Johny Winstone Interview -

Me (Speaker 0)
00:00
Today, we're gonna be talking the sexy and exciting topic of insurance. Now don't switch this off just because we're gonna be talking about insurance because we've got Johnny Winstone

Me (Speaker 0)
00:09
in to tell us all of the things we want to know to learn more about this exciting space, mate. A man that I believe has been in the industry for over a decade now. Coming up to it. Yeah. Yeah. What drew you to the insurance industry originally? Well, mate, it was actually, with a bit of family encouragement. So my wife's father,

You
00:26
has been in the industry for close to forty years now. His father, his grandfather were also in the space. Wow. And I was at a bit of a crossroads about ten years ago, and,

You
00:36
I was looking at sort of two fields to get into. One was actually to look at going into supermarkets, and then the other was going into insurance.

You
00:42
And so I went out and ghosted him for a couple of days. He was able to show me his process, what he does, how he interacts with people, and it just started to resonate with me. And

You
00:52
the thing that I was looking for out of my career was to be able to provide value to people on an ongoing basis, and I truly see that our personal insurance offering is a way that we can achieve that, great way of meeting people, and, you know, an amazing way to build a business and lifestyle off the back of it. Yeah. Nice. So fast forward to today then, you know, ten years of doing this, how many how many clients have you got? You're a very busy man. Yeah. Look. The each day is pretty hectic, but, we wouldn't change anything about that.

You
01:19
So we're managing a client base of about 6,000 people now. Yeah. So some of that's come through acquisition, and then a lot have come through my own network, individual clients that I've brought on, but always looking to grow into the future. And now I'm getting a big kick out of seeing other advisers join me on the journey and seeing them start to build their client bases. So each day it grows and gets more exciting. What's changed from ten years ago in the insurance space to now? Like, what would I'm I'd imagine Heaps has, but what are the sort of main things that you've seen in that time? In the industry? Yeah.

You
01:50
Look. I think we're starting to see this real influx of robo advice,

You
01:54
come in, which is online provided advice for clients going in, signing up to policies online.

You
02:00
Look. I think it's great for exposure in the industry, but I don't necessarily think that clients are getting a true understanding of what's available and how they should structure their own personal insurance.

You
02:11
We're seeing a lot of these clients that we happen to stumble across

You
02:15
might only have a singular benefit in place, but they think that it caters to all of their risk needs, and that's not the case. So through education, we bring them up to speed, sort of show them what's available, and go through that process and put them in a better position.

Me (Speaker 0)
02:28
So through some of the robo advice, etcetera, they're potentially signing up for things that they don't actually understand

Me (Speaker 0)
02:34
or think they've got cover that they may not actually have? Correct. And I think, like, we're pretty conditioned,

You
02:39
we're getting better in New Zealand anyway, of

You
02:41
having some exposure to life insurance, but people are taking out a life insurance policy and thinking that's all they need. Mhmm. But they're not then going the step further to think about major illnesses and losing their income if they were to be out of work for a period of time. So without that education piece, they're doing what they feel is the right thing to do, but but they're sort of missing a piece to the puzzle.

Me (Speaker 0)
03:02
Well, any insights, mate, to to stick to your craft for a decade? Like, a lot of people struggle these days to do one, two, even three years would be, like, a long time to stay somewhere. Sure. But I'd imagine that from

Me (Speaker 0)
03:14
once you, you know, get through those first couple of years, then you're into your rhythm, and then it's probably the same thing just about every day, every week, every month, every year. And would I be right? Well, yes and no. Like, there there's a like, I enjoy a lot of things about what I do for work, and, fundamentally,

You
03:32
the big thing is people. Right? Like, I get a lot of, value out of meeting people, meet some really inspiring,

You
03:39
characters along the way, which, like, I take a lot from.

You
03:42
Yeah. Probably more recently,

You
03:44
the challenge has been or the challenge and the opportunity has set in seeing the business grow and the involvement of now managing a team

You
03:52
and all that comes with that.

You
03:54
But, yeah, each day seems to be different, but

You
03:57
working with those clients, building those relationships, and now sort of years into it, starting to support them as claimed is starting to arise for various health conditions or minor events and just being there for them and actually being a voice that they can

You
04:11
consult with, that they might not be able to with some of their own family even.

You
04:15
They might not be able to get all of their advice from their doctor. So we do turn into a bit of a counselor, and we really respect and value that position that we hold with clients at particularly at that point in their lives. Because I I imagine a lot of people probably just look at insurance or the industry and think, oh, you're just selling people insurance. But that's just literally the start. Right? And there's ongoing advice, making sure it's fit for purpose

Me (Speaker 0)
04:37
and also

You
04:38
helping them if they need to actually use it? Look. I personally run quite a pragmatic approach to people's levels of cover that need to go into place. You know, I think a lot of people can quite often build in nice to haves in the values that are getting created, but in turn, that's gonna increase the premiums.

You
04:54
Yeah. So by running a more sort of staged approach to people's insurance,

You
04:59
we put in place what's required now with a a twelve to twenty four month lens on it, but we stay in regular communication and start updating

You
05:06
as their life dictates it. And that might be increases depending if their family's growing, if they're taking on more debt, but it might equally be decreases as things are starting to improve in value in their background, whether it's KiwiSaver balances, the property values,

You
05:21
mortgages getting reduced, kids are now getting older.

You
05:24
There are always a lot of variables that are constantly shifting, and it we don't wanna fall into a trap of going, hey. Look. We're thinking about having kids in three years' time. Let's consider that in part of the life insurance conversation now

You
05:36
because you take out more cover than that's what's required. And it might not be three years. It might be five years. So why pay the additional premium throughout that period of time? Just build a relationship with your adviser and sort of actually,

You
05:49
you know, be open to having that review because

You
05:52
it's not always about us coming out to sell you more insurance. That's not the aim of the game. We just wanna make sure it's reflecting your position on an ongoing basis. Yeah. Nice. And that's actually sustainable. Because I guess the worst thing is that people will then get rid of their insurance because they don't, you know, feel like they they need it, and then they've got no cover. Yeah. Or people just don't engage with us for reviews, not so much with our clients, and then they start getting a bit disgruntled that they've just got this outgoing, and they don't understand what it's for. Yeah. And so we find through the review process, if you keep the conversation refreshed, people understand it, they get it, they see the value in it, and they're quite happy investing that premium on a monthly basis to know that they have that good solid plan b.

You
06:33
So when you got involved in the industry in year one, did you see yourself doing a decade and and and carrying on from there? Yeah. I did. I absolutely saw where it is my career. Yes. And I was exceptionally fortunate to have my father in law's guidance on the way through, and I'm very grateful

You
06:49
for him early on in particular. Yeah. In fact, he said he didn't want me early on, so he kicked me to one of the corporate insurers, which was the best thing I could have done at the time to get their training, get an understanding of the insurance world. And as I say to people, I went and joined him after a year and got the real world training of how it actually works and became an independent adviser, so we work with all insurance companies.

You
07:11
But, yeah, it was always gonna be the Korean.

You
07:14
There were always grand plans of working in his business with an aim to take it over.

You
07:19
That, by

You
07:20
default, has actually started to change over the years. My business has got bigger.

