January 25, 2026 • 38 mins
As you get older, your health becomes more and more of a worry, so life insurance seems like a no-brainer. But is it? Do you really need it after the mortgage is paid and the kids are on their own?
And what policies are must-haves, against ones that are just nice to have?
Financial Author Martin Hawes joins Tim Beveridge to give his insurance advice and explain the pros and cons of different policies.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News talks'd
be well, would they?
Speaker 2 (00:11):
You know they if they if they're five million dollar
house burned down, then check for five five million. I have
no problem. Why would they pay for insurance. That's a
risk they can afford to take. But for the vast
majority ninety nine point nine percent of us, we need
to ensure the house. We need to ensure the contents
(00:33):
as well, because there's several hundred thousand dollars usually tied up.
And then one of the interesting ones is life insurance,
which is a real misnomer of course, because you're not
really ensuring a life. You don't get your life back
if you die and you've got insurance unfortunately. But I
think the two circumstances where I think young people or
(00:57):
younger people really need life insurance is when they have mortgages,
bankle and systems anyway, but we well they may insist
and children because really one of a coupled eyes, let's
keep it simple, one of a coupled eyes. Let's say
(01:18):
he dies, she's left with the house, with a mortgage,
a couple of children maybe to look after, and therefore
it's hard for her to earn a living to pay
for that mortgage, and her life's turned completely upside down.
So I usually say to people with a house with
a mortgage that you should ensure, but either the amount
(01:41):
of the mortgage so you're no longer pay you'd get
paid out on the moor equivalent to the mortgage, or
enough to keep you going for at least a couple
of years. Ideally I would like box. So if you
had a five hundred thousand dollars mortgage and it was
going to cost you fifty thousand dollars a year, you
(02:01):
ensure the five hundred thousand dollars mortgage plus one hundred
thousand two years of fifty thousand, So that'll be six
hundred thousand dollars of life insurance that I've been looking.
Speaker 3 (02:11):
At, say five hundred thousand to cover the mortgage, and
what's the other lot for just a bit of.
Speaker 2 (02:15):
Spiking, just to get you through, I mean, get you
through those side. Maybe suddenly, and she's absolutely even if
it's not sudden, she'll be absolutely shocked. She'll be in grief. Yeah,
she won't want to go work, She want to stay
close to home, she wants to stay close to the children,
and the children will have their own issues. They have
(02:37):
a couple of years where you can just say I
don't have to work. I think it is absolutely critical.
I've seen that all like that.
Speaker 3 (02:45):
Actually, regardless of the status of our spouses, it's like
a couple of years not to work.
Speaker 2 (02:50):
Yeah, somebody who was older, who was living off their
savings getting into Trooper. A couple like that, No, they
probably don't need it because they can the survivor can
carry on living on the savings and carries on getting
into Trooper, albeit at a lower rate.
Speaker 4 (03:07):
Of course.
Speaker 3 (03:07):
See, I've probably been a bit of responsible. I don't
think we've got life insurance. May are insurance. Our mortgage
is getting down where it's not going to frighten the horses,
you know, to have.
Speaker 4 (03:15):
To cover it.
Speaker 3 (03:16):
But I actually I don't want to credit one of
my parents on this. But I think somewhere along the line, someone,
and maybe it was TV, that every dodgy character in
TV sort of murder mystery was life insurance salesman, and
I had a I probably developed a prejudice. I thought
life insurance is the equivalent of would you like fries
with that mortgage?
Speaker 2 (03:37):
Yes, yeah, there was I need.
Speaker 3 (03:40):
To adjust my attitude Martin, because I probably still have it.
I sort of think, oh, I don't know. I sort
of think if I died in a nasty accident, okay,
acc had covered something.
Speaker 2 (03:53):
M hm yes, So I asked the question, what I've Yeah,
and let's say it wasn't a nasty accident, so acc
went there. It was a sudden and completely unexpected heart attack,
unlikely but as possible. Then what you know, what if
that happened? What happens almost we can't say what happens
(04:13):
to you?
Speaker 3 (04:14):
Yeah, I'll start to get a little bit tense. Yeah, yeah,
m hmm.
Speaker 5 (04:22):
It is.
Speaker 3 (04:23):
It is a difficult one, isn't it, Because you know,
there's there's there's be a point I guess in your mortgage.
So if you've got a half a million dollar mortgage,
you'd be we probably should have had life insurance. Yes,
but if you're doubt, if you're down to you know,
if you've paid most of it off, then there's a
point would you have to I mean, if you've got
a bit to go, it's to be honest, there's a
(04:45):
nice to I think we're in the situation. Would be
a nice to have, Like if if my wife passed
away or I passed away, there'd be the shock, and
but we'd cope. As opposed to it's eight nine years ago,
it would have been an absolute disaster. I mean, putting
aside obviously grief, we're not trivializing that side of things.
Speaker 2 (05:05):
And tim, you wouldn't want to come into work the
following Sunday or any any of the day probably, And
I'm not sure what your wife does, teacher, she she
probably wouldn't want to, you know, pack a lunch and
go off to work the next day either, So she's
going to You're both going to have a fair bit
of time off work, and especially if the children are
(05:25):
younger and or even teenagers actually, because they often express
their grief in a pretty difficult sort of way, because there.
