Please reach us at andrew@tidalfs.co.nz if you cannot find an answer to your question.
Business risk insurance includes categories Key Person Insurance, Shareholder Protection Insurance and Debt Protection Insurance.
Typically Business Risk cover will be used provide a company or its shareholders with financial support if a Key Person or shareholder (e.g. owner, director) is unable to work due to illness or injury, or passes away. This is achieved by structuring Life Insurance, Trauma Insurance, Total & Permanent Disability (TPD) cover and Business Income Protection to fit the financial risk exposure of the business.
Shareholder Protection refers to shareholders insuring each other for the market value of each others shareholding. This is so if a shareholder passes away or is totally and permanently disabled and unable to work again, the remaining shareholders are able to purchase the departing shareholders shares at an agreed and fair price using the proceed of the insurance policy. This ensures the remaining shareholders retain control and ownership of their business and the departing shareholder, or their estate, receives fair remuneration. The conditions around what triggers a buy-out for shareholder protection should be documented in a buy-sell agreement and discussed with a lawyer. Without shareholder protection insurance, the remaining shareholder(s) may be unable to afford to purchase the shares, and could therefore result in the shares being sold to an unknown party, or the estate retaining ownership and remaining eligible for a share of profits.
A Key Person is some one who is essential to the day to day operation of a business and/or who is responsible for a significant proportion of revenue. This can include directors, managers, heads of department, top sales people, those with specialist technical skills or those with essential qualifications. In many cases, if a company loses a Key Person there will be a financial loss to the company due to reduced revenue from lost sales or productivity, losing clients, or a general loss of management. At the same time the business may face increased costs as replacement employees are recruited and paid, or the cost of delivery rises. If the Key Person is responsible for a significant contribution to revenue, at what level of reduction will there be an impact to cash flow and shareholder profits?
Key Person insurance can provide a monthly Business Income Protection, or lump sum Life, Trauma (critical illness) or Total and Permanent Disability insurance. Each business is different so talk to Tidal about the right plan for your business.
Please reach us at andrew@tidalfs.co.nz if you cannot find an answer to your question.
Life Insurance pays a lump sum if you (the life assured) pass away or are diagnosed as terminally ill, with less than 12 months to live. Life Insurance provides peace of mind that if something were to happen your family will receive a significant lump sum to ensure financial security. Life insurance is typically used to repay all debt, cover funeral costs and provide funds to financially support the family to maintain a similar standard of living. The level of the sum assured will depend on your areas of risk, what you wish to include and duration of financial support so should be discussed with a Financial Adviser to ensure your Life insurance plan meets your objectives.
The age at which someone needs Life Insurance, and the level of the sum assured will depend entirely on the individual situation. There are no hard and fast rules and people in different situations will have entirely different requirements. That said, in general you should first consider Life Insurance when you live in a situation of financial dependency where you or someone else will be significantly financially impacted by a family member passing away. This can include home buyers with mortgages, families with children, and households where there is reliance on one persons income. Generally, as you get older your financially risk exposure reduces as mortgage debt reduces, children get older and incomes increase. There may come a an age when you no longer want, or need Life Insurance, but for some there is comfort in knowing a Life insurance policy remains in place and cash will be readily available.
Life Insurance is generally the most cost effective type of personal insurance when you compare the level of the sum assured against premium expense. This allows you to have high and meaningful sums assured that will provide long term financial security to your family if you pass away. Factors that influence the cost of Life insurance include age, gender and if you smoke. Other health factors such as BMI, blood pressure or pre-existing illness can also effect the cost of cover.
Trauma Insurance provides a lump sum cover if you are diagnosed with one of 50* serious medical conditions as specified in the insurer policy document. This covers a range of conditions with the most common cause of claims being cancer, heart conditions and stroke, with a wide range of other serious and/or degenerative illness included.
Trauma Insurance is a financial safety net for your household to cover the impact that a major illness will cause. Use the money to cover treatment expenses, lost income, other family expenses e.g. childcare, and to allow for you to afford for a spouse/partner to take time out from their work to help with care and support. The level of Trauma cover required will vary based on personal and household needs.
Trauma Insurance provides a single lump sum cover if you are diagnosed with one of 50* serious medical conditions (mostly illness) as specified in the insurer policy document e.g. cancer, heart attack, stroke etc. Income Protection provides an ongoing monthly payment if you are unable to work due to ANY form of illness or injury. Income Protection therefore covers more conditions, but will only pay a claim for as long as you are unable to work. Trauma will pay a lump sum once you meet the severity threshold for your condition, regardless of your ability to work.
The best solution is to have both types of policies working together. Trauma cover is best suited to insuring additional expenses e.g. medical treatment, and Income Protection for insuring regular expenses e.g. mortgage repayment and living costs.