You
07:25
Still a conversation that's

You
07:26
on the table, but,

Me (Speaker 0)
07:28
yeah, look. There's always something to work through. Yeah. Nice one. Well, insurance is a very wide topic. Right? So let's just narrow it down a little bit in terms of the types of insurance that you're mostly focusing on. And I had a quick look that apparently the most popular types of insurance in New Zealand, I'm keen to know if chat GBT is right on this, mate,

Me (Speaker 0)
07:46
health, life, and income protection if we stay away from general and fire and stuff like that. Right? So would that be are those, like, the the key three these days that people are looking at? Absolutely. Yeah. Yeah. Yeah. So those are the fundamentals

You
07:59
to insurance. And inside that, there's a few different benefit subsets that you can consider.

You
08:05
But, certainly, my focus sits in the space of looking after individuals

You
08:09
opposed to assets. So those are certainly the benefits that we offer to all of our clients. But probably the big one that's missing from there that I've been most passionate about is something called trauma insurance, which is really focused as a lump sum payment that's made at the diagnosis time for major health conditions, whether it be cancers, heart attacks, and strokes.

You
08:31
But to me, that is the biggest life insurance related benefit

You
08:35
that can really protect somebody's overall financial position.

You
08:39
You know, getting that cancer diagnosis can be heartbreaking. It can be financially

You
08:44
very unsettling for people,

You
08:46
but having

You
08:47
this payment come through at that point in your life can just take a lot of pressure off. It allows you to focus on the recovery without having to sell assets, come out the other side, and still be in a sound financial position for the rest of your life and also retirement.

Me (Speaker 0)
09:01
So is that did you say is that a so trauma, is it a type of life insurance, did you say? Yeah. So I broadly refer to life

You
09:08
everything as life insurance. However, inside life insurance, there are other lump sum payments, whether it's the trauma benefit,

You
09:15
another one called total and permanent disability cover,

You
09:18
which is centered around loss of lit the use of limbs,

You
09:23
but more commonly now we actually see it getting paid out around mental health conditions, which is a a growing area of concern in New Zealand. And then we have the sort of income protection related benefits, whether it's purely to replace income or if it's centered around making sure the mortgage can be serviced if you're out of work. Getting in the KiwiSaver fund that suits you and your situation is key to making sure you're maximizing your investment.

Me (Speaker 0)
09:46
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Me (Speaker 0)
10:07
to book a no obligation chat with a generate adviser. A copy of the product disclosure statement is available at generatekiwisaver.co.nzed.

Me (Speaker 0)
10:14
The issuer of scheme is generate investment management limited, and of course, past performance does not guarantee future returns.

Me (Speaker 0)
10:20
So your trauma cover could, like you said before, it could be cancer, heart attack, stroke. So you have one of those events in your life and basically that then

Me (Speaker 0)
10:29
potentially

Me (Speaker 0)
10:30
triggers the payment of that, and you can use that to support your income

Me (Speaker 0)
10:33
or,

Me (Speaker 0)
10:34
the cost of your how your life now looks?

You
10:37
Well, it's more about meeting sort of increased living expenses as a direct result of getting that used. Yeah. So quite often, what I've seen with some of my clients is that

You
10:46
they may be out of in out of work and also their income's been reduced or disappeared completely,

You
10:52
but they in turn then need their partner to stop work to now care for them or be able to look after the children on a full time basis. Yeah. So we're actually allowing for both parents in some cases to be out of work and be able to financially manage that. But it's more about meeting the short term unexpected expenses opposed to it being a long term strategy for replacing lost income, and that's certainly where the value starts setting in income protection and mortgage repayment benefits. Okay.

Me (Speaker 0)
11:18
So then life insurance, this one seems a little bit simpler, is built around you pass away

You
11:25
and or you may pass away. Is that right as well? Or that's different again. Correct. So I think that's a big big misconception Yeah. Is that it's just a benefit that pays out if you have passed away. The reality is that it can also pay out if you have a terminal illness where there's less than a year to live.

You
11:41
I've had quite a few clients who have unfortunately been in this position, and it's been, you know, very interesting for me to be part of that journey with them.

You
11:51
But in our conversations, the life insurance value is normally equated by, you know, the mortgage level, what levels of income we need to replace if they have passed away for their family.

You
12:01
But when people have had a terminal diagnosis, I've had clients that have put their family onto a plane. They've gone and had the family holidays while they still had the ability to do it. Yeah. Had other clients who've gone out and bought a motor home because that was always part of their retirement dream, and they still wanted to be able to do that together

You
12:18
before they had to come back and deal with the reality of their situation. So

You
12:23
in our conversations, we have to send it around tangible items.

You
12:27
But when people find themselves in that situation,

You
12:30
all bets are off and other things can be exercised.

Me (Speaker 0)
12:33
Yeah. So, basically, let's say someone like, how do you actually prove this? So you get a terminal diagnosis

Me (Speaker 0)
12:39
from a doctor, I assume, and then you go to your insurer or your adviser and then say, hey. Unfortunately, this is my situation.

You
12:48
You know, have I triggered my insurance policy? And they just wired the cash over. Is that correct? In in a fit, that's how it works. So two specialists in that particular field would need to sign off that there it was a terminal diagnosis with that timeline.

You
13:01
But from there, it's actually quite a straightforward process. And with life insurance claims, with the paperwork being available, claims are often paid within inside a week. Wow. So it does give very quick access to those funds.

You
13:14
And those funds might not go into the family holidays or the camper vans like some of my clients, but they might also go into additional medical treatment that might be available overseas, and it's not funded through our public health system or even the New Zealand based medical insurance policies. Yeah. But because they've got those funds available to them, they might be able to make different decisions that weren't previously available to them. So insurance is basically derisking a potential outcome,

You
13:42
right, no matter which way we look at it, whether it's a fire or death, etcetera. Correct. Yeah. Like, I mean, until you're in a position where you can write a check out to cover the financial exposure that sits in your life, that's where there's value in having that insurance in place. And as I say, as your position evolves over time and other assets grow in value, your need for insurance is actually gonna taper off. Yeah. So we need to map that out on our journey through our review conversations.

Me (Speaker 0)
14:08
When do from your experience and then, Shrume, when do people

Me (Speaker 0)
14:12
normally first get introduced to insurance in New Zealand? Is it around purchase of the first property? Yep. Bang on. Bang on. So it's it's either triggered by,

You
14:21
getting married, which is probably

You
14:23
less common as the the driver to take out insurance, but then certainly having children

You
14:28
and then taking on debt where their financial exposure is starting to increase.

You
14:32
That's where we need to cover that that that financial risk through insurance. And so does that look like, okay. I've now got debt.

Me (Speaker 0)
14:39
If I was to lose my income or life, etcetera, I want the comfort of knowing I've derisked the situation

You
14:46
with a financial side on the other side of it where that could clear some of the mortgage or assure that the mortgage can still be paid so we don't lose the property? Correct. Yeah. So it's just taking that practical approach. And if it's a young couple buying a property and it's $50.50, it might not necessarily be that we're gearing your life insurance up to cover all of the debt because

You
15:05
you might not have any dependents yet. You might buy you both might be making good levels of income. So it's more about just reducing your share so that no financial burden's passed on to your partner.

You
15:17
Equally, the same logic applies to income replacement.

You
15:20
We don't always need to cover all of your income. The levels are really gonna be dictated by your current commitments and forecasting

Me (Speaker 0)
15:28
what those might increase over time and making sure that, financially, we have a plan in place to manage that. What about, you know, people being made redundant at the moment and losing their jobs and stuff? Is are they covered with some of these policies, or does income protection not sort of cover that that space? Yeah. It's certainly a pretty topical conversation at the moment. We're getting some phone calls. Yeah. We're certainly seeing a a a Verizon,

You
15:52
request to take out redundancy cover. In short, it is still available in New Zealand, but post COVID, a lot of the insurers pulled out of that space. Yeah. So we're down to two options.