Speaker 4 (05:33):
Being some people who might be listening.
Speaker 3 (05:34):
Young couples will be like, look, we bent over backwards
to buy our first house, were mortgaged up the ying yang.
There's just no blooming way we can afford it. It
is a really difficult equation, isn't it. Because you're saying
what if and they say, I don't know what. The
response is, well, it costs money.
Speaker 2 (05:53):
Yeah, and it really does. Cost money. I guess the
likelihood is is low, but the impact is high.
Speaker 4 (06:04):
Any One isn't it try that it's.
Speaker 2 (06:06):
Not probably not going to happen, but if it does,
it's it's pretty severe.
Speaker 3 (06:10):
Did you what was your approach to life insurances throughout?
I mean, you're still cranking on strong climbing mountains. Gosh,
by the way, sorry, I meant to mention at the start.
I don't want to divert it, but we did mention
how Alex Honold, the climber has just succeeded about an
hour or two ago and climbing the five hundred meter
building and it's insane stuff for the skyscraper. But anyway,
(06:33):
I imagine he I don't know if he could take
out life insurance.
Speaker 2 (06:35):
Good he I don't not for doing that anyway, get
life insurance for a heart attack. But most insurers blank
out the hazardous pursuits stuff, so you couldn't.
Speaker 4 (06:48):
So you are okay.
Speaker 3 (06:50):
So I mean, because that's one of the things in
life is that we like to undertake risk as young people.
So they might say, okay, well, if you go skiing,
climbing or aggressive mountain biking or bets are.
Speaker 2 (07:00):
Off, maybe skiing would be okay. Maybe aggressive mountain bike
would be okay. That'd be now there'd be more about
injuries rather than death. Climbing the certainly dema hazardous pursuit. Diving,
I think, is the other one. Hemingway would have said
that bullfighting, mountaineering, and there was a third one that
(07:24):
he said were the only true sports. Motor racing was
the other one.
Speaker 3 (07:29):
Funny, it's weird that you mentioned bull fighting because some
reason my social.
Speaker 4 (07:33):
Media fees feed is clogged.
Speaker 3 (07:35):
Up with idiots running away from bills and getting skewered
because I watched one. So what was your approach to
have you always had that? I mean, it's one thing
to talk about it, but what was? And you can
share as much or as little as you like about
your own personal circumstances, but what was your approach as
a young man through your life to life insurance?
Speaker 2 (07:55):
We certainly had it early on with the children, and
I don't know now. I suppose we don't have landlines.
But in those days, life insurance agents would get the
telephone book out of an evening, start with the a's
and just make cold calls so somebody would ring, and
life life insurance especially is usually sold to people. Ah,
(08:19):
life insurance agents are actually extremely good. They're very clever,
they're very well informed, they're very good at what they do.
But a lot of them are there just for the commissions,
and the commissions are high, and so they are out
there selling.
Speaker 3 (08:37):
Well, that's the thing. So you just you've just answered
my question. I remember why I formed the prejudice against it,
because my childhood was full of my mum answering the phone,
going no, thank you, not today, and then telling me
what it was. And I just formed this prejudice that
none of what was to be trusted. And you're saying
many people should have it.
Speaker 2 (08:57):
Yeah, yeah, some of them should be trusted. Life insurance
are different. It's a different beast now because you when
you take out life insurance, it's like car insurance. You
are ensured while you pay the premiums. As as soon
as you stop paying paying for it, the cover stops.
Whereas in the old days you can last. Yes, you'd
(09:20):
build up a lump sum because they had a bit
of investment attached to them, and this was largely for
tax purposes. You could claim I think was fourteen hundred
dollars on a life insurance premium, and a fair chunk
of that fourteen hundred dollars was actually going into a
savings account. But that doesn't happen anymore, and they're not
nothing like as complex as they used to be. People's
(09:43):
circumstances can be quite complex as to whether or not
youly life insurance or income protection and so forth. Some
people need the whole suite of these things, and boy
that can add up. But then again, I've seen people
like you know, doctors, have severe injuries, they can't ever
work again, and they claim for the rest of their lives.
Speaker 3 (10:06):
Which brings in the what if, I guess, because if
you are a high income earning individual and you you
have a life that is supported by that high income,
then the what if is, well, probably, if you're a
high incoming you should probably set aside some of that
high income for for life insurance and income protection insurance.
Speaker 4 (10:23):
Or something yep.
Speaker 3 (10:25):
Whereas if you're on the bones of your butt, it's
a bit more of a challenging proposition, isn't it.
Speaker 2 (10:30):
Yes, yes, it is. I think I just keep coming
back to that what if you see you never well,
the population as a whole doesn't win on insurance insurance
is not about winning because you don't really want to die,
so you can say.
Speaker 3 (10:45):
Well, aha, my insurance is worth it.
Speaker 2 (10:48):
You know, that's what That's why I only paid five
hundred dollars of premiums and now I did, and you
know we got half a million dollars for so that
would that would kind of be a win. But it's
not much of a not much for a win. So
the insurance companies they've got the Yet you see that
people who work these work the numbers out. They've got
(11:09):
the numbers on their side. You know, they set the
premiums across a population. They're going to make money out
of it, so you're helping them make money. So you know,
I wouldn't over ensure, but I would be ensure to
the level of comfort when you've asked what.
