Affordability of products & services is at the forefront of most people’s minds right now. Inflation, a looming recession and people in general just having less money, are all contributors to this.

In times like this, we all need to be smart and efficient with our money. Selecting a health insurance plan which is both of these things should be paramount.

Despite this, I keep running into Life, Health & Mortgage insurance plans that are anything but efficient, sometimes even downright wasteful.

So, here’s 7 quick tips to make your health (& other) insurances affordable & efficient:

1. Simplicity

Look at your key vulnerabilities and include protection for these. Often, a simple plan which includes some Life, Health & Income Insurance will be enough. Complex plans with many separate or specific benefits often end up costing more and may not necessarily spread your protection.

The main personal insurers in NZ have Life, Health, Trauma, Income & Mortgage insurance policies. More specific policies exist such as household expenses, severe trauma & accidental death.

For most people, the ‘industry staple’ policies will provide strong & widespread cover, whilst being relatively easy to understand.

Also, claiming is often more difficult if you are trying to get lots of different benefits paid out simultaneously.

Curious how much Life Insurance you may need? Try our new calculator:

2. One Insurer

With most personal insurance policies there will be a fixed ‘policy fee’. If your plan has cover through multiple insurers, the amount of money spent on separate ‘policy fees’ will increase.

This is money that isn’t going towards your insurance but rather paying the admin fees of the insurers. There are multiple good insurers out there, such as Partners Life & AIA that offer Life, Health, Mortgage, Income & Trauma all under the same company.

It’s possible to have your full family and everyone’s different insurance benefits under a single policy. Below is an example of a fictional family with a single policy quoted through Partners Life:

This plan includes multiple different benefits for the parents i.e. Life, Trauma, Income & Health insurance, whilst including Health insurance for the two children.

Just because it’s all under one policy number doesn’t mean it can’t be flexible, and just look at how low that policy fee is in comparison to the total premium!

We help our clients decide which insurer is best for them.

3. Quit the Smoking/Vaping

Smoker rates for Life & Trauma Insurance are over double standard rates. Income, Mortgage & Health insurance is all more expensive as a smoker as well. If you’ve gone for 12 months or more as a non-smoker you can qualify for non-smoker rates.

4. Reduce Your Weight

If you’re a bit chunky (BMI over 30) then sometimes insurers will place loadings (an increase in price) on your insurance due to the increased health risks associated with being obese. This can be worsened if you also have blood pressure or cholesterol issues.

Do your best to improve these factors and the only thing getting fatter will be your wallet!

5. Build Your Savings

If you have a larger financial backstop, you can run a higher excess on Health insurance and a longer wait time on income/mortgage insurance. This all decreases the cost of your insurance.

This can be applied more generally to insurance as well. The more cash and resources you and your family have, the less financially vulnerable you will be to unforeseen health events and their implications. This means your need for insurance is generally less.

6. Benefit Conversion

Converting your current benefits to policies which only cover the more serious health issues is also an option. This can be a useful tip for those who are older and premiums have become unsustainably expensive due to age.

Rather than outright cancelling your cover, there are often options to convert your benefits into similar benefits that only cover more severe health issues:

Consult a qualified insurance broker before making these conversions so you are aware of any implications with your specific policy.

7. Reduce Your Levels of Cover

Put simply, if you’re having a hard time paying your insurances, another option could be to simply reduce your insured amounts. Having some cover is better than none.

Reducing the amount of cover usually works in a linear fashion i.e. if you half the amount of cover, the premium approximately halves.

Want a free review of your situation? Our friendly experts can help you out: