November 2016

Creating, Managing
Protecting Your Wealth


November 2016

In this edition we look at how some insurance companies are helping clients affected by earthquakes, the case for health and trauma insurance, and the link between our company name, Mt Lyford and mountaineering.

Premium Holidays

Life insurance companies pay millions of dollars every year to policy owners when someone has suffered an accident or illness or has died.  In my work I see how helpful this money is to families.  I’m pleased to see that several insurance companies: AIA, Asteron, Fidelity Life, PartnersLife and NIB have all announced that they will pay the insurance premiums for three months to policy owners if they have been financially disadvantaged because of the recent earthquakes.  If you have been affected financially because of the earthquakes I recommend you apply for the premium holiday.  Please phone or email us and we’ll send you a simple form to complete.

Two weeks ago I wrote a somewhat long message about the importance of having life, trauma, income protection and health insurance.  I referred to four articles featured in the DominionPost throughout October about people who could not get the life-saving health treatment they needed because they couldn’t afford the cost of the medication.  Had they had insurance with the right benefits their stories wouldn’t be in the newspaper and they would be getting on with their treatment programmes. 

In New Zealand many of us seem to believe that our benevolent Government will help us financially from our cradles to our graves.  This is ironic.  While we are generally independent and don’t want to be mollycoddled most of us are also optimists which is dangerous when it comes to protecting ourselves and our families.

We are optimistic that even though many of us only save 3% of our incomes into Kiwisaver and our employer contributes 2% (after tax) we will have enough money to live off in retirement without altering our life style.  Really?  New Zealand superannuation pays an after tax income of $30,000 p.a. to a couple in retirement whereas the average household income is $85,000 p.a. (before tax) and people say it is difficult to make ends meet.  If $85,000 a year is difficult how will they manage on $30,000 a year?  Some argue that the mortgage will be paid off, the children will have left home and the house could be downsized.  Indeed, this may be so but many do not want to downsize their family home and move from the community they have lived in for decades.  When they do move to a smaller home they might want to spend so much on improvements that they don’t have very much surplus capital for income generation.  When we are retired we have all day to find ways to spend our money and that’s when we need health insurance more than ever but the premiums are huge.  I recommend retired people take larger excesses to alleviate that problem.  Living expenses generally remain high even after you have retired.

My job as a financial adviser is to provide advice to ensure you are saving as much as you can afford to (not that you want to, or ‘feel comfortable with’) and to have the appropriate insurance in place to ensure that if you or a family member suffers a serious illness or accident you will not need to plunder your retirement savings to cover medical costs – assuming that you have sufficient savings and have access to them.  While Kiwisaver may pay out for compassionate reasons I wouldn’t count on you being able to access your funds to pay for anti-cancer treatment for a child. 

The more than 8,000 earthquakes (good heavens) that have been shaking New Zealand since the 7.8 magnitude quake on the 14th November may have caused some to consider reviewing their personal insurance programmes.  We’re here to help.  Have a look at the insurance tab on the Lyfords website and refer to the four stories in the newspaper that I discussed under the section 'Should you have Health and Trauma Insurance?'.

Two supportive insurance companies:  Both Fidelity Life and Asteron have advised that they will pay the premiums (waive them) for three months for clients who have been financially affected by the earthquakes.  You can have a premium holiday and your cover will remain in force.  Isn’t that lovely?  It is a kind gesture.  If you have suffered financially let me know and we’ll ask for the support.


Financial advice and mountaineering have similar requirements

Mt Lyford?  Sound familiar? We re-named our business in 2005.  We wanted to give our business a mountain name/theme for several reasons.  Richard and I went on our first date after we’d built a snow cave in 1983 as part of a rock climbing/mountaineering course.  We have always loved the environment. 

Research: You get a better result if you do some research before starting your plan.  Financial research is very expensive.  We pay thousands of dollars a year for research on investment and insurance products.  In addition we travel to meet with product providers and do due diligence which is why we were in Melbourne until midnight on Sunday 13 November when we literally stepped into an earthquake and why we visited Austin, Texas in September this year.

Review: You need to constantly review the direction you are heading in. 

Working as a team: reaching decisions together usually results in a better outcome. 

Advice: Respect those with more experience.  That’s obvious. 

It can be scary; sometimes remaining invested and climbing mountains is scary. We want to turn back (cash up) but Ed Hillary said the most challenging part of his ascent to Mt Everest was ‘the Chimney’.  This is called the Hillary step.  Once you have passed this point, Hillary said, it was a fairly easy walk to the summit.

Mt Lyford is a beautiful remote area and over the last month has become somewhat famous.  Bell birds sing.  The days in summer will sometimes soar into the 40s.  They are usually in the 30s with little wind.  In the winter the snow is beautiful and sparkles on the trees when we walk in the bush.  My family and I enjoyed staying at Mt Lyford for ten years but when we found we were travelling to all sorts of other places but not Mt Lyford we made the rational decision to sell.  That was less than a year ago and I’m very pleased we did.  Sadly, as a holiday destination I think it will have fallen in popularity.  It’s only assessable by emergency vehicles at the moment.

Lyford Financial Services
Investment, Insurance, Retirement Advice & UK Pension Transfers

174 Hutt Road, Petone, Lower Hutt 5012
T: 04 471 0662     W:  &
Alison Renfrew FSP35961 and Richard Renfrew FSP35821 are authorised financial advisers (AFA) and registered to give financial services advice including investments. They are directors of Lyford Financial Services Ltd and Lyford Investment Management Ltd trading as LYFORDS. The information in this newsletter is given in good faith and has been prepared from published information and other sources believed to be reliable, accurate and complete at the time of preparation but its accuracy and completeness is not guaranteed. Information and any analysis, opinions or views contained herein reflect a judgment at the date of publication and are subject to change without notice. To the extent that any such information, analysis, opinions or views constitute advice, they do not take into account any person's particular financial situation or goals and, accordingly, does not constitute personalised advice under the Financial Advisers Act 2008, nor does it constitute advice of a legal, tax, accounting or other nature to any persons.
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