SPEAKER_01: 0:10

Hello and welcome back to that Home Loan Hub. Today we are very level headed. How did you like that? It was very clever. Awesome. Thank you, Rebecca. I try. I try to bring my best when it comes to podcasts. I am joined by Rebecca, our insurance specialist. Rebecca, let's talk about life insurance and what it means to have it leveled.

SPEAKER_00: 0:37

Okay. So level life insurance is pretty much the price stays at that price for the life of the policy when you lock it in.

SPEAKER_01: 0:47

So hold on a second. If I'm 18 and I took out life insurance and it's only costing me$15 a week for 500k cover, when I'm 60, well, no, when I'm 55, it's still gonna cost me the same. Mm-hmm.

SPEAKER_00: 1:00

But depending on how long you lock it in for, there are different level terms. Uh-huh. But say uh some insurance companies offer it level to 100. Whoa. So you lock it in at 18, level to 100, you're still paying$15 at 99 years old.

SPEAKER_01: 1:15

Wow, that's amazing.

SPEAKER_00: 1:17

Yeah. So as the whole getting in early and locking it in early, the issue, of course, is people finding it hard enough to like find the money for insurance to begin with. Level life cover is more expensive up front because you are leveling it for the life of the policy. So it will cost more upfront, but in the long run, you will save thousands, like thousands of thousands of dollars. And uh with the insurers that do to level 100, once you say you you live to 100, um, you actually get to keep your policy without having to pay any more premiums until you die.

SPEAKER_01: 1:54

Wow. So if you're like 120 when you die.

SPEAKER_00: 1:57

Okay, 20 years of free cover.

SPEAKER_01: 1:59

That's incredible. Because I mean, people are living longer. Yeah, they are, absolutely. That's awesome. I mean, the the great grandchildren will probably be very happy. Not your immediate kids or your grandkids. No, no, not if it's to 120. Wow. Wow, that's awesome. Okay, so what was the other option? So it's leveled life. Yeah. And what's the other option?

SPEAKER_00: 2:19

Stepped. So stepped is every year your premium goes up because of age and CPI. So CPI consumer price index. So depending on what that was that year, there's a percentage that your policy will go up. The benefit will go up, but the premium will go up. But what we focus on is the age portion because you can have level age life cover and still have the CPI go up and pay a high premium if you want your benefit amount to go up. But when it's a combination of every year your premium going up because of age and CPI, the increases can get quite expensive. So having the level age locked in early means it won't go up every year like stepped.

SPEAKER_01: 3:02

Okay. All right. That's um that's an incredible news because I don't think many New Zealanders are aware of this option.

SPEAKER_00: 3:11

No, it's not something that's widely out there. And I think a lot of uh, especially when they're younger, a lot of people when they're taking our basic cover, they just do the basic cover. They don't look into it any further. If they don't go to an advisor, they do an online option. They're not looking at the level options because they don't know that that is an option. Uh, I mean, look, even all the way up into your 40s, early 50s, you can still lock in a certain amount of cover and it will still save in the long run. Because even if your debt is going down, there's funeral expenses if you don't have the savings. There's things like that where even if you don't lock in all of your life cover early, you can lock in a portion that you will need. You know down the track, like you said in another one, we all die. Um so funeral expenses are going to be a thing one day, right? Um, so locking in even enough for funeral expenses for the life of the policy, because eventually if your debt goes down, your life cover will eventually decrease. You won't need those levels of cover. But having that funeral expenses at the end is what you need.

SPEAKER_01: 4:15

Yeah, and I was just about to say, right? Because you can break it down. You you like if you're taking uh out 500k life cover, you could do 250k leveled and 250k stepped. Absolutely. And that way you are diversifying your premium, so it's not fully expensive. Yeah, exactly.

SPEAKER_00: 4:34

As one hit. And then that 250 stepped is the one that you would slowly decrease as your debt goes down. And you'd keep that level locked in.