Speaker 3 (11:29):
Yeah, because the mortgage one is I mean some banks
offer it too, don't they. I think as part of
it they say, look, we have a life a mortgage insurance,
protection insurance. In fact, you can probably do it all
through your bank, just about could you know?
Speaker 2 (11:41):
I'm not sure, yes, I think you probably could now
because I don't have a mortgage and I haven't had
one for twenty or thirty years. I'm not sure about that.
I'm not feeling and you're not begin all that much.
You're not playing the Warren Buffett card and saying it's
(12:01):
funny because I was the latest book that we've talked
about it before. What I'm ready that one. I was
actually writing that and sort of posing the question, would
are extremely wealthy billionaires and so forth ensure their houses?
And plural is important there. And shortly after I wrote that,
(12:25):
I read an article by Charlie Munger, who is Warren
Buffett's business partner, saying that he and Warren don't ensure
their houses.
Speaker 3 (12:35):
Actually, I don't know why you wouldn't insure it, because
it just be a convenience, wouldn't it. I mean, I mean,
let's face it, Warren Buffet's house five million would be cheap.
I imagine he's got a fairly flash house. But why
wouldn't you insure it you can afford to?
Speaker 2 (12:48):
Well, I don't think. I don't think Warren Buffett's house
is all that flash, or at least one of them.
He may have marble ones. The reason he wouldn't ensure
it is because he's likely more likely than not to
lose on the deal. Warren Buffett doesn't like losing on deal.
So the whole career he's been a winner. Yes, yes,
(13:11):
threemiums are unlikely to be less than Yeah, then any payout.
Speaker 3 (13:20):
Okay, Look, we love your cause on this. On insurance,
the choices you've made, what are the how have you
balanced the As Martin Haws has mentioned, you know the
what if scenario? What if something happens, what happens with
your family and your loved ones?
Speaker 4 (13:35):
Do you is that something?
Speaker 3 (13:37):
Is it something you have to afford the what if?
Or do you just go whatever it costs, I'll do it,
and I guess Look, here's me being a hypocrite. Hypocrite, No,
I have health insurance, and health insurance for a family.
When you get over the age of fifty starts getting
pretty expensive. But I think, what if and as you
(13:58):
get older, what if you need a new hip? What
if you need a new this? And so that's the
choice I've made. But as for life insurance, what's that?
Speaker 4 (14:06):
What are the choices you have made? And how do
you balance it out?
Speaker 6 (14:08):
Oh?
Speaker 3 (14:08):
Eight hundred eighty ten eighty text nine two nine two
will be back with some calls and your texts in
just a moment with Martin Hawes. By the way, I
should say, author of Retirement Ready. And before we go
to the break, you just launched it before Christmas, in
you Martin.
Speaker 2 (14:24):
It it was about October. I think in October, how's
it going? It's sold extremely well. And I was in
a couple of bookshops part of Christmas and it was
obviously selling pretty well in the book shops even for Christmas.
Number our people who give their partners and children and
(14:44):
people like that books on finance.
Speaker 3 (14:47):
Actually, one does wonder if for sixty fifth birthdays people
get Retirement Ready and they go, I should have had
this fifteen years ago. Okay, we'll be back in just
a minute. It's twenty five past five News Talk SB. Yes,
welcome back. This is smart money. We're talking about the
(15:09):
choices you make on insurance. How do you balance that
must have you know what if versus you know what?
Can we afford?
Speaker 5 (15:15):
Oh?
Speaker 3 (15:15):
Eight hundred and eighty ten eighty. My guest is Martin Hawes,
author of well lots of books. The most recent one
is called Retirement Ready. Right, let's get it.
Speaker 4 (15:25):
By the way, Warren Buffett.
Speaker 3 (15:26):
Is living in the same house that he bought for
thirty one thousand dollars years and years ago, and I
googled it's a lovely looking house. But and he does
he eats the three dollars fifteen bargain breakfast breakfast at McDonald's.
There's something I want to dig into, something you said
about him and the fact that he does go for
the bargain all the time, which you wonder how much
(15:46):
further we'd all be ahead in our lives if we thought,
are we winning in this transaction or losing? Interesting thought,
isn't it, Peter?
Speaker 7 (15:53):
Hello, God, I have to know.
Speaker 8 (15:55):
And I've heard lots of stories people canceling their insurance
and a week later they're either dead or need a
medical claim or whatever too late. And the other thing is,
I've heard people have insurance, but sometimes they lacked the
due diligence, like leaving car keys out, or the worst
one I heard is a house burnt down and this
(16:17):
extramarital affair was taking place. The pillow was put on
the lamp at court fire. They put the pillow in
the bathroom, went back into the bedroom in their bathroom
court fire, the house burnt down. The insurance said, well,
you didn't take due care to make sure the fire
was out, So we're not paint.
Speaker 3 (16:35):
Well, indeed, what insurances have have you chosen for and against?
Speaker 4 (16:40):
Peter?
Speaker 8 (16:41):
Well, I have health insurance, which I wonder about because
the price keeps going up. And then friend was thinking
of canceling as and then it was one hundred and
twenty or two hundred thousand for his prostate cancer or something,
and they decided not to canceland. Then the thing that
I worry about, not for me, other people is when
(17:02):
what's the crossover you can have life insurance or one
thing or critical care or loss of income or what's
the other one? When you have a health issue like
diagnosed with cancer but you're still going to live that
sort of cut off? You know, when would life insurance?
