December 15, 2009 at 1:27 pm
· Filed under ALL, How it works, Q&A
Posted by Ed
We received this question from Roxanne
I would love to go with Pinnacle Life but I have one concern. If they cover you till you’re 100 there is a 100% chance to have to pay you back the amount you’re covered for. I have put together a quick spreadsheet and having approx 40NZD and approx 8% per year interest I could not “save” even 300.000 NZD in 50 years while I would be insured for 420.000NZD… What am I missing here?! Thx
Answer
This is a great question because it goes to the very heart of how insurance works…
What you have not factored into your calculation is that your monthly payments increase slightly every year as you get older and as your risk of dying increases.
Furthermore, you need to remember that most people don’t continue with their policy till age 100. The purpose of life insurance is to financially protect those people that are dependent on you. By the time you’re 60 or 70, most people have paid off the mortgage and no longer have financial dependants… their children generally earn their own income. So they no longer need the insurance and they either reduce their cover or cancel their policy completely.
In this way, life insurance is similar to car insurance… you only need car insurance while you have a car. Once you sell your car you no longer need the insurance and you can cancel your policy and stop paying.
A further point to note is that if you die after only one year, your calculation shows you would only have paid around $480 and you would stand to collect $300,000. That is not going to happen if you try and insure your life through a savings account!
| Permalink |
December 11, 2009 at 12:41 pm
· Filed under ALL, Cost, Lighter side of life, Longevity
Posted by Steve
We all know Christmas can be a stressful time. Family obligations, financial pressures and excess consumption all lend themselves to an insurance claim. We thought we’d give you some insightful hints on how to deal with all this Santa stress.
Ms Clause
A happy Ms Clause makes for a stressfree Santa. Hints… don’t mention the word dry and turkey in the same sentence, do the dishes before you’re asked, don’t make her play cricket, and when she does:- don’t laugh at her inability to catch, bat or understand the purpose of the game. If this is all done right… it may even lead to a little Ho Ho Ho (keeping her wine glass full helps)
Chimney squats
So you’ve been squatting in front of the chimney for the last 12 hours trying to assemble the latest toy for the little elf. Your Chinese is much improved, but clearly not good enough to read a set of instructions. Your thigh muscles are burning, the vital piece seems to be missing, your fore-arm is aching with screw-driver overuse and now Ms Clause is now offering her advice (a bottle of wine will help interpret the Chinese)
In-law sprints
Just the thought of the in-laws gives you angina, and they’re always the first to arrive. So get your head down and sprint in the opposite direction. The longer the sprint, the better the chance of getting your heart rate up and lowering your stress levels. Be thankful for the food, the company and the fact that you only have to see them once a year. (To help, scull a glass of wine as their car enters the driveway)
Managing elves
For once, give them what they asked for… not what’s good for them. Educational toys suck. Make sure you have the batteries and earplugs (also helpful for in-law chatter). Sharing is NOT caring. (a full wine glass also helps your 5am start )
Christmas Carrols don’t rock
It all starts in November with the first Christmas advert.. then the cacophony of endless carols heard at prize-giving, retail shopping, radio stations, TV adverts, banner-ads and soon you’re dreaming for silent nights. Jingle bells don’t rock and Reindeers don’t have red noses or fly. (You need more than a glass of wine for George Michael’s last Christmas)
So if you don’t need the Santa stress, and to keep our claims down, stay at home and buy online.
| Permalink |