You
16:02
Can't can't be taken out as a stand alone benefit, so it needs to be taken out in conjunction with an income protection or a mortgage repayment benefit. Yeah. But, yes, they're still certainly available and certainly will come in hot demand.

You
16:16
Personally, I feel you, you know, individuals really need to look at their situation. They need to look at their employment contracts, work through it with their adviser to see if it's actually gonna be the right fit for them because they might actually be getting enough of a payout through their redundancy clauses in their contracts to actually outweigh what the benefit is in that redundancy product.

You
16:36
And I always say to people, with redundancy,

You
16:39
the likelihood is that you've actually still got your health and your ability to work.

You
16:43
So you might not go necessarily straight back into your dream job and dream levels of income, but you can still go out and work and get by and work your way back to those positions.

You
16:53
I would always be more focused on when you've lost the ability to work, when the big accidents happen, when the major health conditions come along, and you're out of work, it's out of your control with an unknown timeline.

You
17:04
And I tend to put more focus on that side of the conversation because of the long term risk associated to it.

Me (Speaker 0)
17:11
And with the average age

Me (Speaker 0)
17:13
increasing for the purchase of a first home, I think it's coming from, like, 25 to 37 or something, have you noticed that your customer age has increased naturally? Because then people aren't looking at insurance as early.

You
17:25
We probably haven't seen so much of that average age shift in in our world. Like, as you know, I work with some great mortgage brokers.

You
17:33
One of them sits on the podcast on a regular basis, and, typically, we're still seeing those clients be in their, like, twenties and early thirties. And I know that that's not the case based on the averages, but, certainly, the clients we're seeing and engaging with

You
17:46
are typically in that 20, 30

You
17:49
age band. Yeah. And then it's about building a relationship with them that we can look after them for the future and take care of them for their future insurance needs as well. And is there,

Me (Speaker 0)
17:59
you know, is there something we need to be thinking about when we aren't necessarily buying a property,

Me (Speaker 0)
18:05
that we need to be thinking about insurance earlier? Like, is there a case for younger people thinking about insurance in their early twenties? Sure. I mean, in effect, as soon as you start generating income, that becomes your greatest asset long term. Right? Yeah.

You
18:18
So even if we look at basic maths for a 25 year old who happened to be on a 100,000, which I know is not always the case, but it makes the maths easier.

You
18:27
You know, even without inflation and without any pay increases, over a thirty year time period to retirement,

You
18:35
forty year time period. Sorry. I might need to eat at that part.

You
18:39
You know, that that's effectively a $4,000,000

You
18:42
asset to them that they might lose out on generating because of one of these unexpected health conditions arising. So my view is that the conversation should start early. We don't need to overinsure you early on, but we do need to start managing that risk as soon as you start generating income. Because most people who are working, to the most part, will be already renting properties. They might have some car finance. They might be making,

You
19:06
you know, they might have committed themselves to

You
19:10
some financial commitments and debt. Yeah.

You
19:12
So the question does become, even at a young age, how would you support those expenses that aren't gonna disappear because you're not working,

You
19:19
and that's where the insurance piece comes back into it? And on that, is it cheaper when you're younger because you're then less likely to die probably statistically? Because this is how insurance is calculated. Right? Totally. Yeah. So, look, the premiums are very affordable for younger clients, to put good levels of cover in place. As you get older and that risk profile changes,

You
19:40
then that is reflected in the premium structure.

You
19:45
But there are a couple of approaches to this. So one, if I go back to the review, it's about managing the levels of cover that are in place because we don't wanna have you over insured and overpaying for premiums.

You
19:56
And then the second option is we can take quite a long term approach as to how we wanna structure the premiums on the policy.

You
20:03
And a lot of people just think that there's only one, and that's what we refer to as a rate for age premium. So that's gonna be each year, the premiums are calculated that based on your age, and as you get older, which we can't control,

You
20:15
that's gonna start to, in turn, increase the premiums.

You
20:19
Or we can take more of a long term strategy and use something called a level premium, which is kind of like a fixed mortgage rate where we fix in a fixed monthly premium for a defined amount of cover over a fixed term, and, typically, that's to the age 70 or 80. And we know that we're basically gonna lock that level of cover in at a known quantity each month until you turn 70 years old. Yeah. So while it might work out to be more expensive short term, the savings over that term of the policy are substantial.

You
20:51
It's just about making sure that it's gonna be financially affordable for each client, which is a big part to our conversation, and that it fits in with what their long term objectives are Yeah. In regards to their insurance position.

You
21:03
In bit of a tangent. So I'm fairly sure every time I go and see my old man, he tells me how, his life insurance is getting more expensive because he's getting older, and he's like, you you could buy it off me. And so, like, that that's still a thing. People still do that. Yep. Look. It it's a pretty challenging conversation for people to have, and it's kind of taking a bet on mom and dad that at some point in time, they're they're gonna pass away, which is a sad reality, but we are seeing that more commonly happen where children will start to pay for their parents' life insurance policies because they are gonna be the beneficiary. So

You
21:36
we don't see it a lot, but it certainly is happening.

Me (Speaker 0)
21:39
And so in that position, do they like, would I just start paying his insurance on his behalf and I get something in writing to say, should he die, that that money, those funds don't go to the estate. They go directly to I become the policyholder. Sure. So there's a couple of different ways that we can set that up. So either we can nominate a specified beneficiary,

You
21:58
or you might even become a policy owner on your dad's life insurance policy, which means that you're paying the premium. But if in turn, if he passes away, you can speak to the insurance company, and those funds will be paid directly out to you. Yeah. Wow. Because I guess then the

Me (Speaker 0)
22:12
the insurer is not gonna that they'd rather probably be paid. Right? But,

You
22:15
if he cancels that, then, basically, that's like, it's gone. Yeah. So in New Zealand, we only have something called term life insurance, which is effectively a yearly renewable policy,

You
22:26
and it's a fixed amount of cover for for set amounts of premium. But at the end of the policy or when you choose to cancel it or make significant adjustments to it, that becomes the end of it.

You
22:37
We used to have these benefits called how whole of life or endowment policies,

You
22:43
where they're a combination of life insurance and also investments.

You
22:47
But, ultimately, we didn't have the scale in our population to make them work.

You
22:51
Countries like China and India have they've proven to be unbelievably

You
22:55
successful because they can just get the people into it and get a bigger pool of funds working for the policyholders.

Me (Speaker 0)
23:01
Yeah.

Me (Speaker 0)
23:02
Interesting. Alright. Maybe I have to have a serious conversation with my dad. He might even be watching. I'm I'm not sure if he's joking or not, but, yeah, I wasn't even sure if it's still actually doable. But Yeah. Better watch out then.

Me (Speaker 0)
23:12
Yeah. Yeah. I have to go and see what it costs them. Hey. So what's the split in between the the types of, people that you're dealing with in terms of the type of insurance that they are, you know, getting support,

Me (Speaker 0)
23:23
from you to put in place? In terms of the age demographic or the program? Yeah. Even the type. So because I know you probably do some in the business space as well, right, which we can get to, but is it predominantly,

Me (Speaker 0)
23:33
like, life income protection

You
23:35
at those two spots or or even, you know, first time buyers, etcetera? Yeah. So I think particularly for new clients for insurance, it's really important to discuss all benefits, and some might not be relevant to their particular position, but that can evolve over time, and at least they've got an understanding of how those might fit in.