When would if you only could afford one and you
have the choice of those two, how would you make
(17:25):
that choice?
Speaker 4 (17:26):
Well? Have you made any choices in that regard?
Speaker 7 (17:28):
People?
Speaker 5 (17:29):
No?
Speaker 8 (17:29):
No, no, no, I'm just asking what what what what
would be the would there be an age, would it
be an income? What what would be the termination or
family history or what would be the termination of you know,
of what people would need in that regard because if
they're working, for example, they might qualify for acc if
(17:49):
they have an accident, But if they don't have accidents,
well that's you know, there's no no things there.
Speaker 3 (17:55):
So yes, because actually, to be honest, whether you get
hit by a car or a virus, it's still an
accident from your own point of view, but one is
not deemed to be an excellent one is Yeah, what
are you any comment?
Speaker 2 (18:06):
I think, first of all, when you come to those
people who cancel their health insurance and then a week
later find that they need some treatment, I'm in that basket.
A couple of years ago I canceled my health insurance
and it wasn't a week. It was about a month
or two months or something. I was in getting some
(18:30):
some surgery done and they found postate cancer and they
had to do another operation and so forth, and then
I had radiation and so forth. Was that the radiation
and the public system. So some of my treatment was public,
and you know, some of it I just paid for myself.
Speaker 3 (18:49):
Was that to expedite was that to expedite treatment. So
it's like missing around here, let's get into it.
Speaker 4 (18:54):
I'll pay it.
Speaker 2 (18:56):
No, No, I paid for it because yes, well I
just the first one was just I don't think would
have been done. And then once the first one is done,
they need to come back and do a second one,
so that needed to be the same surgeon and so forth.
So that was okay. When it comes to income protection
(19:16):
versus life insurance, income protection is often very expensive because
if you look at it from the insurance point of view,
it's it's a big liability. So they are promising to
pay the salary for maybe forty years or something, usually
through throughout age sixty five, and I think you're often
better with just a lump sum, and it's kind of straightforward.
(19:41):
What that doesn't cover you with. Of course, that's completely different. Covers.
One covers you for deaf but not injury, whereas the
other covers you or your own goodness, whereas the other
covers you for illness but not not death. But life
insurance is the big one. I think that's that both
(20:03):
can hugely dislocate life lives, changed lives enormously. But I
think death is the really big one because I've seen
that so much more often than I've seen debilitating injury illnesses. Sorry,
not insurance.
Speaker 3 (20:18):
Interesting, it's called life insurance and not death insurance, isn't it?
Because really it's death insurance. But that's not so sellable
the language of marketing.
Speaker 4 (20:29):
I love it.
Speaker 2 (20:30):
I would leave you to go.
Speaker 3 (20:34):
I mean, isn't it it is? It's just it's just
the way it is, isn't it because you're actually selling
death insurance. But you imagine the meeting where they first
proposed us. It's like, I've got this great idea of
death insurance, and then someone went, hey, what if we
call it life insurance?
Speaker 4 (20:50):
And they like it?
Speaker 2 (20:51):
Get away with that.
Speaker 4 (20:54):
Take your by the way.
Speaker 3 (20:56):
I mean, I don't want to to get onto serious issues.
But did you have a moment of sort of black
humor when you when you got your diagnosis, thinking it's
to and just counter my health?
Speaker 2 (21:07):
Yes?
Speaker 8 (21:07):
I did.
Speaker 2 (21:08):
Actually, well you know it's a stroke of your shoulders.
Really them the breaks. And I funded my own health insurance.
I put a fairly large amount of money away and aside,
and that's my health bucket. And I just stipped into that.
Speaker 3 (21:27):
Do you keep an eye actually since you do that,
because some people say, look, if you if you've got
the patience and you trust that you're not going to
get anything stick the health insurance money into a you know,
into a compounding sort of investment, and then eventually it'll
start to be something you can rely on. And yet
it's still there. If that'd be very rare, wouldn't it.
Speaker 2 (21:46):
Yeah, see that should work.
Speaker 4 (21:50):
You've got a way ten or fifteen years.
Speaker 2 (21:52):
For the insurance and so forth, so you know, the
premiums are likely to be greater than the actual claim.
The problem is that eventually may come sooner, and my
eventually came. So, I mean, I was just going to
start putting the premiums into a bank account, and then
I thought what happens if immediately I need surgery or something,
(22:14):
And so I properly funded. I put a lump sum
into a bank account. And in the book I actually
detailed this because I thought it's a reasonable thing for
those who are well off, because I get more emails
about health insurance than just about anything else. Now, these
are people of my age, the people in their sixties,
(22:36):
seventies and eighties, and the premiums start go sky high.
I know, it's a good reason.
Speaker 3 (22:43):
You like to think there's a bit of a balance
there that you're not trying to you know, you're literally
not putting a deposit in the next couple of years
on the inevitable hip operation.
Speaker 4 (22:51):
But it's or or not. It's an interesting one.
Speaker 3 (22:55):
I think my insurance health insurance has actually paid for
itself with a couple of things. But I sort of
feel I'm winning. Warren Buffet would be pleased with me.
