What happens if you are removed from the picture? Bank Accounts? Insurance? Kiwisaver? ACC? How do I know what to do?

Do you worry about what will happen if you are suddenly removed from the picture?  Remember my blog about making a will?  If you haven't read it them please read it prior to going through this one, here is the link.  https://granniesarahssolutions.blogspot.com/2023/04/do-you-have-will-do-we-need-one-what-if.html 

We often think about lots of things to protect ourselves, should something awful happen.  Remember all of these things are easier for your whanau to get if you have a will!  This whole blog is dependent on the fact you have a will, so please get one.

Enough about that, let's compare a few options:

ACC

• If you die at work, or on the sports ground or from some form of accident.  ACC will pay. 
• ACC will pay up to 80% of your wages for up to 5 years to your family.
• You are automatically paying ACC levies so there is no need for opting in or out.
• ACC premiums change according to the type of work you do and the danger involved.
• If you stop working and no longer pay ACC, it still covers you for accidents.
• ACC will also pay a sum for the price of your funeral.
• There is no expiry date on ACC, you can make a claim no matter how old you are provided it was an accident that hurt you.
• In order to get the above payouts, you must die! (although they do have some other forms of payment for permanent disabilities, medical care etc, but you must be hurt to get it)

Life Insurance

• If you die, Life Insurance will pay your family the specified amount (less any ACC that you are entitled to).  Someone, in their grief, needs to know who the insurance company is and be able to apply for the policy amount on your behalf.  
• You choose whether or not to pay Life Insurance.  
• If you stop paying all cover is lost, everything you have paid up to that point disappears.
• Life Insurance Premiums increase substantially with age.
• Life Insurance Policies have an expiry date, they do not go forever.  Be careful not to continue paying after they have expired.  It is difficult to get repayments back.
• In order to get the above payouts, you must die!  (prior to the expiry date)

Kiwisaver

• If you die, your Kiwisaver will pay your family the full balance.
• You choose how much to pay into your Kiwisaver.
• If you stop paying for whatever reason, it doesn't disappear, your balance remains, possibly grows.
• Kiwisaver contributions only increase as you increase them, voluntarily
• Kiwisaver has no expiry date, while it matures at 65 you can leave it in there to grow further
• In order to get the payouts, you can live to 65 or die or purchase your first home.

In short it is important to think about life insurance seriously.  They will only pay out the difference between the policy and anything paid by ACC (which to all intensive purposes is a life insurance policy).  So Life Insurance is something to cover you if you die young from an illness.  Many young people have multiple life insurance policies, they often get another one as part of buying their first home or getting a loan of any sort, or part of their job.  Remember that only one will pay out in the event of your death, you (your estate) cannot make multiple claims with different companies.

My take on all of this is this:  

We all have Kiwisaver, we all have ACC covering us for accidents.  Why not, take the money from Life Insurance Premiums and either put that into reducing your debt (which will help your whanau in the event of you being taken out of the picture) or add it to your Kiwisaver contributions.  That way you will be able to have the advantage of the money whether you live or you die.

I had someone tell me an interesting statement one day which was "The Life Insurance Company is taking a bet with you, they are betting you will live and you are betting you will die"  think about that for a moment.  If you live, they win, if you die, you win!  What a way to win!

Please be safe and well everyone, it is important to enjoy life while we can, we only get one.  I hope this has helped you a little.  Take the amount you pay in Life Insurance and put it into a mortgage calculator against your mortgage instead and see how much you could save, it is massive!

Have a fabulous day, I hope this helps you.  Please feel free to follow, like, comment, question and share my blog.  Thanks so much for reading.