Did you know that around 1.4 million Kiwis have health insurance?* With a good public health system why would such a significant number of New Zealanders choose to pay for health insurance?

We are fortunate to have a good public health system IN New Zealand but it’s not without faults, and there are never any guarantees that you’ll get the care you need or in the timeframe that you need it. The public health system is well equipped to handle emergency situations but for anything else you may find yourself on a waiting list for treatment with no certainty around how long you’ll be waiting. Furthermore the public health system does not cover all treatments and costs so you may be limited with regards to the treatment you receive.

Health insurance allows you to access the treatment you need, when you need it, and in a private hospital of your choice.

If something happens to you and you aren’t able to access the treatment you need straightaway you may find yourself digging deep into your pockets to fund the treatment yourself. This can result in a very hefty bill when you add up all the appointments as well as the actual treatment itself. But you may feel that you have no choice as waiting, or going without, may put you in a very difficult predicament.

Health insurance takes away the worry of how you’d pay for treatment, giving you peace of mind and certainty about your future.

Some health insurers cover drugs that aren’t provided by the public health system, giving you more options at a time when you don’t want restrictions placed on your future. Here’s how it works – Medsafe is the Government agency responsible for registering drugs for safe use in New Zealand. Pharmac is responsible for selecting which of those drugs will be funded in the health system. There are many Medsafe registered drugs that Pharmac have determined will not be funded in the health system, but are funded by some health insurers.

With the right health insurance policy you can have more choice over your treatment.

Health insurance is an investment in your future and is worth considering for the above reasons and more. If you are interested in health insurance, or if you have questions about your current policy, start by talking to your financial adviser. If you don't have an adviser contact Lyn Bell. 

If you have to get your cheque book out here’s how much it’ll cost you…

How much will it cost you	(as at January 2010 incl GST)
Cardiac bypass (heart surgery)	$37,000 - $45,000
Angiogram (diagnostic test)	$3,600 - $4,400
Angioplasty – with 2 stents (heart surgery)	$17,000 - $20,000
Total hysterectomy (surgery)	$10,000 - $13,000
Prostate removal (cancer surgery)	$10,000 - $12,000
Radical mastectomy (breast cancer surgery)	$8,300 - $10,000
Total hip replacement (surgery)	$18,000 - $22,000
Hernia repair	$5,400 - $6,600

Life insurance is not a popular topic of conversation, because in doing so we are contemplating our eventual death. It’s not something anyone likes to dwell on for long, however it’s an important consideration in financial planning. So, how do you know if you should take out life insurance?

Life insurance should be considered when someone else is dependent on your financial contribution. In other words, if you weren’t around anymore, but your earnings are still needed, then you should consider having life insurance. If there is nobody financially dependent on you then there is no monetary shortfall to anybody else.

There are two possible exceptions to this generalisation however:

• Sometimes a lender wants insurance as extra lending security, and so a new homeowner might have to take out life cover to get the loan.
• Some people might have family medical history that makes it harder to get insurance later in life, so it may be worthwhile getting life insurance while young and healthy, before they actually have dependents.

So if you believe you need cover the next question is, how much?

The best starting point is a DIY “needs analysis”, and you don’t need special training to get started. 

Just pretend you aren’t here anymore, then have your partner work out what they need coming into the household starting next week. Establish the monthly living expenses that are required and then subtract what your partner will reliably be able to bring in (remembering that you aren’t here to help). Then decide how long you will need that regular amount coming in for – a limited time or until retirement for example.

Next think about what other expenses are required (lawyers and estate settlement, funeral expenses, etc)? What loans or liabilities need to be removed? Is there a need for an emergency fund to see the rest of the family through for a period? If so, how much? Is other capital needed for other purposes, such as children’s education, or your partner’s retirement fund? 

The process is really that easy. It isn’t morbid either – it’s quite analytical and very practical. It’s also an excellent way of making sure you talk about your estate planning.

Your partner does the same exercise next, and it may be that you both come up with different amounts of cover required. That is fine, you should each be working out what you need. At this point you may have come up with what probably seems to be a couple of large numbers. Don’t let that put you off – life insurance is an easy and cost-effective way to provide for your family. Once it’s in place you can rest assured that you have done the right thing for your family, and you only need to revisit it if your circumstances change.