It's in your winning currently famous last words, John, Hello, Yeah.
Speaker 6 (23:10):
By Tim? How are you good?
Speaker 4 (23:11):
Thanks?
Speaker 5 (23:12):
Oh? Good?
Speaker 6 (23:13):
I've I had a whole of I've got a whole
of life insurance policy. I started when I was eighteen.
I'm now approaching sixty five. The mortgages paid the money
in the bank. I'm thinking, do I need to continue
with the whole of life policy? What's the advantage to
keeping it up? What's the advantage to canceling it? I mean,
(23:36):
it's a minimum amount about one hundred and forty dollars
and then one hundred and fifty dollars per inum so parana.
Speaker 4 (23:43):
Yeah, oh that's not much of that.
Speaker 6 (23:47):
No, not not to be out laying.
Speaker 3 (23:48):
No, But can I just ask is that be one
hundred and forty dollars forever? Or is it changed over time?
Speaker 6 (23:54):
Oh, it's changed over time. It was seventeen a month anesday.
I listen that.
Speaker 3 (24:00):
So what happens if you if the policy gets activated?
Speaker 4 (24:02):
What are you? What are you or your family looking at?
Speaker 6 (24:06):
You get some insured plus in your bonuses, okay, what
they call a terminal bonus. But I'm just wondering whether
necessary to keep going. And it's not going to save
a lot of money, but something else.
Speaker 4 (24:25):
You want to know what Martin reckons?
Speaker 2 (24:26):
So do I Martin, Well, John, I'd take that to
a disinterested and unbiased broker and get an opinion. My understanding,
I haven't heard anybody use the term whole of life
insurance for a long time. He's a very old and yes,
(24:53):
so I'm I'm not completely up to date on them.
But the old thing was that they weren't bad policies
as long as you kept them going. They worked out
pretty well because they're quite good bonuses with them and
so on. So I think that would be well worth
taking it to somebody. Now, it may be relatively I
remember my dad buying one for me when I was
(25:16):
four or something, and me putting a week cross on
there to sign the documents and so forth, and then
cashing the thing in when I was about fourteen or eighteen,
or something, but who knows what's there. It would be
well worth getting somebody who's expert on this stuff to
(25:37):
give you an opinion.
Speaker 3 (25:39):
You need to know how much money is at stake
and what's because one hundred and forty bucks a year
is not much, you know, Well, the.
Speaker 6 (25:45):
Total benefits now are about fifty thousand. Yeah, about to die,
So there's over twenty thousand dollars and bonuses.
Speaker 4 (25:55):
And can you get those?
Speaker 6 (25:58):
That's what I don't know. I'm not sure about something broke.
Speaker 3 (26:01):
I guess you could even just ask to ensure what
happens if I cancel this? They would have to tell you,
I mean they can't fit. Yeah, true, Yeah, it's worth
thinking about it though. At least we've had the conversation,
you know.
Speaker 2 (26:16):
And you know John that if you're in a ruler
through that I'm not sure how many decades you've actually
had this thing for, but if you're in a ruler
thrower to get fifty thousand dollars from putting one hundred
and forty dollars a year, that may may be actually
have been a really good deal to take out, and
(26:38):
it may be a good thing just to keep it going,
and it just then when you do die, it goes
into your estate and your children or grandchildren or whoever.
Speaker 6 (26:48):
The intention that that money would cover a funeral and
whatever it was left of. How the mortgage is gone
and there's money in the bank to cover a funeral.
Speaker 3 (26:58):
So yeah, well it sounds like you're talking yourself towards
one direction. You just need to find what if there's
anything you can get out of it if you cancel it. Yeah,
if it's twenty grand to be had, I'd think I
know what I'd be doing.
Speaker 4 (27:10):
Seen it?
Speaker 3 (27:11):
What's that line from Blank Black at I seen it?
Pinched it, spent it? Anyway, I don't know why I
quoted that, but it's a bit of a random thing.
Speaker 4 (27:20):
Anyway.
Speaker 3 (27:21):
We take some more calls in the moment, and we've
got lots of texts on this, on the insurance choices
that you have or haven't made, versus you know, the
nice to have versus the must have, or the what
if could what? You know, how would life be if
something happened to you? Would your family be in a
situation where they could cope? It's twenty to six News
(27:41):
TALKSIDB Yes, gosh, time's flying by talking with Martin hare
was about life insurance, amongst other things, and the choices
we make. I eighte hundred and eighty ten eighty David.
Speaker 7 (27:52):
Hello, if this is the David, did you wanted to
speak to a year? I'm not saying hello too.
Speaker 4 (27:58):
It's you.
Speaker 7 (27:59):
It's good, Yeah, it must be. I'm privileged actually because
it's a good subject. And I'll give you my example.
And I'm seventy almost seventy four, and my insurance gets
regularly updated and my wife pays for it, and we
(28:20):
come up with the last one and I thought, my
life is not worth sixty thousand and so, and I
worked it out and it pays my rates. If I didn't,
we didn't pay that dumb amount to you know, it
wouldn't matter. I mean, we'll just be paying our rates.
(28:41):
And that's what I said to you.
Speaker 4 (28:42):
So you worked out it wasn't I must have?
Speaker 5 (28:44):
Then?
