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This is an extract from one of my "money manuscripts", which I thought I'd share.

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We hope that the above information (on what is a "very dry"
subject...except to "straight insurance types") may be helpful to you.

We all know that we are going to die someday but we don't know when!

The amount of life assurance depends on your need for protection and on the ability to pay for that cover. If you are a breadwinner with small children and a hefty bond commitment (like most ‘men and women in the street’) , you will require relatively high cover (far more than the young single person) to ensure that you and your family are adequately provided for in the event of untimely tragedy.

One way to think how much cover you need is to say:

“What would be the effect on my survivors if I were to die tomorrow? Could the household manage ? Consider what would happen if the spouse of the breadwinner had to "fall off their perch”? Would a childminder/housekeeper have to be brought in and could the breadwinner afford it? The value of a wife purely in terms of housekeeping costs has been estimated at around $1000 per week. So value your spouse “hubbies”!

Obviously, on death or permanent disability any income brought in by the spouse would be lost to the household.

Here are some requirements for one off capital sums:

* funeral expenses

* children's education

* to pay off a mortgage so as to leave survivors with debt-free property.


1. Calculate the required continuing expenses for the survivors on a work sheet.

2. Calculate what capital sum is required to produce that income (annually). Assume an interest rate to invest the capital. Your survivors will then be able to live off the capital leaving the sum intact .(As a bonus, cashing in the money at a later stage will take care of the effects of inflation). Ensure that there is additional cover to pay off all your debts, eg. mortgage bond, bank overdraft and credit cards (anything else ?).

3. Calculate the amount of life assurance you already have in place. This could be your own policies, bond cover, and group life cover under the company pension scheme.


4. Subtract the amount of life assurance available (step 2-3 above). This gives the additional assurance required.

This exercise should be done at least once a year with your insurance consultant or broker . Otherwise at any significant change in your financial circumstances, such as the birth of a child, buying another home, marriage, separation, and so on.

Disability insurance:

PS : Don’t forget about insuring your income...because your most valuable asset is not your home but your earning power. This is often neglected and is especially important for self-employed people. The replacement income policy pays out if you are unable to do your job as a result of sickness or accident. You have a choice of waiting period before payments commence - the longer the period ,the cheaper are the premiums. So first check how long your company would cover you under their plan. Premiums are cheaper for non-hazardous sedentary (nice word that!) occupations, like clerks, than explosive experts or top dresser pilots. They are unlikely to obtain disability cover.

It is advisable to have your benefits linked to inflation for a small additional cost. Lastly, premiums are generally tax deductible.


Employer subsidised schemes are excellent retirement schemes. Their big advantage is that your employer contributes to the fund on your behalf. Also the money is taken out of your pay cheque before you see it- very painless! In addition, there is usually group life cover (often 3 x annual salary together with income replacement cover). The employer pays for this as well as the administration costs of running the scheme.

The only disadvantage to a company subsidised scheme is that if you leave before 10 years , you usually lose the employer contributions and get a very low interest rate on your savings.

If you are invited to join the company scheme, you can count your financial blessings”. Jump at
the chance and shout “Eureka!” as you dance down the street!


A final word to sum up my thoughts on the value of life assurance...

Whatever you decide to do about your financial security, DO SOMETHING. PLAN for the future and let financial services products like life assurance work for you. They don't have to be such a "drag" or a painful nuisance to you and your family. One of the greatest human wants is a feeling of security and only life assurance can give you that peace of mind. As Winston Churchill once said so well :" If I had my way I would write the words 'insure, insure, insure' above every household door".


That is why it is LIKE A PARACHUTE...rather than an ambulance at the bottom of the cliff!

As Winston Churchill said so well (or words to this effect):

“If I had my way I would write the words INSURE, INSURE, INSURE on the door of every home .”

Great words from an indominatably willed inspiring man!

* * *


This article has been based on current New Zealand legislation. In terms of this, the proceeds of all life assurance policies are tax free when paid out to the policy holder; because tax has already been paid by the company on the investment income on an ongoing basis.

PS: I have written this article generally for all New Zealanders; but it could also apply just as well to Australians, Canadians, the English, South Africans or Americans. The principles are the same; only the tax laws are different in each country.

I hope it is useful in "demystifying "the mysteries of life assurance which are not really so complicated after all!

I hope that these articles help you on the road to financial independence and success.

All the best and happy travelling down the pathway to prosperity and happiness, the "staircase to your dreams".

"straight insurance man" Craig Lock

P.S: He leaned back in the chair as he told of stories long ago.

I had gone to the assisted living home to visit my uncle Arthur.
He is 88 years old and had just moved to the assisted living
home with his wife.

The place was fabulous. It was like a four star hotel.

As he leaned back he explained, "When my insurance bill came due
each year I often thought of canceling that insurance. But look
at what it's doing now," he said as he waved his hand indicating
the luxury that surrounded them.

I waited on them as they finished their meal. The menu was
posted on the board like a fine restaurant. They ate at tables
with real linen tablecloths. They had servers and a place name
for each of them at the four-place table overlooking the garden.

"Look at what it's doing now," he emphasized.

It was a MountainWings Moment.

Uncle Arthur said his insurance was $2,400.00 per year.
He explained how the thought tugged at him for years to drop
such an expense. Many would have. He didn't and look what it was doing now.

The insurance would pay their expenses as long as they lived.
If they lived to be one thousand, the insurance would pay
because Uncle Arthur had the foresight to pay the premium.

There is another place.
It's finer than Somerset Assisted Living in Atlanta.

It's finer than any five-star hotel.

It also has premiums that must be paid.

Some choose to pay the price of correct choices
and correct living,

....some let the policy lapse.

If you choose correctly, then one day, for the rest of your
days, days that will exceed one thousand years, you also will be able to say, "Look at what it's doing now."

....or maybe you just might say, "I wish I had listened when they
tried to get me to take that eternal life insurance."

- from MountainWings - The Daily Inspirational Email
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About the author:
Craig Lock has been involved in the life assurance field for many years (those were the days when he had "normal, proper job") before becoming one of those "rather weird funny arty/farty writer types".

Books by Craig Lock are available at: and

All proceeds go to needy and underprivilileged children - MINE!


Author's Bio: 

Craig Lock has been involved in the life assurance field for many years (those were the days when he had "normal, proper job") before becoming one of those "rather weird funny arty/farty writer types".

Books by Craig Lock are available at: and

All proceeds go to needy and underprivilileged children