As we celebrate Christmas and put 2020 behind us we should all take a few moments to reflect on managing our affairs in 2021.

To help you in this task we have identified a number of perspectives that we want you to consider:

Survival Funds  – Establish a ‘Rainy Day Fund’

• You need to have the equivalent of 3 months of your income as savings in your ‘Rainy Day Fund’.
• You need to create a ‘do not touch’ rule that prevents it being used for holidays or cars and other discretionary purchases.

Protect Your Income – Your Most Important Asset

• Ask yourself what happens to you, if over the coming week you were advised by your medical experts that you can’t work for the next 3 months because of  illness.
• If you have no Survival Fund, then what do you do?
• You need to consider a Loss of Earnings Agreed Value insurance policy which will cover up to 75% of your taxable earnings.

Trauma / Crisis Management

• Trauma Insurance, next to medical insurance, is the most ‘claimed on’ product within the life insurance industry. Statistically 33% of New Zealanders will suffer a significant medical trauma, be it accident or sickness, between age 25 and age 65.
• We recommend that every income earner needs to cover a minimum 12 months’ household income plus two years rent or mortgage repayments.

Your Children’s Options For Their Future

• Kids’ Trauma Insurance with Guaranteed Future Insurability
• We recommend a sum insured of $100,000 per child for a cost of as little as $5.00 per month per child.
• At the age of 21 the child can then take over the policy.
• You are insuring your children’s insurability for a further $300,000 of cover without further medical or lifestyle underwriting.

Medical Care When You Need It

• Make sure you purchase the best available medical insurance program prior to the onset of medical decline
• Once you have a medical problem you are no longer insurable at standard rates, if at all.
• The most important part of a medical policy is identifying one that will pay non-Pharmac approved drugs and therapies.

Making Insurance Affordable In Your Later Years

• Convert insurance that you know you will need to retain in your later life to Level Premium
• Level Premium ensures that you will always be able to afford to pay the premiums on the ‘core’ long term portion of your insurance protection.

Retirement – Save Earlier And Budget More

• In the magazine Rethinking Retirement, four tips were:
• Prepare a budget and stick to it.
• Emergency funds are for actual unforeseen expenses not ones you can budget for.
• Maintain adequate insurance for the things you cannot afford to fund or lose.
• You always need a back-up plan i.e. part time work, renting out space in your office, garage or home. Home equity release loans etc.

We Can Help
If, after reflecting on the above,  you need to discuss any of these perspectives then please feel free to contact Kevin or Brian at any stage. Their contact details are as follows:

• Kevin – mobile 021 240 4540, email kevin@ksl.co.nz
• Brian – mobile 021 227 6035, email brian@ksl.co.nz

Otherwise we will contact you during 2021 as part of our annual review process.

Wishing you a Merry Christmas and a happy and safe festive season.