Speaker 7 (28:46):
No, absolutely not. I mean because I've got cash in
the bank anyway if necessary, you know. And I told
you you've got a car and put some pieces and
you know, so.
Speaker 3 (28:54):
What are the insurances that matter to you?
Speaker 5 (28:57):
Well?
Speaker 4 (28:57):
Nothing, in my view, car, health, house.
Speaker 7 (29:02):
Well the car is probably the most important house. Yeah,
but definitely but the sections always you know, you've gave
an example before. So Martin, did I think about a
house that with half a million and gets destroyed? Well,
there's always, there's always the land, and the land's often
(29:22):
worth a lot more than the house anyway.
Speaker 2 (29:24):
So Martin, you anything you'd like to add, you're certainly
right there. But I mean, you know, the land does
usually left there, and it is only the house that's
ensure that. You're only ensuring the house. You're not ensuring
the land e QC I think, or whatever it's called now,
(29:44):
they ensure, They ensure the land to some extent for you,
for you, So you're only paying a premium for your
house insurance for the actual bricks and water.
Speaker 7 (29:58):
Yeah, well we're on the same page, I think, Martin,
because you know, it's basically it looks like to rip
off from where I'm sitting because instead of paying the
premium for my life, and I've got enough cash to
cover it anyway, so so you know, why why not
just use it to pay the rates?
Speaker 4 (30:18):
Okay?
Speaker 2 (30:19):
See, I think I'm not not a historian, but I
think this is why many of these insurance insurers, and
I'm thinking particularly of a MP and also National Mutual,
it's the name from way back. They started life as mutuals.
They were cooperatives basically. Now they morphed, well a MP
(30:42):
bought EXA or National National Mutual eventually.
Speaker 6 (30:46):
But.
Speaker 2 (30:48):
They morphed into four profit businesses. But they started as mutuals.
Speaker 4 (30:55):
What's a mutual actually mean as well?
Speaker 2 (30:58):
Just as like a co op. So it's just a
bunch of us getting together and saying, well, let's let's
because insurance works by people calling collectivism. Yeah, yeah, collectivism,
that's right, so that you know, we all pay premiums.
Speaker 4 (31:11):
But it's pay for our health system.
Speaker 2 (31:14):
But no, only you know, if we if we all
get together and pay premiums, only one of us sties
this year, and then somebody else dies next year and
so forth. So then the payments and unless there's something
really bad happens in the country, all the payments are
unlikely to come together. And that's the problem with my
(31:35):
health insurance, looking after my health insurance myself. Unless I
fully funded it, I don't know when it's going going
to occur. And it's collectivism, it's it's a whole bunch
of people insurance. When when these things turn into four
profits you're paying not only for the payouts for their
for their claims, but you're all paying for all their costs,
(31:59):
and you're also paying for their profit. So and the
only place that those money can come from, those costs
can come from it is your premiums.
Speaker 3 (32:08):
It's been interesting to know if you put all the
money that's spent on private health insurance into the if
that money was available to the public system, whether in
fact we'd have the public system we need. But of
course then people would be complaining that they're contributing a
lot more than others to pay for everyone else's health.
Speaker 4 (32:25):
But I mean, that's the idea of something.
Speaker 2 (32:27):
Oh sorry, Tom, I think they do something like that
in the Netherlands. I think that everybody who can has
a premium for health insurance, and then all the health
is provided privately and they compete against each other and
drive costs down and so on.
Speaker 3 (32:46):
Imagine if you took the health component out of our
taxes and had it separate. But that's something I'd have
to get on the hustings for, Wouldn't it funny enough?
You google my cousin, Lord William Beverage and you'll find
out the history he's gotten the beverages have got with
health systems. Will be quite surprised there. But anyway, there's
(33:07):
just a teaser for you. I've told my audience about
that before, but okay, I'll save you the time. He
wrote the document called the Beverage Reportress the Foundation of
the social Welfare system in Britain.
Speaker 2 (33:16):
Of course, yeah, yes, he was sure.
Speaker 4 (33:19):
My grandfather's cousin, right.
Speaker 5 (33:22):
Yeah.
Speaker 3 (33:22):
Our main interest was whether the lord thing was hereditary.
Apparently it was just a life peeroge. How so you
just call me Tim.
Speaker 2 (33:31):
At the moment, like we digressed found out.
Speaker 3 (33:35):
Hey, look, we'll be back with Don with another call
in just a moment. It's eleven minutes two six.
Speaker 4 (33:41):
S News talks.
Speaker 3 (33:42):
He being with Martin, who has been talking insurance actually,
and it's been an interesting conversation because it's difficult to
dish up particular answers. But the questions that you ask
yourself about the what earth and you know, helps you
decide whether this insurance is something you must have or
it's so nice to have. So I hope it's been
useful for you if you've been listening. Don, Hello, Martin.
Speaker 5 (34:02):
Look, I've got a national mutual policy here in front
of me that my father took out in May nineteen
fifty three. I was eighteen months old. He was paying
four pounds fourteen shillings a year for a life cover
of two hundred and fifty five pound. I've kept paying
the premium every year, nine dollars something, and currently it
(34:23):
has a life cover of four thousand, four hundred and
a estimated cash value of less than four thousand. So
I've kept paying this for seventy odd years just to
prove my children at life insurance policies or waste of time.
