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Life Insurance and Blended Families

Choosing a life insurance policy can be a big decision. There’s lots of things to consider on the journey from getting a life insurance quote to signing the dotted line – whether you have the right amount of cover for the right things, so your loved ones are protected if the worst was to happen. But what about insurance for other unexpected life events? Do you need income protection and mortgage insurance? What about medial cover and critical illness insurance?

If you ticked life insurance off your to-do list years ago, it could be time to review your cover. Whether you’re expecting a new baby, buying or selling property, or have blended two families, when our lives change, our insurance needs often change too. With extra dependents to care for, increased financial obligations or change of work situation, you might find there are a few gaps in your insurance cover.

Getting advice can certainly make things quicker and easier, but is seeking out advice always necessary – and what can you expect from a financial adviser? Here are some things to consider when choosing the best family life insurance and some of the benefits of getting some professional advice.

Who needs life insurance, anyway?

If your loved ones rely on you to support them – whether financially or otherwise – it’s important to think about taking out some type of life insurance. It’s easy to imagine why the family’s primary income earners might need cover – after all, they’re putting a roof over everyone’s heads and keeping food on the table.

But it’s not just the primary breadwinner who should consider life insurance. Stay-at-home parents may not be earning, but they’re certainly contributing to the household. Just think about who’d look after the family if they weren’t around. Perhaps the other working partner would need to take some unpaid leave or reduce their hours – or even look into paid childcare or home help options to run the household solo.

Even if you’re not quite ready for a mortgage or kids just yet, it’s worth considering life insurance if you’re working towards some financial goals. A policy with the right add-ons could prevent an illness or injury from derailing your plans if you could no longer earn an income. The payout could help you maintain your quality of life or you could invest towards your future, so an unexpected setback doesn’t spell disaster for your long-term goals.

At Cigna, we have two different term life insurance policy options: LifeOne, a simple, ready-made policy to support your family with a lump sum payment if you were to pass away, and Assurance Extra, a customisable policy which you can tailor to your family’s unique situation. We have a team of qualified Advisers spread across New Zealand whose job is to help New Zealanders like you with insurance advice.

How do you choose a life insurance policy?

Every life insurance company in New Zealand has their own range of policies, each their own features, and benefits. Some policies are designed to look after your family if you’re unable to work, or if you get seriously unwell. Others are there for if you were to pass away.

Even when comparing the same type of policy, each insurer will have their own unique terms and conditions. Sometimes the differences might be minor but other times it can make a big difference for you and your family. When researching your options and comparing different insurers and their policies it’s important to understand what each policy covers. Otherwise, you could be comparing apples with oranges.

If that sounds like something you’d like a bit of professional help with, that’s where a financial adviser can step in. To work as a Financial Adviser in New Zealand, Advisers need to register on the Financial Service Providers Register. It’s their job to know all the ins and outs of the policies they recommend, so they can sit you down, compare insurance policies which meet your needs, and answer any questions you might have.

This will save you time, as the Adviser narrows down your options for you, so you can focus on the types of policies that will be most suitable for your family’s unique needs and goals. An Adviser will help look into your family history, medical history, income and projected income before recommending the right level of cover and with premiums that still feel manageable.

What sort of cover is out there?

If your family’s key priority is making sure there’s financial support if you were to pass away, LifeOne life insurance is a really quick and simple option – you can even do it all online. You can choose a cover level to suit your needs (up to $1,000,000) which is paid out to your family if you pass away, with a portion paid out quickly to help cover funeral costs. You could receive an early payout if you’re diagnosed with a terminal illness.

But what if something happened that stopped you from working, or you developed a serious, non-terminal illness? If you’d like the peace of mind that comes from knowing your family would receive financial support if you became unable to work, you might want to consider adding critical illness to your life insurance policy which can cover you for conditions such as heart attack, cancer, strokes and some others to help protect what matters most.

