help you learn and answer those harder questions.
To get us started, we’ve looked at some of the most common questions people search for about life insurance, and we’re going to answer them. If you have any questions you want answered (no matter how wild or direct they are), please email or phone us - we want this month to be about education and transparency.
What is life insurance?
We’ll start with the basics because, honestly, as ‘basic’ as this question may be, it’s probably the most important (and it’s the most googled). Insurance is a contract agreement between individuals (you) and companies (like us) that provides financial protection against losses. Life Insurance puts financial protection on your life because while you can’t put a price on a life, you can plan ahead. Life Insurance is typically paid out when the insured person (you) dies or becomes terminally ill with less than 12 months expected to live. While the insurance can’t replace you, it provides your loved ones with the financial tools to pay for your funeral, cover the mortgage, put your kids through education, and more.
How much life insurance do I need?
This is a tricky question, and you should really seek financial advice. But think about what you want your insurance payout to cover. Would you like to pay the mortgage off - or would half be enough? Would you like to ensure your partner maintains the same income for a set number of years? Would it be for your kids? Think about what you want and how much you’d need to cover for it to happen to start you off.
Do I need life insurance if I have other types of insurance?
This really comes down to your personal situation and what your priorities are. If you want to provide financial support to your family after you pass away and protect their future, life insurance might be the right fit for you. This might be right for you if you have large or ongoing bills , such as mortgages, kids' tuition, utilities or even your funeral,. It allows your family or loved ones to process and grieve instead of pushing through ensuring financial security and reducing the need to take on excessive debts. Other insurance focus on different assets and precious things such as your car, contents, home, pets and more. They all serve different purposes, and understanding each purpose is key.
Can I get life insurance if I have a pre-existing condition?
It depends, but it’s always best to try. Different companies have different underwriting rules (meaning the calculated risk associated with taking you on as a client). Some conditions may mean the risk of taking you on as a client is too high for a company. Other companies might see the risk and allow you to either get insurance excluding that condition or ask you to pay an extra premium to include it in your policy. It’s always worth trying.
How do I choose a life insurance policy?
Base it on how the policy and the company, connects with you.
People often evaluate an insurance company based on its claims rate. But as an industry (and especially for our company), we are in the business of paying claims. The standard reason companies don't pay a claim is that someone hasn’t declared something (called nondisclosure).
It’s safe to say the basics of a life insurance policy are the same across most providers, especially within New Zealand. You’ll find that a lot of insurance companies are reinsured by the same group (this is the big company in the background). However, different companies may have slightly different benefits in their policy documents. The standard is usually your life cover paid out if you die or become terminally ill with 12 months or less to live. But some companies may add extra ‘benefits’ - things like if you were to die, an immediate amount would be paid to cover your funeral before your claim was assessed or non-insurance benefits like wearables. These usually come with a slightly higher premium.
In conclusion, Life Insurance Awareness Month is the perfect time to understand and appreciate the value of life insurance. At Pinnacle Life, we’re here to clarify any questions and guide you through your options. Reach out to us this month to ensure you have the right coverage to protect your loved ones’ future.
