Don’t compare apples to pears
Apr 13, 2022
People often start thinking about life and income insurance when they buy their first home.
When you buy insurance from your bank’s metaphorical fruit bowl, it’s worth noting what’s in the bowl to begin with. When it comes to insurance that protects your mortgage, life, or health, banks tend to have a single product in each category, which may or may not be the best fit for your situation – and one size does not fit all.
Anna-May Martin of Castle Trust Financial Planning says ‘You’ve heard about comparing apples with apples. And it’s also good to know when you’re trying to compare apples with pears’.
This means that they are not comparing apples with apples. They only have one apple to offer you, and it may not be very juicy.
Once you buy a home there’s no taking a break from your mortgage – come sickness or death, the mortgage needs to be paid. The bank wants to protect its risk as well – so when you take out a mortgage, that’s also the time the lender is likely to offer you insurance cover to protect that mortgage. Unfortunately, few bank staff can advise on which policies suit or how much a person needs.
Here’s the thing: there’s a whole orchard of coverage out there. A financial adviser knows exactly what is available to you and your totally unique situation, and they will help you to cherry-pick the coverage that fits best. There are a lot of moving parts to consider when sorting out insurance – your finances, values, dependents, and life goals, to name a few – and the experts know the benefits and limitations of the policies offered by a whole range of companies. In a nutshell they compare the marketplace for you, looking at product features, benefits and price and recommend the best product for you.
Life ebbs and flows, and it’s worth thinking of your insurances as dynamic, rather than set-and-forget strategies.
“We walk our customers through regular reviews of their insurance policies,” says Anna-May Martin, a Financial Adviser with Motueka’s Castle Trust Financial Planning.
“This is as simple as coming into the office every year or so and sitting down over a cuppa to discuss any changes to your situation or plans, so that we can make sure that the money you’re paying for those premiums is absolutely best spent.”
In the short term, it may seem more convenient to buy your insurance at the same place as you hold your mortgage, but as Anna-May points out, if disaster strikes and you are dealing with inconvenience on a vast, life-altering scale, it’s a huge relief to know that you talked to the experts to make the best, most-informed decision.
“One of the most humbling parts of our job is to swing into action when our clients need to call on their insurances,” Mel Riley, Client Support says. The Castle Trust team pride themselves on advocating fiercely for their customers, working hard to alleviate stress and getting the best results for them when life throws a curveball.
There is no charge for establishing your insurances through a financial adviser as they work through a commission-based model. It’s also worth noting that the Castle Trust team use comparison software to find the best product and price available – they are also impartial about which options it offers, as they are interested only in achieving the best result for their clients.
– By Elise Volwellier