Is ACC enough?
We are all aware that if we break a leg, fall off a ladder or slip with the kitchen scissors, ACC will be there to pick up the tab at the medical centre. Whilst there might be a wait, we also know that any hospital treatment or surgery we need is also covered.
For those who earn an income there is also a safety net of an income if our injury causes us to be off work. This is set at 80% of our earnings subject to an income cap of $124,053 (and benefit of $99,242)
However, there continues to be a lot of myths and unknowns when it comes to ACC. So, did you know….
Your injury does not have to occur at the workplace for you to receive a benefit if it causes you to be off work. So that broken bone whilst trying to relive your youth on the rugby field at the weekend is still covered. In fact, even if you suffer your injury whilst you are overseas it may still be covered for treatment once you come home (depending on how long you were away).
If you die in an accident then ACC will also look after your dependents. The fatal entitlements ACC provide can be quite substantial, particularly where young families are involved. As an example:
Jack and Jill have two young children, Tom is 5 and Kat is 3. Jack earns $55,000. Unfortunately, Jack dies in an accident at home. Jill is entitled to a benefit of 60% of 80% of Jack’s salary each year until Kat is 18 (or 21 if she stays in full-time education). Kat and Tom are each entitled to 20% of 60% of $55,000, again until they are 18 (or 21). On that basis, by the time Kat is 18, the family will have received $642,400 in payments.
There are also funeral support payments and other grants available as well as help with childcare costs for under 14 year olds.
Whilst ACC offers huge financial support in times of crisis, it only covers half of the story because it only pays out for accidents and injuries.
In the twelve months from July 2015 to June 2016, ACC had approximately 1267 new fatal entitlement claims, and altogether had 2797 active fatal entitlement claims ongoing. It paid out $83,625,657.
(Source https://www.acc.co.nz/about-us/statistics/#injury-stats-nav)
Yet if we look at just one insurance company’s Life Cover claim stats, 61% of the female claims were related to cancer and only 6% was for accidents, whereas for males, 46% was for cancer and 5% accident related.
(Source: OnePath Life (NZ) Limited (OnePath) total claims paid in the 2015 financial year )
When we talk to families around the financial risk of one of them dying or not being able to work long term there is often an answer of “well I will downsize the house, I’ll work more hours, my parents will help fund the gap” and other solutions. Really? Do you really want to be thinking about selling and moving because you must financially when a loved one has died; do you really want your happily retired parents to now have to support you again? Maybe the increased work hours will not be available, maybe you will not be capable of increasing your workload, you’ve just become a single parent after all.
Our job is to have the hard conversations with you.
Insurance is all about covering the events where we know the financial impact would be major. Your inability to work, pay the mortgage, cover the bills, is one such event and it can just as easily happen through illness as it can injury. In fact, you are more likely to be off work for an extended period because of illness than as a result of an accident. In balance, we tend to recover from accidents quicker than we do from debilitating illnesses.
Checking that your insurance cover is still relevant for your circumstances is as important as having regular health checks – most of us are consistently bad with both. Why not contact us now to discuss what is right for you.