Insurance is one of those things that you don’t think you need until you do. Take Peter for example. He met a broker at a dinner party one evening and got talking about whether life insurance was really worth it. After all, Peter was only 42 and his wife and two kids were in a financially stable situation. Peter was the main income earner and his wife was working part time.
The broker asked Peter what would happen if he had an accident or became seriously sick and could no longer work. Who would pay the mortgage and cover the daily household expenses? He explained to Peter that a family’s finances can be compromised for at least a year, if not longer, in the event the main breadwinner becomes permanently disabled through injury or passes away unexpectedly.
The broker shared a story with Peter about a widow he had met once. She told him how her husband’s life insurance policy had saved the family from financial ruin. The interesting thing is, that when she and her husband had spoken to a broker some years earlier, they’d only been interested in mortgage cover and nothing else.
The broker talked with the couple about their situation and what insurance cover they would need for peace of mind if the worst were to happen. They agreed that having an additional $250,000 would be sufficient to see them through. When the husband tragically passed away, his wife was able to not only pay off the mortgage, but she also had a financial buffer to see her through an incredibly difficult time.
The story, the broker explained, is a perfect example of how insurance can mean the difference between being able to get your life back on track or enduring a prolonged period of financial hardship.
Although Peter had initially thought that the broker would be solely motivated to try and sell him insurance, he soon realised that he was in fact just trying to help. Intrigued, he asked the broker what it was like to do his job and what training he received to be able to provide advice.
The broker explained that it’s his job to help protect individuals, families and businesses from financial hardship when life throws a curve ball, and that he enjoyed providing products he knew would make a difference to the lives of his clients.
He went on to explain that all brokers in New Zealand are bound by the Financial Markets Conduct Act of 2013 and its amendments that came into force in March 2021. The Act requires brokers to at least annually, plan and complete learning activities designed to ensure that they maintain a high level of competence, knowledge, and skill in the advice that they provide. Brokers also need to have an up-to-date understanding of the regulatory framework.
After the conversation with the broker that evening, Peter’s perspective of what a broker does and what motivates them changed. He realised that like every job that interacts closely with clients, brokers aim to provide the best advice they can, using in-depth insurance knowledge to help protect their clients from financial risk and personal hardship should the unexpected happen.
Contact an NZbrokers member to discuss your insurance requirements and how they can help.