You
23:52
Certainly, with my clients, they would always have life and trauma insurance as an absolute minimum foundation

You
23:59
plan.

You
24:00
Medical insurance is a good cornerstone to have in that because some of the medical costs in New Zealand are starting to skyrocket. Yeah. I think that problem's gonna compound,

You
24:09
in the years to come.

You
24:11
But, typically, as my clients are typically first home buyers or they're going through a refinance process,

You
24:17
they will always have mortgage repayment or income protection in place. And it's it's case by case dependent depending on what they do for work and how their finances are structured as to what's actually gonna be appropriate for them. Well, on that, there's a lot of chat at the moment about the cost of insurance increasing, and I think people are feeling it. What's driving that cost of,

You
24:37
insurance increase? Well, in the life insurance space, over the last couple of years,

You
24:41
one of our big hurdles has been the inflation rates have been so high. So the policies are typically increasing as you you get a year older, but they're also increasing with inflation.

You
24:52
So that inflation rate is impacting premiums, and it's also increasing the sum insured value of the policies.

You
24:59
So that's to make sure that a policy that was taken out twenty years ago is actually staying relative to the cost of a dollar

You
25:06
into the future.

You
25:08
So that's certainly been a big stumbling block for for people over the last couple of years.

You
25:13
But once again, in that review process, you can actually discuss with your adviser declining that inflation readjustment, which can help manage some of that premium change on a year to year basis. And you don't need to decline it forever. You might do it this year. You might skip it for a couple of years and then decline it again.

You
25:30
But, really, it depends on what your situation is.

You
25:34
For most people, though, that have got maybe slightly older kids and their debt's reducing and their financial position's getting stronger, they might not have a need for that life insurance policy to keep increasing over time as well. So that's where we might permanently turn that inflation readjustment off.

Me (Speaker 0)
25:50
I see. So that's basically saying let let's say, like, I when I took out life insurance, it was $200,

Me (Speaker 0)
25:55
but that was probably over ten years ago. So I want that to be adjusting to become adjusted for inflation so that it's keeping up with that. So I'm in Correct. Three I'm actually insuring myself for 330,000,

Me (Speaker 0)
26:07
for instance. Correct. So it's all relative. New Zealand. Yeah.

You
26:11
And and I think one of the other big components that we're seeing is that, you know, particularly if we look in the medical insurance space, we're starting to see a huge increase in claims starting to flow through across all providers here.

You
26:23
And, you know, the reality is we're pretty fortunate in New Zealand with our public health system,

You
26:28
and they're very well set up for acute related conditions, and I refer to things like heart attacks and strokes.

You
26:34
But for nonlife

You
26:36
threatening conditions, whether it's hip replacements and

You
26:40
events like that,

You
26:41
it's all severity based, and it's a waiting list, and there's just an unknown timeline to that. And people are starting to get frustrated with it, and the timelines are actually getting blown out. So we've seen more and more people take out private medical insurance,

You
26:55
which in turn is putting more pressure on the private world.

You
26:59
And

You
26:59
in turn, some of those prices are starting to increase from those specialists, and surgical costs are increasing.

You
27:05
So it's a compounding effect as as the pressure gets put into the private sector.

Me (Speaker 0)
27:11
In turn, that's gonna see the premium start to increase. I wonder if we could see a time where maybe people paying for their own types of of insurance that are then taking

Me (Speaker 0)
27:21
the pressure off of the public health system could then be,

Me (Speaker 0)
27:25
you know, tax incentivized so that becomes a tax deductible expense. I'm probably hoping for something that Yeah. Never gonna happen. But you know what I mean? Like, people are kind of insuring themselves to go, okay. Well, I don't wanna have to wait. Mhmm. So I wanna be able to go private. And if they've got the means so they can afford to, then they aren't gonna use the public health system. So then they're both paying tax and then paying an insurance, so they don't need to use it.

You
27:46
I wonder It's a it's a great pipe dream, and we're certainly supported in our world.

You
27:51
I mean, we start to see elements of that creep in, you know, like, for all self employed people who are paying ACC levies, there are actually ways to adjust how much is paid to ACC.

You
28:01
And with some of those savings, it can offset the cost of putting in far more comprehensive income protection, mortgage repayment benefits to cover the same risk that ACC would have. But you'll also have the benefit of covering health conditions, which there's not a lot of financial support for through the public sector.

You
28:18
So,

You
28:19
look, it could happen.

You
28:21
Certainly. Yeah. Probably not. Let's start another poll, get some signatures, and see how we go. But,

You
28:27
look, it it would be great to see initiatives like that come through, but it's certainly nothing I'm familiar with at the moment. I don't think it's on the radar for the insurers to be driving it at this stage. Yeah. But I guess what you're saying as well is that as more people have been thought, okay. I can pay for this insurance myself, then they're needing to use those claims, and then that's just putting more people into the private space as well, which is then driving up demand and therefore price too. Yeah. So, I mean, if we if we look at one of the health insurers that we work with, in July,

You
28:54
their claims

You
28:55
stats were up. They had 30% more claims than their previous month on record. And so

You
29:01
in turn, that's just a great signal that the private sector's getting more and more use.

You
29:07
Yeah. More and more claims are getting paid. So this particular provider had about 260,000

You
29:13
claims in the '23

You
29:15
financial year. Sheesh.

You
29:17
Yeah. So it's massive. Yeah.

You
29:20
And and they're they're

You
29:22
good scale size insurer, but there are other bigger providers out there that have seen far greater levels of of claim volume flow through.

Me (Speaker 0)
29:30
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Me (Speaker 0)
30:17
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Me (Speaker 0)
30:22
and get a savings estimate simply by uploading a recent electricity bill. Talk to us about the mental health piece that you mentioned before in terms of people being able to claim for that. Like, how how is that coming about? Yeah. So, look, it's a it's a complicated one.

You
30:37
But if we look at sort of short term events where we might be able to work for things like burnout or isolated stress,

You
30:44
that's when we start to lean on benefits like income protection and mortgage repayment because it's recognizing that you're out of work due to medical reasons, and we're gonna make sure that there's continuing cash flow coming through in that particular situation.

You
30:57
For very advanced conditions,

You
31:00
where you might permanently be taken out of the workplace,

You
31:03
that's where the total and permanent disability benefit can come through and support you with a big lump sum pain payment to help support that transition

You
31:12
and sort of support you longer term.

You
31:15
The health insurers in the market are doing what they can. Personally, I feel like there's work to be done by the insurers in this space, but we are starting to see some positive movement from someone health health insurance as a benefit offering sort of 2 and a half thousand dollars worth of

You
31:32
psychiatric support.

You
31:34
We're starting to see some of the bigger insurers in the marketplace

You
31:37
really drive wellness,

You
31:39
programs as part of their insurance offering to sort of better support their clients, making sure they're staying active, doing their annual health checks, and and ultimately just keeping better tabs on their overall well-being. So

You
31:52
it's a slow it's a slow moving tide that we've gotta ride, but there is work to be done in that space.

Me (Speaker 0)
31:57
So if people have genuine mental health issues and they know that they've got forms of insurance, they should probably be reaching out to their adviser and saying, hey. Absolutely. Yeah. Like, I mean, we always encourage our clients to contact us

You
32:09
whether they think that there's a claimable event or not.

