Thorners Newsletter March 2010
In the current economic environment, the cost of day to day living continues to increase and we all need to regularly review our financial options.
Life Insurance Premiums:
Everybody dislikes paying premiums and the Life Insurance Tax Bill, which was passed by Parliament last year, is going to have an effect on the majority of NZ households who hold life policies.
In short there are proposed tax changes which will affect how life companies are taxed on their insurance products. Effective from 1 July 2010 all new life policies sold will be subject to these tax changes. Some companies have already started to increase premiums to make the change appear more seamless.
Existing “rate for age” or “annually reviewable” policies which are the most common products sold in the market will almost certainly have the increase applied and it is currently unclear on whether this will be applied immediately or grandfathered in over a period of five years so you need to keep abreast of the changes.
Competitions
Sovereign had a great pre Christmas holiday competition for all their clients and I am delighted to say that a Thorners client took away the prize which consisted of an $8,000 holiday plus $2,000 spending money. The client plans to take their children on a Surfer’s getaway adventure and to then have an adult only Irish experience. Thank you to all of you who entered and congratulations to our winner.
I am available to discuss your insurance and investment needs in what is a difficult time for many of us at the moment so feel free to contact me if you have any questions. My personal email is denis@thorner.co.nz or phone 04 528 8088.
I look forward to hearing from you.
Kind regards
DENIS.
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
Insurance Disclosure – a real example
Non disclosure on insurance applications is becoming an increasingly serious issue, both for the insurers and the clients who have subsequent claims declined or deferred in their time of need.
This link will take you to a TV interview giving both sides of an actual story and gives a very clear insight into what needs to be disclosed or discussed with your insurance broker.
http://www.3news.co.nz/Video/CampbellLive/tabid/367/Default.aspx
Our website www.thorner.co.nz contains other blogs in the case study category on non disclosure including a list of health issues often forgotten but needing to be mentioned on an application.
Call the Thorners team if you have any concerns over your insurance policies or if you wish to take out new life cover. We also operate an online life quote and application system – check it out today.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement.
Thorners
Winner – Best Trade /Service Business
Upper Hutt Business Excellence Awards 2009
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Click here to email Thorners or Call Us on (04) 528 8088
Winner Best Trade/Service Business – Upper Hutt Business Excellence Awards 2009
Denis Thorner of Thorner Financial Services Ltd was proud to accept the award for Best Trade/Service Business at the annual Upper Hutt Business Excellence Awards held on the 22nd July 2009.
From 25 nominations in the category, Thorners were noted for providing Service Excellence to their large client base spread throughout New Zealand.
Denis is also a qualifying lifetime member of MDRT, the worldwide premier financial services organistion that recognises excellence.
Denis and his team welcome your call regarding any insurance questions you may have. Home appointments are available from Wellington through to the Hawkes Bay.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement.
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
Transfering Australian Super to New Zealand – July 2009 update
The New Zealand and Australian labour, financial, and goods and services markets are highly integrated by international standards. Retirement savings portability is part of the Single Economic Market (SEM) work programme, which builds on our existing relationship and aims to reduce barriers that may impede the movement of people, trade and capital across the Tasman.
The introduction of retirement savings portability will support and add to the degree of integration between the two countries by allowing New Zealanders and Australians to consolidate their financial affairs in their country of residence.
When will the portability arrangements take effect?
The Minister of Finance and the Australian Treasurer have signed a Memorandum of Understanding that formally records the intention of both countries to allow for retirement savings portability. To implement the arrangements, legislative changes are required in both countries, which we expect to be in place around mid-2010.
What kind of transfers will be allowed under the portability arrangements?
- Savings that are held in a New Zealand KiwiSaver scheme may be transferred to Australia. This means savings in all other funds (including complying funds) or other retirement funds cannot be transferred.
KiwiSaver fund, including member tax credits and the $1000 kickstart from the government.
– The portability arrangements will be the only way of making a transfer of KiwiSaver funds to Australia. This means individuals will no longer be able to withdraw their savings as cash one year after permanently migrating to Australia. However, as noted above, you will be able to transfer the amount of member tax credits you have accumulated. The current KiwiSaver rules require you to return your member tax credits to the government if you withdraw your savings as cash.