Assurance Extra is a life insurance policy which you can tailor to your needs, with help from an Adviser. It pays out a lump sum if you pass away, but it also can include:

  • Trauma cover: sometimes called critical illness insurance, this add-on pays out a lump sum benefit if you’re diagnosed with one of 59 covered conditions, including Alzheimer’s disease, cancer, stroke, heart attack.
  • Mortgage repayment cover: this add-on helps cover the mortgage repayments or the rent if you’re unable to work due to an illness or injury.
  • Income cover: this add-on for income protection insurance pays a monthly benefit to financially support you if you can’t work due to an illness or injury. You can also choose to add on redundancy cover, so you’d receive monthly payments for up to six months if you’re made involuntarily redundant from your job.
  • Complete disablement cover: this add-on pays out a lump sum benefit if you become completely disabled as a result of an illness or an injury.
  • Premium cover: If you can’t work, the last thing you want to do with your insurance payout is to use it to pay your insurance premiums. Premium cover removes the need to pay your premiums while on claim with Cigna, so you can focus on your recovery.
  • Wellness advice
  • Mental health counselling
  • Budget advice
  • Legal advice
  • Career counselling

Plus Assurance Extra comes with a range of other benefits to help if life throws you a curveball such as:

Do you have a more complex personal or family situation?

Sound like a lot of options? Not sure which are right for your family or whether you should choose mortgage repayment insurance, income cover or complete disablement cover – or all three?

We understand that no two families or relationships are the same, so it makes sense that every family needs different insurance benefits and cover levels. There are many instances where a more tailored approach to a life insurance policy can benefit you and leave your love ones with the right level of cover.

If you have kids or family members who depend on you to be the primary breadwinner or caregiver, and a serious illness or disablement would leave you unable to cover your current living expenses, then Assurance Extra can provide peace of mind by insuring against those things.

Want to keep it simple or get help customising a policy to your needs? It’s up to you

If you and your family are sure you just want cover for if you were to pass away, and you want a simple insurance product that you can purchase online, check out our LifeOne product. But if you’d like to find out more about extra benefits such as for an illness or injury that prevents you from working, redundancy insurance, or a more serious sickness, it could be worth talking to an Adviser.

An Adviser can talk you through your options and make recommendations based on your family’s needs, to help you look after loved ones should something go unexpectedly wrong in your lifetime.

Not only can an Adviser help tailor a policy to meet your needs, many families find that talking to an expert can really help them figure out what their financial priorities actually are. This can give you the confidence you’ve thought everything through and set up the right cover to protect your family’s future.

Insurance brokers vs Cigna Advisers – what’s the difference?

So you’re ready to get advice: but who should you talk to? An insurance broker (also known as an Independent Financial Adviser (IFA) or Insurance Adviser) might run their own business or operate as part of a wider team based locally or nationally. In most cases, they will have relationships with several Insurance Companies so are able to recommend tailor-made solutions for you and your family from the diverse range of product options and benefits available in the New Zealand market.

Many brokers are also able to help you put in place cover to protect your assets (Fire & General) and to achieve other financial goals such as Home Loans and Investments. This can be achieved either directly through the Insurance Broker or via their strategic alliance partners.

Many brokers make their revenue from the commission they receive from the Insurance Company for selling you a policy, while others may charge you a fee for their services.

Cigna Advisers are employed by Cigna, meaning they only recommend products backed by Cigna. Cigna competitively remunerates them through their salary package for their work with New Zealand families. Because of this, you can be sure that any Cigna Adviser will know every the Cigna policy inside and out, giving you the confidence that your custom-built policy will fit both your family’s individual needs and your budget. They work with Kiwi families every day to help get cover in place, so they’re real experts in how Cigna’s policies can help your family set up a plan for the unexpected.

Ready to start the conversation?

We understand your family’s needs are unique and getting the right level of cover for your family is a big decision. Every day across Aotearoa, our team of Advisers help New Zealanders find the right insurance options for them. Contact us today to talk to Adviser or learn more about our life insurance options.