Most people don't prepare - take a look at these, my favourite income protection stats:
In the last five years about 18% of households have had a period of between 3 and 6 months when someone was unable to work
Most people thought they might get ACC, but, they were more than twice as likely (2.2 times more likely) to to be as a result of a serious illness than a serious accident. As many as one in five people think that ACC covers illness - it doesn't.
Two thirds thought they might be entitled to the jobseeker benefit, but about half of them were unaware that their partner's income would affect their eligibility
So with benefits not being very helpful, what about savings?
54% of people would be unable to maintain their spending rate just four weeks after their sick leave and annual leave had run out. 47% said they would be unable to pay their rent or their mortgage.
Apparently the average household (in 2015) needed $683 each week to cope with loss of income due to illness.
According to a study done by Horizon Research for the New Zealand Financial Services Council in 2015.
Southern Cross set up a team of specialists ten years ago because they believed that ACC was wrongly turning down legitimate claims by policyholders, leaving the Southern Cross to pay the cost of treating them. 'The insurer said it scrutinised around 200 cases a month where policyholders had had claims declined, usually older people whose injuries ACC concluded were wholly or substantially caused not by their accidents, but by underlying medical conditions. Usually age-related degenerative conditions.' Click here to read more from Rob Stock. The emphasis was added by me, that is a very large number of claims - something like 24,000 claims since the team was set up by Southern Cross.
You should read the whole article. There is a wealth of claims data on the number of claims that were subject to some sort of dispute, the number of decisions changed, and the amount of money that is at stake. $4.95 million in payments made by ACC to Southern Cross in the year to June 2016. More than that, is the extent of the process Southern Cross engages in.
Diana Clement has this article on income protection for the self-employed. It is good to see the need for considering the role of ACC and specifically the CoverPlus Extra option in planning income protection requirements for self employed. Link.
Stuff has this article on deaths and injuries from farm bikes. Headed, provocatively, "A New Zealand Death" written by Charlie Mitchell. It is worth a read. The reason why it caught my attention - apart from a natural interest in the morbid arising from working in life insurance - was that a friend's son has recently suffered terrible injuries in just such an accident. He has a broken arm and badly broken leg. The photos looked a lot like the ones in this article.
I will not jump to the conclusion that these deaths are preventable by a law change, or that quad bikes are inherently unsafe. 33 deaths were recorded from these causes in a period of about 10 years. Although many more injuries are likely to have occurred - the article hazards a guess at 20 times as many. It is worth contemplating how many equivalent injuries and deaths would occur by letting a child use an ordinary motorbike, or ride a horse, for that matter. Risks are real and they are also the stuff of life. I have let my kids do similarly dangerous things - parents cannot keep children's lives entirely risk free without taking something else away from their lives.
But it is also worth wondering how many could be prevented by requiring a roll cage be fitted to the four wheel versions of these vehicles. I hope someone is pondering the questions, because the list at the end of the article is heartbreaking.
What happens when both ACC and the District Health Board believe the other should be responsible for paying for your surgery?
You get no treatment until they sort it out, apparently. Which is ridiculous for us who do not have to suffer the consequences directly, it is far worse for the woman who is a victim of this situation, Amy Whiting.
Especially when you bear in mind that these are two separate funding agencies, but immediately above and below them the treatment value chain come together: ultimately the money is public, whichever funding agency you choose, and probably it would be the same surgeon in the same operating theatre that would do the job, irrespective of the payer. Although some very specific and painful costs are borne by Ms Whiting there are some general costs borne by us all: Ms Whiting should be getting on with her life, becoming a teacher, and being self-supporting. Instead, because of a failure to fund treatment, she must depend on a benefit. That is a cost to the rest of us.
What are the risks posed by the furniture around you? Seriously: falls from beds, chairs, ladders, and steps are rising because of an ageing population. Before you click on the link ask yourself this question: which type of fall accounts for more deaths? I bet you won't get it right. Link. This data comes from the United States, but I doubt that the trend would be much different here.
A link to ACC's page "Am I Covered?" an essential resource which it is worth being reminded of from time to time. Even if you do not provide advice on ACC coverage it is worthwhile knowing the boundaries of ACC coverage and being able to quickly communicate those to clients or those around you: whether you are a financial adviser or you are further back the value chain working on product design. Link.
NZ Herald published this article with one lady's story of how she was not employed in an asbestos-exposed environment and therefore her cover for pleural mesothelioma should be withheld.
Aucklander Deanna Trevarthen was diagnosed with asbestos cancer and her partner want an overhaul of ACC legislation as they face $200,000 of life-prolonging non-funded treatment. Under the current law anyone exposed to asbestos in their employment is automatically covered - but spouses and children who are exposed through that person are not.
New Zealand's largest, and probably most popular insurer is ACC of course. It may get a lot of complaints, but most voters want to keep it, and I am not sure how many other insurers would survive a popular vote. It turns out that ACC's surplus is a useful component in the New Zealand Government's return to surplus.
Bruce Millner of Yourlife Limited writes this interesting article about the pitfalls of income splitting with your spouse or partner. Millner outlines some of the complications and rules regarding IRD and ACC with regards to splitting income.