- KiwiSaver funds can only be transferred to Australian complying schemes regulated by the Australian Prudential Regulation Authority (APRA). This means you cannot transfer your savings to an Australian self-managed superannuation fund. For more information on which Australian schemes apply, go to http://www.apra.gov.au/Superannuation/
- Retirement savings transferred from Australia may only be transferred into
KiwiSaver funds in New Zealand. This means Australian savings cannot be transferred into any other private retirement funds (including complying funds).
If I move to Australia, can I leave my savings in KiwiSaver instead of transferring them?
Yes. Transferring your savings to Australia when you emigrate is optional. However any contributions you make to your KiwiSaver account while living offshore will not be eligible for member tax credits.
If I transfer my savings to Australia, when will I be able to access them?
You will be able to access your KiwiSaver funds at the age of entitlement to New Zealand superannuation. Currently this is at 65 years of age. Any earnings on these KiwiSaver funds as well as contributions made while in Australia will be subject to all Australian rules regarding access to funds.
Which country’s rules will apply to savings transferred between the two countries?
In general the rules of the host country regime will apply. However there are certain differences that will be applied to transferred savings in order to protect the integrity of the respective regimes. These differences apply only to the savings that are transferred, and not to any subsequent earnings on these transfers.
The key differences are set out below:
New Zealand KiwiSaver funds transferred to Australia:
May not be accessed until the New Zealand age of retirement (65 years).
May not be transferred into Australian self managed superannuation funds.
May not be transferred to a third country.
Australian funds transferred to New Zealand:
May not be accessed until age 60 and the individual satisfies the Australian definition of retirement at that age.
May not be used to assist with the purchase of a first home.
May not be transferred to a third country.
If I transfer savings from Australia, can I use those funds to put towards buying a first home?
As noted above, funds transferred from Australia will not be able to be used to buy a first home. This is consistent with Australia’s policy regarding superannuation funds. In addition, any savings transferred from Australia will not count towards your eligibility for the deposit subsidy. For more information on the housing-related initiatives of KiwiSaver, go to
http://www.hnzc.co.nz/hnzc/web/rent-buy-or-own/home-loans/kiwi-saver-homeownership-features.htm
How will these different rules be applied to transferred savings?
Any savings transferred between the countries must be separately identified within an individual’s retirement savings account.
Can I transfer my savings to Australia even if I don’t emigrate there?
You can only transfer funds to Australia if you permanently emigrate. Before transferring your funds, your KiwiSaver scheme provider will require proof that you are
residing in Australia.
Can I transfer some savings to Australia and leave some in New Zealand?
No. If you choose to transfer your savings to Australia when you emigrate, you must transfer them all. This avoids the proliferation of small and inactive accounts which are costly to administer.
If I transfer savings from Australia, can I withdraw these for reasons of significant financial hardship or serious illness?
Yes, so long as you meet the relevant conditions of release contained in the Australian Superannuation Industry (Supervision) Regulations 1994.
It is not compulsory for scheme providers to transfer or receive funds to or from Australia. However KiwiSaver members are able to transfer their savings to a KiwiSaver scheme that does offer this facility.
Do I have to transfer my savings if I move to Australia or vice versa?
No, the arrangements are voluntary.
Will New Zealand tax any transfers from New Zealand to Australia or vice versa?
No.
Will Australia tax any transfers?
Australia will not specifically tax the transfer of retirement savings to or from New Zealand. However at the initial point of entry into the Australian superannuation system, transfers of New Zealand savings will be subject to Australia’s rules regarding the taxation of retirement savings contributions greater than $150,000 per annum. This is known as the non-concessional contributions cap. Australian-sourced retirement savings, and any New Zealand-sourced retirement savings re-entering Australia, will be exempted from these rules upon re-entering the Australian superannuation system.
For more information on this cap go to http://www.ato.gov.au/superfunds/content.asp?doc=/content/00106372.htm&page=6&H6
Is there a difference in the rate of tax on earnings between Australia and New Zealand?
Yes, Australia has a flat rate of 15% on earnings. From 1 April 2010 the New Zealand tax rate on superannuation earnings will range from 12.5% to 30%. It is also not traightforward to make a comparison between the two tax regimes because of other factors. For example Australia also taxes capital gains on equities whereas New Zealand does not tax capital gains on Australasian equities.
There are also other advantages to transferring your retirement savings to your country of residence such as being able to consolidate you financial affairs and not pay multiple sets of fees.
