Article: Our House = Our Home

Life Happens. Make Sure You Are Protected with Carie TownleyLife Happens. Make Sure You Are Protected with Carie Townley

Now more than ever with the high level of debt people are taking on, it’s important to make sure that you are also protected from the good, the bad and the ugly that can happen in life. A touchy subject, but I don’t want you to have money troubles and possibly lose your home if something bad was to happen. #NotOnMyWatch

Here are the main types of personal insurance that should be considered, it’s all about protecting your income - your mortgage and lifestyle.

1. Income protection (aka income replacement) - making sure bills can be paid if you’re unable to work due to serious injury or illness.
When a person is unable to work for an extended period of time, it can have a devastating impact on their financial position. Income protection pays up to 75% of your income to ensure you can make ends meet in the event you have to take unplanned time off work. Many income protection products can cover you if you are made redundant and offer the option of covering loan repayments.

2. Life insurance - making sure your family can pay the mortgage and everyday expenses if you weren’t around.
Life insurance pays a lump sum to your family if the income earner was to die or be diagnosed with a terminal illness.This money can be used to pay off the mortgage and maintain the family’s lifestyle.

3. Total and Permanent Disability (TPD) - making sure you are covered if you suffer an illness or injury that leaves you totally and permanently disabled.
This cover pays a lump sum, this money can be used to pay off the mortgage, for ongoing medical expenses or to make necessary modifications to the home.

4. Trauma Cover (aka Critical Illness) - making sure you are covered if you are diagnosed with a serious critical illness - like cancer, heart attack, stroke, kidney failure.
This cover pays a lump sum and this money can be used to pay for treatment, clear any debts and help make lifestyle changes you need to get better.

As with all things, everybody’s circumstances are different - but bottom line, insurance is super important no matter who you are. It’s your decision whether you take out these types of insurances, but I see it as my job to make sure you have the knowledge of what types of insurances are out there and who you should speak to, to make sure you have the right levels of cover, structured in the right way, for the right cost.
I recommend that my clients see an insurance adviser specialising in personal protection insurances for a cost effective solution that’s right for them.

Market update June 2018
Surprise, surprise, the official cash rate is still unchanged at 1.75% but have we entered into a watch and wait game? Cows and currency don’t usually go hand-in-hand, but they’re not as detached from each other as you might think. Check out the market update below.

Official Cash Rate (OCR) remains the same
For those who dislike change, you’ll be pleased to know the official cash rate is still steady at 1.75 per cent. However is tipped to rise to 1.9 per cent next December. The RBNZ previously predicted this rise would happen next June, so it’s a watch and wait game now. March 2020 still seems like a while away, but it’ll probably be here before we know it. That’s when a full rate increase is expected, with the benchmark rate predicted to be 2 per cent.

NZD dollar drop and our cow economy
Cows and currency don’t usually go hand-in-hand, but they’re not as detached from each other as you might think. Tim Kelleher, head of institutional foreign exchange sales at ASB Bank, told the NZ Herald that New Zealand is the “cow economy”. Meanwhile, Canada’s dollar is going strong due to the rising price of oil. We’re not usually too competitive with our Canadian friends, but it’s worthwhile knowing the NZ dollar dropped to 88.76 Canadian cents last month. But back to cows, being the cow economy may be problematic for us. With the outbreak of the cattle disease Mycoplasma bovis detected on dairy farms across the country, Kelleher points out the disease is bad news for both our dairy cows and currency.

The cost of cattle disease
Over 50 farms in the South Island have now been confirmed as being ‘actively infected’ with Mycoplasma bovis. Most of these dairy farms are in Canterbury and Southland. Cattle diseases can majorly impact the economy as well as our health (and of course the cows) with the potential for costs to skyrocket. But the government has a plan to eradicate the disease which will definitely see their budget take a blow of a whopping $886 million - ouch. Doing nothing will cost even more though – an estimated $1.5 billion in damages.

For a personal mortgage reduction analysis to identify the strategies that are in your best interest, contact Carie today on 0275 228 940, email .(JavaScript must be enabled to view this email address).

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