With the prospect of an increase in unemployment as a result of the COVID-19 outbreak, you may be wondering how insurance can protect you from loss of income.

So, can you insure against the loss of a job? The answer is broadly yes, but there are caveats to keep in mind.

Redundancy cover

For anyone with a mortgage or other substantial financial commitments, the prospect of being made redundant can be unsettling to say the least. If that happens and you have redundancy cover in place, you’re likely to be entitled to receive a monthly sum for a set period of time.

Redundancy cover is often an add-on to other personal risk protection and pays out a similar amount to income protection, after a short stand-down and for a more limited period – usually a maximum of six months.

As always, it’s important to understand the fine print, and what your redundancy insurance policy does and does not cover. There may also be tight terms and conditions that have to be met to make a claim, so it’s important to get advice – we’re here to help.

However, if you’re considering taking out redundancy cover to protect you from the loss of your job in the foreseeable future, keep in mind that COVID19-related redundancy may now be excluded, or redundancy cover might not be available from all providers. Generally speaking, insurance is designed to protect you against the risks you cannot see coming, rather than those that are existing and widely known.

What about income protection?

The latest wave of uncertainty has seen many New Zealanders enquire about income or mortgage protection insurance. While these are powerful protection tools, keep in mind that they only pay out if you’re off work due to serious illness or injuries – not for redundancy, self-isolation or business interruption reasons.

As Insurance Ombudsman Karen Stevens recently pointed out, it’s important that you understand what you are and are not covered for. So please don’t hesitate to get in contact with us: we can help you take stock of what protection you have in place, and assess whether your insurance needs have changed.

We’re one phone call away

Like to discuss your options? We’re here to help you feel a bit less nervous about the future. Whether it’s redundancy cover or something else, we can talk to you about how insurance can provide a safety net for you and your family.

In the wake of the nationwide lockdown, a growing number of New Zealanders have found themselves out of the workforce and dealing with sudden job loss. While redundancy is not easy for anyone in any situation, here are some proactive steps you can take to address it and get back on your feet faster.

Take a good look at your income

Is everything that can be coming in, actually coming in? Sorted’s editor Tom Hartmann recommends gathering any incomings you’re due as the first step. Check your final pay, looking for any severance or holiday payments you’ve earned over time. Assess your emergency funds, and see what government assistance options you may be entitled to.

As a last resort, consider withdrawing part of your KiwiSaver funds for significant financial hardship. Keep in mind that this withdrawal is at the discretion of the fund trustee or supervisor, and they will require you to provide extensive evidence that the financial hardship you’re experiencing is significant.

Also, when money is tight, every little bit helps, but early KiwiSaver withdrawals will have an impact on your long-term retirement goals, so it’s crucial to factor in the pros and cons carefully.

Reduce your expenses as much as possible

Wise budgeting becomes all-the-more important when your cashflow has taken a hit. Think about your ongoing financial commitments (like your mortgage repayments or insurance premiums) as well as your everyday costs (e.g. your electricity bills).

Again, proactivity is important. Contact your lender, insurer and electricity provider to discuss the most appropriate way forward. They may be able to meet you halfway for a while, granting you extra time to get your finances and work life back on track.

Also, please don’t hesitate to get in touch with us: we can help you understand your options and, hopefully, get through this rough patch.

Be open to new opportunities

As Hartmann said, a good question to ask yourself is, “If I could work for any company or organisation and use my talents, which would it be?”

Don’t let negativity weigh you down. It’s important to think of this period as a ‘bump in the road’ and move forward. Try to be open to any new opportunities that come your way, whether it’s in your industry or a completely different one (just tweak your application to highlight the aspects of your current experience that are most easily transferable to the new sector).

On this note, Careers.govt.nz is worth a visit. This government website has plenty of helpful resources to explore new career ideas, including insights on what skills are in demand and how to gain valuable work experience.

Upskill yourself

Growing your talents is important for long-term career success, and even more so when facing increasing competition for jobs.

Recently, Trademe has published a useful guide to levelling up. It all starts with identifying the areas you want to improve and creating an upskilling plan accordingly. Trademe recommends setting SMART goals: Specific, Measurable, Achievable, Relevant, and Timely.

Then, there are several ways to grow professionally, including:

• Online courses – Openpoly NZ and General Assembly offer great distant-learning options, and a Google search will reveal countless more (including free and paid-for online classes).
• Evening classes
• Volunteering.

According to recruiters, employers are also looking for certain ‘soft skills’, like teamwork, cultural awareness, and adaptability – so make sure these are part of your skillset too.

Handling redundancy in your next job interview

Ready to meet your prospective employer? You may be wondering how to respond to redundancy-related questions.

As this insightful article from Trademe underlines, here in New Zealand ‘redundancy’ doesn’t mean that your performance was poor. It just means that your position was no longer necessary and unfortunately, despite wage subsidies and other assistance options, a number of businesses had to make employees redundant during Covid-19 due to lack of work.

Surely, your next employer will be aware of the circumstances that led you there, but even if they ask you about your redundancy, it’s important to show that you drew positives from this negative experience: you’ll demonstrate that you have resilience.

Feel it’s time to set up your own business?

Some New Zealanders have taken advantage of this period of unprecedented disruption to accelerate their business dreams.

Whether you’re considering becoming a contractor or a full-time entrepreneur, there’s a lot to think about. Once again, you’ll find some interesting information on Careers.govt.nz, which has a page entirely focused on the key things to know about working for yourself. And of course, Business.govt.nz features a wealth of templates, visual guides and tips to get you started.

Protecting your future income

Your ability to earn an income is one of your most important assets, and something worth protecting. Certain insurance types are designed to protect your income from life’s unexpected events, like serious illness, disability, or worse. The most appropriate cover depends on your situation.

Like to learn more? Please get in touch. As insurance advisers, we can help you explore your options and get a plan in place to secure your financial future.

A certain ‘she’ll be right’ attitude to life is inherent in our Kiwi culture, which we love. But while that’s great for the good times, it’s important to have a solid game plan for the not so good times that is tailored to your needs.

When it comes to looking for insurance or reviewing your existing cover, there are a few steps you can take to assess what you need. Having a clear idea of your priorities – what and who you need to protect – will help you determine the type and level of cover you need.

What’s important?

We’re all at different stages of life and have different priorities. Young families starting out often have different insurance needs than a retired couple. Individuals in their 30’s often have different needs and concerns than those in their 50s. It boils down to a question of risk. If something unforeseen happened, what would you need to protect the life you have built? It’s not always easy to determine, which is where we come in. We can help you think through your priorities to determine the type and level of cover you need.

What’s your budget?

Once you’re clear on your ‘protection-priorities’, it’s important to set your budget and what you are comfortable spending on insurance premiums. Use that figure as a ‘price ceiling’, and work within it. Getting the right protection in place is important; but so is affordability. Again, that’s where we come in, and can help you assess the right balance of affordability and protection for your needs.

Ask for help

There is a plethora of insurance options available – for all sorts of needs. It’s essential to get the right fit for your unique circumstances and to regularly review your policies to make sure your protection keeps in step with changes in your life – big and small. That’s part of our job – to help you assess the options and to give your insurance a regular ‘health-check’.

As always, if you have any questions or if we can help in anyway, we welcome you to get in touch.