Any changes to your Australian Super schemes require specialist advice so talk to us first. We service clients NZ wide so contact us for information today.
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
Sun Super Industry Superannuation Fund Australia
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Click here to email Thorners or Call Us on (04) 528 8088
Understanding Life Insurance Premiums
While paying for your protection benefits can seem pretty simple – the regular amount required is deducted from your bank on the due date – the reality is that there are a number of different premium structures on offer and if you are not aware of how your particular premium structure works then there may be some surprises for you in the future.
Lets look at the most common premium structure known as YEARLY RENEWABLE TERM or RATE FOR AGE.
This structure often represents the cheapest premium option in the first year.
The structure allows for annual, age related increases in premium so you pay an increasing price each year in conjunction with the life assured’s increasing age.
The structure also allows the company to pass on any increases or decreases in the underlying rates for age on the next policy anniversary following the rate change. this means that the future premium illustrated to you at the time you purchased your policy were estimated based on the underlying rates that were applicable at that time and are not guaranteed. Future premiums may differ from those illustrated according to the company’s actual experience of claims and persistency.
If you select an annually reviewable premium structure, you should be expecting your premiums to increase each year on the policy anniversary date.
Many people also choose the CPI Increase option to retain the true value of their benefits.
Because the premiums are increasing, the premiums payable for the benefits you have elected to CPI index will also increase by the inflation rate. these CPI increases in benefits and premiums will take effect on every policy anniversary.
There are options and we recommend that all clients also consider a Level premium option to provide certainty in the future.
Contact Thorners to discuss the premium options available to you. We offer a New Zealand wide insurance service and applications can also be made online for Life and Health cover from the link on the Thorner website.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
20% extra Life Insurance for free for a very limited time
For some time Sovereign has been concerned about the level of under insurance within New Zealand. Over the past few years personal debt levels, and therefore the need for adequate cover, have significantly increased but sales of insurance have remained relatively flat. This situation is likely to get worse with the current recession, where affordability not only impacts on people’s ability to purchase insurance, but also causes them to reconsider the need for the cover they already have.
Today Sovereign announced a new initiative to help customers afford appropriate levels of new insurance.
From 21 April, and until 31 July 2009, Sovereign will provide new customers who take out Rate for Age Life Cover an additional 20% of the sum assured free of charge for two years. This is up to a maximum additional amount of $100,000 sum assured per customer, not per policy. For example, if the customer were to set up a TotalCareMax policy with $500,000 Life Cover, they would receive an extra $100,000 sum assured free for two years. At the expiry of the two year period the additional 20% sum assured Life Cover will automatically end.
This special offer is automatically available on all TotalCareMax Personal and Business Life Rate for Age policies (including Voluntary Workplace policies) issued by Sovereign on or after 21 April 2009, until 31 July 2009.
Existing customers who make increases to their Life Cover will also benefit from the offer, but the increased amount will be set up as a separate policy. Replacement business is excluded from the offer.
Use Thorners online application process on the web page or contact us very soon to apply for your new life cover today and benefit from the 20% extra cover while the offer lasts.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
Supergold Card Holder Discount Offer Coupon
Thorner General Insurances Ltd offer 10% discount to all Super Gold Card holders New Zealand wide on any Ansvar Insurance Fire and General Policies for personal home, contents and car cover. This discount is over and above the already competative over age 55 age discounts already offered.
Please quote this blog when requesting your insurance quote.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
Could you financially survive a medical trauma?
Could you financially survive a medical trauma?
· Could you require funds to replace or supplement income if you were seriously ill?
· Could you require funds to cover replacement staff?
· Could you require funds to meet HP’s and the ongoing mortgage payments?
· Could you require funds to make alterations to the house or to change vehicles?
· Could you require funds to retrain for new employment?
· Could you require funds to assist with household chores that may no longer be possible?
· Could you require funds to pay for a dialysis machine at home?
These are a few of the reasons to have funds available to help give you ongoing quality of life and some financial resilience to the pressures you may incur in your time of need.
Every year about 7,000 people in NZ have strokes and whilst many survive, they often have an impaired level of conciousness and mobility. Thats nearly 20 people per day so the odds are not great and thats only one medical condition.
We need to talk if you don’t have a large nest egg available to meet unexpected expenses if you were to suffer a medical trauma.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