Speaker 2 (34:40):
Well that I mean, I had one almost identical blong
and I keeped mine up as an eighteen year old,
well not late later in life, but I.
Speaker 5 (34:51):
Kept it going because I could ford nine dollars a year.
Speaker 2 (34:54):
Yeah, it doesn't have bonuses on It does.
Speaker 5 (34:59):
Have bonuses, but you know, estimated bonuses in five years
four thousand, nine hundred. You know, but your life cover?
Speaker 3 (35:06):
Can you cash it up? Is there something in there
you can grab or is it all gone?
Speaker 6 (35:10):
Well?
Speaker 5 (35:10):
You know what's full grand You know, it's still a
fun thing I bring out of me now.
Speaker 3 (35:14):
Slap up Benjamin Missus Megan's Past.
Speaker 5 (35:16):
Shop Martin Martin Good to hear on the and congratulations
on your latest book, mate.
Speaker 2 (35:22):
Okay, I think you can't. I'm good stuff. I'm quite
surprised at that because I know some of those weren't
too bad. But I thought similarly that the one that
my father bought. My dad wasn't all that good with money,
but that he had bought wasn't any good. So maybe
(35:46):
there was a bat chop them about nineteen fifty three
or fifty four. They were all they were bad.
Speaker 4 (35:52):
Actually, you know, there was something you said earlier on
We could all mastal to do a whole hour on it,
but it was that, you know how.
Speaker 3 (35:58):
I think you mentioned where Warren Buffett came up, and
I think you mentioned that whether he doesn't ensure his
house another billionaires don't.
Speaker 4 (36:04):
But it's just an interesting.
Speaker 3 (36:05):
Comment you made about he would look at every transaction
on whether he's winning or not. That's an interesting philosophy
to take into life that if you were, I mean,
it's led him to be. He's quite a frugal guy.
By the three dollars fifteen McDonald's cheap Breakfast, which he
probably to be honest, he probably likes it. But it's
an interesting thing if you ask yourself a bit more regularly.
(36:29):
Am I winning with this decision I'm making? And I
wonder how much better we'd be off if we had
a little bit of that buffet stinginess in us?
Speaker 4 (36:36):
Yes?
Speaker 2 (36:37):
Or would it be bad the economy? I don't know
whether the buffet does ask himself. I mean we just
created that. I don't know where you know, Yeah, I
know I said that he usually does win, but he
may ask that question. And it's not a bad question
because a lot of this stuff is actually binary. That is,
(36:57):
you know, there is a winner and there is a loser.
On which side of the steel are you going to
be on? Yeah? You know, Trump apparently thinks like that.
Now you've got to remember that Trump as next he
made all that much money get through that.
Speaker 3 (37:14):
But I think he's doing all right now through this
and that I was happy to get through the through
the show without mentioning his name, Martin, So thanks for
dropping the board at the last minute. Hey, but look,
if people want to get hold of your book, it's
a good booksellers, I guess yep. Retirement Ready by Martin Hawes,
book number what nineteen twenty four?
Speaker 4 (37:33):
Oh, how insufferable?
Speaker 3 (37:36):
Hey, Martin? Great to talk to you as ever. Well,
look forward to next time.
Speaker 2 (37:40):
Okay, thanks very much, Tom, cheers, bye bye.
Speaker 4 (37:43):
Thank you for listening as well.
Speaker 3 (37:44):
If you've missed any of the hours, you can go
and check him out on the podcast and I'll catch
you next weekend. Meanwhile, Sunday at six is next. Enjoy
the rest of you evening, catch your scene.
Speaker 1 (38:14):
For more from the Weekend Collective, listen live to News
Talk ZEDB weekends from three pm, or follow the podcast
on iHeartRadio.
You're listening to the Weekend Collective podcast from News talks'd
be well, would they?
Speaker 2 (00:11):
You know they if they if they're five million dollar
house burned down, then check for five five million. I have
no problem. Why would they pay for insurance. That's a
risk they can afford to take. But for the vast
majority ninety nine point nine percent of us, we need
to ensure the house. We need to ensure the contents
(00:33):
as well, because there's several hundred thousand dollars usually tied up.
And then one of the interesting ones is life insurance,
which is a real misnomer of course, because you're not
really ensuring a life. You don't get your life back
if you die and you've got insurance unfortunately. But I
think the two circumstances where I think young people or
(00:57):
younger people really need life insurance is when they have mortgages,
bankle and systems anyway, but we well they may insist
and children because really one of a coupled eyes, let's
keep it simple, one of a coupled eyes. Let's say
(01:18):
he dies, she's left with the house, with a mortgage,
a couple of children maybe to look after, and therefore
it's hard for her to earn a living to pay
for that mortgage, and her life's turned completely upside down.
So I usually say to people with a house with
a mortgage that you should ensure, but either the amount
(01:41):
of the mortgage so you're no longer pay you'd get
paid out on the moor equivalent to the mortgage, or
enough to keep you going for at least a couple
of years. Ideally I would like box. So if you
had a five hundred thousand dollars mortgage and it was
going to cost you fifty thousand dollars a year, you
(02:01):
ensure the five hundred thousand dollars mortgage plus one hundred
thousand two years of fifty thousand, So that'll be six
hundred thousand dollars of life insurance that I've been looking.