Income Protection provides an ongoing monthly payment if you are unable to work due to ANY form of illness or injury. For many families, limited savings and high living and mortgage expenses mean that if there was a sudden and unexpected drop in household income, it would not take long until financial hardship is experienced. Income Protection covers this and ensure that if you can't work you can at least maintain your financial stability. For this reason Income Protection is an essential insurance policy for many New Zealanders.
The policy will continue to pay you each month until you are well enough to return to work, or the claim term ends. Income Protection can pay claims to Age 65 or Age 70 giving long term cover for major conditions, or can provide shorter term cover for 2 or 5 years.
You can insure up to 75% of your gross personal income. There are 4 main types of income protection policy available, with different structures suited to different situations.
As you can see, it is worth seeking specialist advice to select the right structure for your type of occupation and level of income.
It is almost always cost effective to insure for financial risks rather than self insuring. It can takes months or even years to build up savings and investments, and these are normally allocated for another purpose e.g. retirement, investment property, travel etc. Without insurance in place, if a major life changing event happens you may have to use these savings or sell assets to provide the funds needed to cover living expenses, or treatment and rehabilitation costs which could run into hundreds of thousands of dollars. Depending on the outcome, it may then not be feasible to build the savings back up, resulting in a reduction in overall financial security and lifestyle. Income protection insurance can provide a career's worth of income, it simply isnt feasible to save such a sum. Insurance is guaranteed from the day the policy is issued (subject to policy terms) so even if you have only been insured a few weeks or months, you can still claim the full sum assured and avoid using your personal savings or assets.
Please reach us at andrew@tidalfs.co.nz if you cannot find an answer to your question.
Health insurance provides you with access to private healthcare including private hospital surgery or medical treatment. The treatment is always completed by leading and highly experienced consultants and in the pleasant surroundings of a modern private medical facility.
This allows you to avoid the often long waiting times for treatment in the public system, and gives you a higher overall quality of care.
There are a range of options available with Health Insurance to suit personal preferences and budgets. Having an excess on your policy will provide a discount on premiums and is only payable if you make a claim. Excess options include $250, $500, $1000, $2000 or even $5000. Getting the balance between premium and excess is an important consideration.
A key point to remember is that the cost of premiums is substantially less than the cost of treating a major illness.
Pharmac is the government body that funds publicly available medication. For some serious illnesses, such as Cancer, there are specialist medications available that can be life extending for the patient, but due to the really high costs are not publicly funded by Pharmac. This can often result in people having to sell assets or crowd fund on go-fund-me to get the money to pay for medication.
By having non-Pharmac medication included in a health insurance policy you can be sure that you can access the medication you need for your treatment, without cost being a consideration. Not all policies are the same, so its worth seeking professional advice.
Please reach us at andrew@tidalfs.co.nz if you cannot find an answer to your question.
The key difference in agribusiness insurance policies is the way that income protection is calculated. Rather than being simply based on company gross profit, or personal income, the policies are structured to better reflect the circumstances of rural business. This allows farms to base cover on farm turnover, rather than profit, and will account for the value of share milking contracts. This allows you to obtain the cover you need to keep your farm or rural business running if you can't work.
Peak season booster is an option that allows you to nominate a specific 3 month period of the year in which you will receive a 30% increased claim payment. This is to align with the busiest periods on the farm such as lambing or harvest, where additional support will be needed if you lose a key person.
Please reach us at andrew@tidalfs.co.nz if you cannot find an answer to your question.
The most common benefits that many leading and progressive employers are providing include Health, Life, Permanent Disability and Income Protection insurance. The type and level of cover will differ between companies based on preferences and the size of the workforce. Automatic acceptance by the insurance companies means that medical underwriting is not required so policies are not subject to exclusions for pre-existing medical conditions.
Surveys have proven that a healthy well supported workforces are likely to perform better, take less sick leave, and result in better levels of retention. In competitive industries having benefits above and beyond a base salary is considered essential to attract and retain the right employees.
Please reach us at andrew@tidalfs.co.nz if you cannot find an answer to your question.
CPX is an agreed value form of ACC compensation. This allows you to set the level of compensation you will get if you have an accident claim, and by doing this, you set the level of your ACC levy. This gives certainty at claim, and certainty of costs.
Yes! You can reduce your ACC cover to a minimum level of $35K and this will also reduce your levy to a minimum level. However, you must remember that this is reducing your financial protection so special consideration and professional advice should be taken before making any changes. At Tidal we recommend replacing ACC with comprehensive Income Protection insurance.
Yes! It's not all about reducing ACC. If you are unable to obtain income protection due to your occupation, or medical history, you may want to consider fixing your ACC cover at a high level. This will give certainty of knowing you will receive enough compensation if you have an accident.
No. ACC is mandatory for all working people in New Zealand.
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