You
32:12
And quite often,

You
32:14
there have been cases where I've had calls from people and they go, look, it's probably nothing, but, you know, this little event's popped up. And I go, well, send me through this information. There's a process that needs to be followed, but let's explore it. You know? Like, insurance is there to be used, and we encourage our clients to use it. Because it's no real work for us to try and support our clients at that point in time. And I've got, you know, couple of examples where I've had those conversations with clients, and they've

You
32:41
you know, one example is a client who had a grade four skin melanoma cut out of his neck, and it was a very minor

You
32:47
procedure to have it removed.

You
32:49
But because of the information that we sort of guided them to get, we went from going,

You
32:55
let's just cover the cost of the medical procedure, to him actually having a full trauma insurance payment. And he didn't think that he was gonna get anything from it. In fact, he didn't even think he could claim for the medical procedure. So Yeah. Sometimes you just don't know what you don't know.

You
33:08
Mhmm. I've had instances where we've

You
33:11
had reviews with clients and, you know, we ask them how their health's been and what's been happening in this sort of world, and, you know, you'll speak to a husband and wife. I can think of one story quite clearly in my head where

You
33:24
a good New Zealand bloke said, oh, nothing's wrong, and I'm still ten foot tall and bulletproof even though I'm 50. And Yeah. I remember his wife just booting him under the table and said, what are you talking about? You had prostate cancer last year. I was like, why didn't you contact us? And they're like, oh, we didn't think it was serious enough. We didn't think we could claim. So, well, let's get some, you know, backdated information. Let's run through the process, and sure enough, we had a trauma insurance payment paid for him.

You
33:51
Maybe a little bit late, but better late than never, and the timing worked out well for his daughter because he funded their wedding as a result of getting the payment. So,

Me (Speaker 0)
33:59
yeah, no. That that was a good thing to be part of. Then. Yeah. And so is there any general rules for people that do have insurance to reach out to their advisers or their insurance companies

Me (Speaker 0)
34:09
to remind them, like, if that happens, I probably need to to tell them?

You
34:13
So, look, we we certainly try and stay in regular communication with our clients, and we ask those questions as part of the annual review survey that gets sent out. But I would just encourage people to reach out to their advisers and just say, hey. Look. This has happened.

You
34:27
What are my options? And it might be that it might be too early on in the process, but we can give you some guidance on what not might need to be captured to support a future claim and things to be aware of throughout that process. Even who had broken bones potentially for some people with the type of cover they have. Absolutely. Yeah. So they can be isolated payments,

You
34:46
made to recognize

You
34:48
broken bones and fractures. So, you know, I think you have to be a bit careful with insurance that you can cover absolutely everything under the sun, and you can cover yourself up to the eyeballs. And I'm really honest with this, but you actually need to pair it back and go, this is plan b sort of stuff. We don't wanna set it up so it's gonna financially

You
35:07
enrich you. We're just making sure that financially, you're still gonna be in a really good place even if something unexpected

You
35:14
arises. So as I said earlier, you know, I always run a pragmatic approach to putting the levels of cover in place that I do for my clients because I don't wanna overcomplicate it, and I don't want them paying too much. And how often should people be reviewing this? Is it, you know, as simple as annually, or are we trying to remind people a bit like a will, you know, if you're having kids or you're getting married or something happens, like major events you wanna be reaching out? Yeah. Look. It it's certainly an annual basis.

You
35:41
At a minimum, I would encourage.

You
35:44
Not enough, in my view, changes over a six month period of time to dictate having a review at that stage.

You
35:51
And it might even be that clients just don't wanna engage with us for a couple of years because they just don't feel enough has shifted. You know? They've set up a brand new mortgage. They've paid down $20,000

You
36:01
a debt. They don't see there to be enough value in adjusting the levels of cover at that stage.

You
36:06
But I do say to people as well as, you know, it's it's an open line of communication. You know? Keep us in the loop. We wanna hear about your promotions. We wanna hear about kids coming onto the scene. You know? Like, we're excited for you. You know? We wanna be part of the journey, and let us sort of guide you on what ensure what that means on the insurance side of things. Do we need to increase? Do we need to decrease?

You
36:26
Because

You
36:28
we don't want to always just keep putting more cover in place, and there's variables that'll happen for some people, and this certainly doesn't apply to everybody, but they might have received an unexpected inheritance or there might have been some other sort of windfall that has come through.

You
36:43
You probably don't need as much insurance anymore because you've been able to bolster your own personal position,

You
36:48
and Yeah. Your risk has been decreased.

Me (Speaker 0)
36:51
I suppose you could have an an inheritance, for instance, and all of a sudden that completely changes your need for different types of insurance. 100%. Yeah. So

You
37:00
everything's an evolving picture, and insurance isn't a static thing. It's certainly not a sit and forget.

You
37:06
You know, just engage with your advisers. I think, for the most part, we're all pretty good sort of people, and and we are just genuinely there to help you and guide you on something that you're probably not an expert in. And and that's where the trap, I think, it falls in that robo advice as people have gone on think that they've got what they actually needed, but there are some shortfalls, and that's what we need to guide them on. Do you ever end up reviewing some of that robo advice and then Sure. Yeah. Yeah. Have a little bit of time. We enjoy it. Yeah. And it's probably quite similar to some of the, old bank teller advice that was given in the insurance space. You know? Yeah. Ultimately, they were bankers. They weren't insurance advisers. They just didn't understand it in a similar way to a specialist in that field. And quite often, they've been sold lower quality benefits.

You
37:52
So

You
37:54
policies that might not cover a certain amount of conditions or the same level of conditions as some of the more, you know, what I'd refer to as retail insurers might cover.

You
38:03
The levels of cover can be completely out of kilter with what somebody actually wanted.

You
38:08
So

You
38:09
the robo advice, the bank advice, it's always been a bit tricky, and we we certainly enjoy reviewing those policies and putting people back on on the path of what they actually need. Nice. So if anyone's ever had robo advice or basically over the counter

Me (Speaker 0)
38:22
banking advice in the insurance space, probably much like KiwiSaver as well, probably worth

Me (Speaker 0)
38:27
getting an adviser just to have a look at it. You don't even have to sign on, but, gee, wouldn't you rather know? Absolutely. And there's no cost to the client to engage with an adviser

You
38:36
to get some initial advice. Yeah.

You
38:39
So we will, you know, gladly run through the process. Ultimately,

You
38:43
we are paid by the insurance company on the completion of a policy, so there's no additional cost to you.

You
38:49
We're not gonna send you out some hidden invoice that we're not disclosing. It's it's not the aim of the game. I think in your space, you even have to declare what you're potentially making on a policy. Right? So we're completely transparent on the process, and, you know, we don't hide

You
39:03
what what's available to us.