SPEAKER_01: 4:41

Yeah, exactly. Guys, this is not a financial advice. So don't go out there trying to get a level life cover just because we said so. You know, definitely speak to an advisor because we can show you and we can project different um repayments. Like if you were 50 and you took this cover, or if you were 18 and you took out this cover, you know, what could be different repayments and stuff. So please reach out to us. We would love to help you. And um don't miss out our webinar because I think at the webinar we will expand on this a little bit as well, and we'll show you what it's like when you when you have life insurance versus life insurance that's leveled. And there are other things that you can build in into your life insurance as well, depends on the provider, like trauma covers and all sorts of different things. So there's so much out there about insurance, and I feel like it's a bit of an unknown beast that people are scared because they're like, I don't want to face that beast. It's scary, it's uh confronting, I'd rather not go into that forest.

SPEAKER_00: 5:41

Yeah, absolutely. Yeah, they don't want to face it. And even if they do want to face it and get some sort of insurance, it's just overwhelming for them, right? Like it the like you said, the amount of stuff out there, the amount of options out there, you start looking into it. And if I wasn't into this industry, I'd probably stop. But I'd be like, it's too hard. I don't want to look at it, I don't want to have to deal with it because what do you do?

SPEAKER_01: 6:05

You know, um, there was an interesting article um this week that I've read about building bricks, right? And our life consists of different components. And this this article was written by a lawyer and it was mainly around the the legal side of things, like, oh, you know, look at your wall, what sort of wall you're building, you know, what sort of bricks it got, like wills, relationship uh agreement, if you're in a new relationship, does it have enduring power of attorney? Do you have, you know, this reviewed or that reviewed? And then every year you sit down and you look at these things. And that got me thinking, like that wall should be built of other bricks as well. So apart from having a legal component on your brick, I think it should also have like the insurance component, you know, and you look at your bricks and you see, is this brick still relevant to you? Has this brick got any holes in it that you should probably get rid of? So um I think when you look at those things holistically and have you know annual reviews. Sorry guys, the dog is barking. The dog seems to be a very uh common theme lately in our podcast. Um, if you'd like to meet my dog, go on to my Instagram pages. I think I do have some pictures of that cute little thing. Um cool. So what I was saying is that about the bricks, you know, and with insurance is the same thing. Like you should be reviewing that every couple of every year or couple of years and seeing, do any of those bricks still have a purpose? Maybe you need to be getting rid of that brick. Maybe you should replace that brick with something else.

SPEAKER_00: 7:36

Absolutely. Life changes so quickly, so often. So something you took out even a couple of years ago might not be relevant even a year later, right? You just don't know when something anything having like you said before, and another one, like having a child changes everything. Um separation, unfortunately, changes everything. Getting married changes everything. And I think people, first of all, they're going through something. Like if they're getting married, you know, they're super busy, they don't really think about what it could affect with insurance or anything like that. Like obviously that's not their focus. It's not like your first thought when you get married, right? You're not gonna be thinking, Oh, I wonder what that does to my insurance. Um, but just otherwise there'll be questions raised by the other party why you're why you're looking into life. Let's just top up your cover now. Um so just bearing in mind any major life events can completely change any of your bricks, as you said, like anything. But bearing in mind insurance is a big one for any major life events.

SPEAKER_01: 8:40

Exactly. Because you know, you never know when that big um tornado comes and hits the wall and everything comes crumbling down, right? And it's the strongest bricks that will survive that will uh help you to rebuild. Perfect. Right? You're really onto it. Yeah, I love my analogies, I love um finding something that we can all relate to because as I say, it is a big beast. We don't want to, you know, face it, we're scared. But having someone with us holding our hand, having a torch shining at that beast, and actually you realize that beast is not as big, the best is not as scary. And we're here to hold your hand and to show you what it's like. Absolutely. Awesome. Well, thank you so much, Rebecca. That's been fantastic to have you um and talk about leveled insurance. And for those that are interested to hear more, um, head over to our podcast. Uh, sorry. What is it? Webinar. There was a test to you. Head over to our webinar and our YouTube channel and would love to share more knowledge with you. Thank you.