A perfect circle

Thursday, March 31st 2011, 9:32AM 2 Comments

by Darrin Franks

Simplicity, as we become more and more connected – online all the time – has become one of the buzzwords of our age. But what those of us working in insurance often find, as we seek to develop products and services that resonate with New Zealanders, is that simplicity is nearly impossible to come by. The industry does not deliver it, and consumers struggle to find it without our help. This lack of simplicity is one of several reasons that Kiwis are one of the most disengaged populations in the OECD, when it comes to insurance. The irony is that for most people, the fundamentals of life – and by extension what needs protecting – are very simple, as this diagram demonstrates: [caption id="" align="alignnone" width="497" caption="The Circle of Life"]

[/caption] It shows all the parties at risk in ‘The Circle of Life’. The business is underpinned by its key people, who are subject to general life risks – accident or illness that could leave them temporarily or permanently unable to contribute to the business. That financial impact flows on to the owner/s of the business (often also a key person), who is responsible for the debt, both visible and invisible. Then there are the families; the people supported by the business. What does the owner’s lifestyle cost? What about their staff’s lifestyles? Who and what is dependent on the business, and what happens if that revenue stream drops or stops? With good advice and guidance, these questions are easily answered and the right cover supplied. The onus is on insurers to put the power back in the hands of consumers, by ensuring everyone is furnished with the knowledge they need to make good financial decisions and streamlining the requisite processes. Simple, really.

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Comments from our readers

On 7 April 2011 at 1:26 am hgstern said:

Russell at the Chatswood Moneyblog hosts what may be the best Cavalcade of Risk yet, and your post is in it:

http://www.chatswood.co.nz/moneyblog/2011/04/cavalcade-of-risk-128th-edition.html

Please let your readers know.

On 12 May 2011 at 11:01 pm life insurance nz said:

Very reasonable article, we have risk associated at every step of life and we have to live and go through all the steps evolved in life.We should be insured for the unexpected turns of the life.