You
39:05
But

You
39:06
it's a start of a good faith relationship with your adviser with an insurance company. So why not be transparent right from the outset so everybody knows what the playing field is? Yeah. Going back to what you're saying before, mate, about the cost of health increasing. So

Me (Speaker 0)
39:20
because I think well, yeah, you'd be better to answer this. Do you think that

Me (Speaker 0)
39:25
a lot of New Zealanders don't actually realize how expensive an operation is or a medical procedure even once you start layering layering in an anesthetist,

You
39:34
and just how expensive those people are Yeah. And just a bit blase of, like, oh, well, she'll be right. Yeah. I think there's there's probably a lot of misconception, and and some of that might be driven by the fact that we do have a good public system and it has been so reliable for such a long time. But I think people's eyes are starting to open to what the true expenses

You
39:53
associated to some of these procedures are now. Yeah. And we've gotta look past just

You
39:58
surgical expenses. There are other unrelated costs, particularly in that cancer space around getting really good access to nonpharmac

You
40:05
regulated medicines that can really support

You
40:08
postoperative care, extend quality of life. But those drugs don't have any government subsidy at the moment. They're often privately funded,

You
40:17
and those drugs can be wildly expensive in some cases. And Yeah. You know, I've had clients who have needed them. They've been as much as $10,000

You
40:24
a week. So Wow. Just financially unmanageable

You
40:27
for people who don't have these plans in place, and it's those people who are then having to sell the family home and sell the cars to try and fund treatment to actually prolong their life, which is horrible to see. Yeah. That's why it's like anything we hope that it's not gonna happen to us, but, you know, this is what this whole space is designed to do is derisk it if it does happen to us. Yeah. Absolutely. And, you know, if we if we were specifically referred to that trauma benefit,

You
40:54
like, we know that the average male actually claims at age 42 and the average female claims at 44. So

You
41:01
some of these claim points aren't, you know, just for our sort of parents' generation, the 50, 60 year olds and older out there. It's it's happening to all age spectrums.

You
41:12
Yeah. Last year, I had a claim for a three year old who was having some

You
41:16
serious complications with respiratory issues and had to spend an extended period of time in intensive care.

You
41:22
But, you know, at nearly 40 now myself, we're starting to see our friends get impacted by them. I've had a friend of mine who's at 38

You
41:30
who had an

You
41:32
a stroke, and that potentially was gonna take him out of work for the rest of his life. So amazing to sort of see how these events are starting to creep into

Me (Speaker 0)
41:42
all wage spans. I suppose when we're in our early twenties, we're like, ah, no. Don't need to worry about that stuff. Just like anything. Don't need to worry about retirement.

You
41:49
Nothing. Life's good. Yeah. Yeah. And then it starts to creep on you up on you real quick. Yeah. It does. And it becomes more real when you've got people who become financially reliant on you, whether it's a partner, whether it's children,

You
42:01
whether it's

You
42:05
the bank. Yeah. Yeah. Life does get complicated, so we wanna try and take some of that complication out of it and put in protection.

Me (Speaker 0)
42:10
I was quite lucky. I had a employer and boss that sort of,

Me (Speaker 0)
42:14
pointed me in the direction of learning about insurance at a younger age, and

Me (Speaker 0)
42:19
I've just always had it since my my early twenties and then got to a stage where I didn't have property. So I didn't even really need it, but

Me (Speaker 0)
42:26
I could then make the decision of do I want to to keep this, and it wasn't the sort of amount of money that I'm like, nah. Like, I just purely, you know, can't afford this. But I'd imagine there's probably some people out there that go, well, I don't wanna pay that because then they,

Me (Speaker 0)
42:39
you know, wanna try and save it themselves or do that sort of thing

You
42:44
self insure. Yeah. It's self insuring as as a thing, and, you know, I'm not opposed to it, but it's about having things in balance.

You
42:51
But going back to your earlier point there, you know, we're starting to see more and more corporates and bigger businesses start to implement these life insurance and medical insurance options for their staff.

You
43:01
And for those businesses, it's a great retention tool for being able to,

You
43:06
keep

You
43:07
really loyal staff to them. It attracts new people into their businesses as well.

You
43:13
And, fundamentally, I think that that starts educating

You
43:16
younger people coming through because we're ultimately an underinsured

You
43:20
market.

You
43:20
And, you know As a nation? As a nation. And, like, you know, my parents certainly didn't educate me on the value of life insurance, something that I learned as time went by. And I've obviously chosen it now as my career and and and ultimately where my passion lies. But Yeah.

You
43:35
The exposure to this

You
43:37
is pretty minimal. Like, unless somebody's told you to go and take it out, and typically it was the bank when you got your first mortgage,

You
43:44
up to from age zero to that point, there's nobody else going, time to take out some life insurance or get income protection in place. So,

You
43:52
I think that the corporates and bigger businesses in the market do have a responsibility

Me (Speaker 0)
43:56
to their staff to be putting these benefits in place. And is that something you do? So say an employer reaches out to you and says, hey. Can you come and educate our team on some of these types of insurance? You go into into businesses and give them a hand? Yeah. Absolutely. So quite often, we'll actually try and run sort of financial programs that we're working with those businesses.

You
44:14
We can talk about mortgages, and we get in brokers to discuss that. We get in KiwiSaver specialist to make sure that they're getting the best value out of long term retirement savings, and then we bring in an insurance conversation.

You
44:25
And whether that's gonna be individual policies that are managed directly with, you know, new clients or if it's with the business itself to put in layers to their offering to staff. Yeah. Yeah. But it's absolutely a space that we operate in and and really enjoy working in. So if you, say that we're under insured as a nation, any data on, like, percentage of kiwis that are covered versus other countries and stuff like that? Yeah. So if if we look at one of the biggest insurance companies in the market who who currently sort of owns about 45%

You
44:54
of market share,

You
44:56
they've got about 800,000

You
44:57
policies in place.

You
44:59
Wow. So

You
45:01
we could sort of say that the other four main insurance companies

Me (Speaker 0)
45:05
would equate to sort of a similar value. So we could say there's around sort of a million and a half at an estimate policies in in the market at the moment. Yeah. And is that across, like, health life, income protection, etcetera. When you talk about health insurance, is that, you know, that seems to be really popular at the moment around, I pay for x y z insurance, and I can get a massage, and I can have my teeth covered as well once a year and what whatnot. Is that health insurance? Yeah. Absolutely. So,

You
45:30
you know, once again, having a pragmatic approach, particularly with medical insurance, there are a lot of add ons that can typically go into those policies, and you do need to weigh up if it's the right add on for you or if we're mainly

You
45:43
focusing the plan around costs that are gonna be financially unmanageable.

You
45:47
Yeah. But, certainly, as it as we talked about before, there are these wellness programs coming out by insurers that are, you know, really motivating people to stay active, be proactive about their health, get annual health checks. And if you're a part of those programs, they're amazing. They they actually give you discounts on your insurance premiums. And the more active that you are and the more engaged that you are, the more discount you can actually add to your policy. And in turn, they'll start to give you vouchers, whether that's for movie tickets or groceries. So you can actually get your insurance policy something that is a necessity,

Me (Speaker 0)
46:19
actually subsidizing other parts of your life too. So Yeah. It's a great program. It's such an interesting space there because there's so many moving parts. And just reminded the conversation,

Me (Speaker 0)
46:28
that we've had previously where you said to me, oh, you could increase your excess and then that's gonna decrease your premium. So excess being if the insurance is to be claimed that you are having to let go of a lump sum of money, but then your insurance payments, the premium part is actually decreasing.

Me (Speaker 0)
46:45
Right? Yeah. And I think it's probably

Me (Speaker 0)
46:47
again, it's one of those things that you then have to think about because you might get yourself to a point where you're financially sweet to cover a higher amount of excess,

You
46:55
and then you don't need to be paying the same level of premium. Correct. Yeah. So it's it's all about finding out what the balance is for an individual. Yeah. But, you know, I'm very pro on having high levels high level excesses

You
47:07
because we wanna reduce the premiums while you're not using it, but we just need to be make sure that you're actually in a comfortable position to manage the Yeah. Thousand, $2,000 excess when that procedure pops up.

Me (Speaker 0)
47:19
And have you noticed people,

Me (Speaker 0)
47:22
canceling their insurance or hearing that in in the industry with just how tricky it's been out there financially?

You
47:28
Look. There's there's a lot of hurt out there at the moment, and and we do we're exposed to some of them. But, actually, during these tough times, people will actually put more value in their insurance.

You
47:40
So

You
47:42
what what the better strategy is to work with your adviser to see if there are ways of potentially suspending parts of the policy,

You
47:49
going premium holidays, and actually trying to find work around so you can still retain the policy.

You
47:54
Maybe it's just a matter of going, actually, our situation's changed, and we don't need the same levels of cover. Can we look to review it and adjust that? And that's the way that we manage premiums so we can retain it and hold on to it for the future.

You
48:06
Because the risk is,

You
48:08
potentially, if you're in your forties or fifties and you go to cancel it, and then the economic times get better for you and you're back in secure jobs and steady income and you go, let's take the policy out again, well, you might have had a whole lot of health conditions that have popped up since you originally took out that policy

You
48:24
that then limits your ability to take the policy out again in the future. So you need to be very mindful

You
48:30
when you are making big decisions like canceling a policy because they're permanent.

Me (Speaker 0)
48:35
Yeah. So alterations are certainly a better approach. Yeah. So let's, take out a policy and I'm 20 right, and then all of a sudden, 28, I have a bit of a back issue, but I cancel my insurance.

Me (Speaker 0)
48:46
Probably by the time I'm at 32, when I go, right, I can afford to do it again, I'm gonna be excluded for things around my back because I then have to disclose that I've had that. That's right. And and, you know, it's a back example. That's the number one claimant for income protection policy. So,

You
49:02
you you do need to be cautious of, as I say, those cancellations.

You
49:06
But, equally,

You
49:07
another way is to look at a policy that might have been in place for a number of years. Has it actually got exclusions on it or premium loadings that can now be reviewed based on your health profile

You
49:18
improving. Like, they're not

You
49:20
a permanent

You
49:21
fixture. There are ways that we can review it. Might even be you need to change provider to have it reconsidered, which is sort of, once again, plan b in that space. But there's always different angles that can be played, and just getting some good advice around it is is a really smart option. This is such a deep,

You
49:39
space to try and figure out yourself. Right? Yeah. Look. If it's not the language that you're used to speaking in, you can see how people get lost, and that's why we try and take our time on on our process.

You
49:51
I remember when I first started in the industry, it was we meet once, we gather some information, we give you the recommendations, and here's the applications.

You
49:58
I mean, it's it's oversimplifying it a little, but, certainly, now I say to people, look. If this takes two meetings or if it takes 10 meetings, it doesn't matter. I've got all the time. We just need to make sure that you're comfortable with what goes in place. Because, ultimately, the adviser's not the one that's paying the premiums, but they're also not the beneficiary of that policy. So we need to make sure that everybody's comfortable with the plan that's going in place.

Me (Speaker 0)
50:21
What word of warning would you have for those people who think, right, I'm not gonna pay my insurance, and I'm gonna put that money aside myself. And and is it really worth it? It's too or a little bit too expensive now.

You
50:33
Look. I think it's a really good plan if you can keep putting that money aside, and you don't have any health issues, and you're thirty, forty years down the track, and your little pot's no longer a little pot. It's a big pot of money, and and and that sort of serves you better for retirement. But it's it's more of the what if factor, and that's why I say run a pragmatic approach to what levels go in place to try and manage those premiums and just be a bit sensible about what you're doing from an insurance standpoint because

You
51:00
not everybody's got the money to be able to financially support themselves for the rest of their life if they're out of work tomorrow, and they don't necessarily have the family support to make that happen either. So who's gonna look after you? What's your life gonna look like if you don't have a plan b in place?

Me (Speaker 0)
51:15
It's I can see why people get there because they're looking for a way to cut some costs out of their life, or they learn, oh, yeah. I heard that insurance companies just take that money and they invest it themselves, and that's what they do. But,

Me (Speaker 0)
51:27
like, what happens if you do die or get cancer or something like that in that first two years or even probably like the first ten? You've got to run some math on okay. Just doesn't work. Yeah. I was gonna say, how many people do you actually see come up with that strategy and go, you know what? And then come back to you and go,

Me (Speaker 0)
51:42
Johnny, guess what? I did cancel that in beautiful. I just got an,

Me (Speaker 0)
51:45
cancer diagnosis, but fuck you, mate. I've got $300 stacked aside. Like, I'd imagine most people would be like, I'm gonna build a deck. I'm gonna do x, y, zed, and wouldn't actually leave it there. Yeah. Look. I think for most people, they don't have the discipline of actually putting that money into an investment and then seeing it through for it to become tangible. So,

You
52:03
everything in balance. And if your approach is to self insure some of it, great. You know? Don't take out something you don't need,

You
52:11
but think about what the downside risk is. Can you put a smaller amount of cover in place and have it only there for ten years while you're still building that investment account? And in ten years' time, let's reassess it. If you don't need it, let's cancel it. Like, let let's be pragmatic about it. No. So what you're basically saying is, like, it's you don't have to go the full hog, and there could be there's different options where, you know, you might take one policy compared to three, etcetera, and then just keep adjusting as you go. Yeah. And it might be that you run a staged approach to it.

You
52:40
So, you know, I appreciate particularly with clients moving into their first home, like budgets are put under pressure, and then you've got all your moving costs and setup costs. So putting the insurance,

You
52:50
piece into the budget can be very challenging for people. I get that.

You
52:55
But look at where the support would potentially be for you. Like, we do still have the public system, so that is your fallback in that particular space. But if you're out of work, if you've been face faced with a major health condition,

You
53:07
financially, how are you gonna manage that? Perhaps short term, let's just get some lower levels of life cover in place. Let's put in a bit of trauma cover so we at least know you've got something.

You
53:17
And if that day does come along, at least you're gonna have some financial breathing space before you're forced to sell the property, before you're selling off your car and all the toys that you might have in the background. Yeah.

You
53:28
Because if you're forced into selling a property, you're not gonna get a premium for it. Murphy's Law will say it's a bad market, and it's a bad time to sell the property. Factor in real estate fees, and all of a sudden, if you'd only recently bought that house, you're not even getting your deposit money back. You've just derisked it because you paid the bank off, but you actually haven't had any real capital that's gonna support you at that point in time. And what about with the introduction of KiwiSaver and KiwiSaver getting a bit larger? Are that some of the conversations you've having with older clients or clients that have gone through that journey where they go, you know what, Johnny? We don't actually need some of these policies anymore because we've got a pot of 600 g sitting there in KiwiSaver or an investment fund and things like that. Yeah. Absolutely. And and great that we love seeing that, you know, where we can minimize insurance and be practical about it. That's what we're very pro on.

You
54:14
Where we need to be a bit mindful is where they're saying that they've got a lot of wealth tied up and they're in assets then aren't overly liquid.

You
54:22
Yeah. Property. Work property. Yeah. But even even investments to the most part, like, there can be some pretty serious break costs, or you might not get a very good return if you're having to pull that money out in a short time frame. It might still be that it's quite practical and sensible to have a level of insurance in place so you know that you've always got,

Me (Speaker 0)
54:40
you know, your, plan b there while you're actually liquidating some of those assets on a timeline that realizes the most value out of them. Yeah. It's interesting. I'd imagine that probably some people, once they get to that stage, they would see the cost of some of these policies and go, you know what? It's actually not that bad. I'm just gonna continue to pay it, and then they sort of end up accumulating more wealth if it's triggered. Yeah. And, like, I've got a client who's

You
55:04
exceptionally wealthy. They've got a huge amount of assets that sit in the background, but he know his he knows his household running expenses are massive. Yeah. And it's gonna take a long time for his wife and children to get access to his assets by the time they've gone through the courts and managed through the wills and trusts and all the complications involved in that. So he still keeps a million dollar life insurance policy, and it's a nominal cost for him to know that his wife's gonna have immediate access to funds

You
55:30
while she works through that process to get the as assets transferred to her.

Me (Speaker 0)
55:34
Different different level of thinking, isn't it? Different level of thinking, and it's all proportionate to people's positions, though. And it's something you've gotta remind yourself of as an adviser is everybody's different. Everybody's needs are different. So there's no one size fits all approach. And that's the key for people to actually engage with the space and realize it's it doesn't need to be scary or it doesn't need to be slimy or salesy or whatever they've preconceived ideas be. It's basically,

You
55:59
I need help understanding my situation from somebody who has the expertise. Yeah. Like, we're not gonna ever sit there and say that you're wrong, but we might guide you on saying, hey. Look. I get the logic of trying to manage premium removing these particular benefits, but we still need to keep this in as a base plan. What would you say to those people who are listening and are thinking about maybe getting into the insurance industry for a career? Yeah. Look. You're likely probably a careers adviser in the space now after a decade. Well, maybe give me a call because we're always looking for good staff members. So,

You
56:29
but, look, it it's a great industry

You
56:31
to join. It's very rewarding.

You
56:34
Yeah. So, look, I I would sort of welcome people into the industry. I we welcome advisers. I feel like there aren't enough of us to go around. We need to be building out

You
56:44
our space and spreading the word wider and further.

You
56:48
But it's a rewarding industry that you can build a business off the back of helping people. So it's a way that you can everybody can get what gets what they need. Before we go, mate, any gnarly stories or any still favorite stories from your your decade in the game?

You
57:02
Well,

You
57:03
a story that I touched on earlier is

You
57:07
my friend who had the stroke. It was a tricky situation. He'd actually been to a chiropractor and had a neck adjustment, and he had a very rare

You
57:15
outcome from that adjustment, which was a stroke. So he literally drove there, was taken to the, ambulance in a hospital afterwards,

You
57:23
But this particular guy was sitting on some applications that we have been following up for about eighteen months, and he refers to it as the claim that cost him a million dollars because that was an increase that we were looking to make to a part of his policy.

You
57:36
Fortunately, he already had some very good cover in place, so he was well supported.

You
57:42
But, you know, while the conversation's live, you know, action it. Don't let it drag on too long Yeah. Is a key takeaway from that.

Me (Speaker 0)
57:51
Just trying to think of some other good stories. It's always the ones in the media we see, right, where it's like someone cancels the policy and then three days later. I'd imagine that probably happens more than people realize, but

Me (Speaker 0)
58:01
it's just it's such a good story. But statistically

Me (Speaker 0)
58:05
well, you know, such a good story to sell attention, but statistically,

You
58:08
that probably, you know, happens quite often. Yeah. Look. Certainly, we encourage our clients who have been long standing clients of ours, and we've got very good personal relationships or or don't for that matter. But if they are looking to cancel their policies outright, we do encourage them to go and get a general health checkup with their GP. Go and run a set of bloods.

You
58:27
Look. The policy's gonna stay in place for maybe another month. You might have to manage another month's worth of premium, but it was worth it in case something

You
58:34
came from that console Yeah. And and there was gonna actually be a claimable event or there were starting to be markers

You
58:41
that might lead to there being a claimable event, you know, within a short timeline.

Me (Speaker 0)
58:45
Oh, you just scared the shit out of me going to the chiropractor the next time. Yeah.

Me (Speaker 0)
58:49
We didn't even really touch on the business side of things. So in terms of some of that cover, you I'm sure you mean you still do, like, quite a bit in that space for business owners? Yeah. So the conversation just changes from it being around individuals and families to it being individuals and their business partners. Yeah. And what we see in the business space is, you know, quite often,

You
59:09
couple of mates have got together, they've built a business out of their back bedroom, and all of a sudden, that's turned into something that is worth quite a lot of money. But they don't personally have the available funds to manage a situation where the business partner passes away, and they're now in business with the wife or the husband, and all the wife or husband's now asking for their shares to be bought out at some sort of premium rate. Yeah. And so we try to manage that through insurance with

You
59:35
benefits like life insurance and total and permanent disability cover.

You
59:39
And then there's also other ways that we can start to focus on business type clients where

You
59:46
they might be key stakeholders in the business and vital to the operation.

You
59:50
What happens if they're taken out of work? How do we make sure that business is gonna keep running, and how are we gonna make sure it's financially supported?

You
59:57
And there's effectively income protection type policies for businesses that allow for locums to go in, work in the business, make sure it keeps operating, make sure everybody else stays employed and everything keeps ticking over in the similar sort of capacity

You
60:11
while one of those stakeholders is out of work focusing on their recovery program and until they get back. Definitely something that people that are in business with somebody else should probably be thinking about. Right? Because

Me (Speaker 0)
60:23
all of a sudden, they could find themselves in a position where they're now buying back the shares in the business that they helped build or borrowing against their property,

You
60:31
to to clear out the the spouse of the business partner and going, holy shit. How did all this happen all of a sudden? And and it's not always your intention to go into business with your business partner's spouse, right, or their children, and that can quite often become very complicated.

You
60:45
And then there's a different opinions, and it just means that the business fight value might actually rapidly

You
60:51
decrease over time. So can a plan be created so if certain events are triggered, no one outcomes can be achieved, and then everybody's on the same program? You know, families are getting taken care of, business partners are being cared for,

You
61:05
and it's just a known quantity.

Me (Speaker 0)
61:07
Nice, mate. Well, who would have thought that insurance isn't as boring as accounting?

Me (Speaker 0)
61:12
And we can run through it out there quickly. Yeah. Awesome, mate. Thanks for having me in. Really appreciate it. So people wanna find you, Johnny. Where do they need to go if they need to get in touch?

You
61:21
Look. Best to look up our website, which is Insurance Market Collective.

You
61:24
Reach out to me directly on Instagram. It's probably a good approach. Just johnny at winstone, all one word. Yeah. Hopefully, you can tag me at the end of this pod, mate. Yeah. No worries.

You
61:34
But yeah. LinkedIn.

You
61:35
LinkedIn is always a good approach to.

Me (Speaker 0)
61:37
So yeah. And email address?

You
61:40
Just j.winstone@insurance-market.co.nz.

Me (Speaker 0)
61:45
Cool. I'll chuck some details into the show notes if people do need help in this space.

Me (Speaker 0)
61:50
Thanks again, mate. And I'm sure we'll have to, kick around some of these other topics because it's a it's a very big space and to be you know, to try and summarize all the work you've done in the last decade in in one year, doesn't do it justice. But I'm sure that would have got people thinking a little bit more about some of the things that they've probably been putting off. Yeah. Excellent, mate. Well, really appreciate you having me in, and it's great to actually be sitting in the chair and be part of the community, mate. You've probably listened to how many episodes now? Too many, buddy. Stick them up for us. Probably too many, mate, but they're always valuable, so I appreciate it. Brilliant.