Speaker 3 (02:11):
At, say five hundred thousand to cover the mortgage, and
what's the other lot for just a bit of.
Speaker 2 (02:15):
Spiking, just to get you through, I mean, get you
through those side. Maybe suddenly, and she's absolutely even if
it's not sudden, she'll be absolutely shocked. She'll be in grief. Yeah,
she won't want to go work, She want to stay
close to home, she wants to stay close to the children,
and the children will have their own issues. They have
(02:37):
a couple of years where you can just say I
don't have to work. I think it is absolutely critical.
I've seen that all like that.
Speaker 3 (02:45):
Actually, regardless of the status of our spouses, it's like
a couple of years not to work.
Speaker 2 (02:50):
Yeah, somebody who was older, who was living off their
savings getting into Trooper. A couple like that, No, they
probably don't need it because they can the survivor can
carry on living on the savings and carries on getting
into Trooper, albeit at a lower rate.
Speaker 4 (03:07):
Of course.
Speaker 3 (03:07):
See, I've probably been a bit of responsible. I don't
think we've got life insurance. May are insurance. Our mortgage
is getting down where it's not going to frighten the horses,
you know, to have.
Speaker 4 (03:15):
To cover it.
Speaker 3 (03:16):
But I actually I don't want to credit one of
my parents on this. But I think somewhere along the line, someone,
and maybe it was TV, that every dodgy character in
TV sort of murder mystery was life insurance salesman, and
I had a I probably developed a prejudice. I thought
life insurance is the equivalent of would you like fries
with that mortgage?
Speaker 2 (03:37):
Yes, yeah, there was I need.
Speaker 3 (03:40):
To adjust my attitude Martin, because I probably still have it.
I sort of think, oh, I don't know. I sort
of think if I died in a nasty accident, okay,
acc had covered something.
Speaker 2 (03:53):
M hm yes, So I asked the question, what I've Yeah,
and let's say it wasn't a nasty accident, so acc
went there. It was a sudden and completely unexpected heart attack,
unlikely but as possible. Then what you know, what if
that happened? What happens almost we can't say what happens
(04:13):
to you?
Speaker 3 (04:14):
Yeah, I'll start to get a little bit tense. Yeah, yeah,
m hmm.
Speaker 5 (04:22):
It is.
Speaker 3 (04:23):
It is a difficult one, isn't it, Because you know,
there's there's there's be a point I guess in your mortgage.
So if you've got a half a million dollar mortgage,
you'd be we probably should have had life insurance. Yes,
but if you're doubt, if you're down to you know,
if you've paid most of it off, then there's a
point would you have to I mean, if you've got
a bit to go, it's to be honest, there's a
(04:45):
nice to I think we're in the situation. Would be
a nice to have, Like if if my wife passed
away or I passed away, there'd be the shock, and
but we'd cope. As opposed to it's eight nine years ago,
it would have been an absolute disaster. I mean, putting
aside obviously grief, we're not trivializing that side of things.
Speaker 2 (05:05):
And tim, you wouldn't want to come into work the
following Sunday or any any of the day probably, And
I'm not sure what your wife does, teacher, she she
probably wouldn't want to, you know, pack a lunch and
go off to work the next day either, So she's
going to You're both going to have a fair bit
of time off work, and especially if the children are
(05:25):
younger and or even teenagers actually, because they often express
their grief in a pretty difficult sort of way, because there.
Speaker 4 (05:33):
Being some people who might be listening.
Speaker 3 (05:34):
Young couples will be like, look, we bent over backwards
to buy our first house, were mortgaged up the ying yang.
There's just no blooming way we can afford it. It
is a really difficult equation, isn't it. Because you're saying
what if and they say, I don't know what. The
response is, well, it costs money.
Speaker 2 (05:53):
Yeah, and it really does. Cost money. I guess the
likelihood is is low, but the impact is high.
Speaker 4 (06:04):
Any One isn't it try that it's.
Speaker 2 (06:06):
Not probably not going to happen, but if it does,
it's it's pretty severe.
Speaker 3 (06:10):
Did you what was your approach to life insurances throughout?
I mean, you're still cranking on strong climbing mountains. Gosh,
by the way, sorry, I meant to mention at the start.
I don't want to divert it, but we did mention
how Alex Honold, the climber has just succeeded about an
hour or two ago and climbing the five hundred meter
building and it's insane stuff for the skyscraper. But anyway,
(06:33):
I imagine he I don't know if he could take
out life insurance.
Speaker 2 (06:35):
Good he I don't not for doing that anyway, get
life insurance for a heart attack. But most insurers blank
out the hazardous pursuits stuff, so you couldn't.
Speaker 4 (06:48):
So you are okay.
Speaker 3 (06:50):
So I mean, because that's one of the things in
life is that we like to undertake risk as young people.
So they might say, okay, well, if you go skiing,
climbing or aggressive mountain biking or bets are.
Speaker 2 (07:00):
Off, maybe skiing would be okay. Maybe aggressive mountain bike
would be okay. That'd be now there'd be more about
injuries rather than death. Climbing the certainly dema hazardous pursuit. Diving,
I think, is the other one. Hemingway would have said
that bullfighting, mountaineering, and there was a third one that
(07:24):
he said were the only true sports. Motor racing was
the other one.
Speaker 3 (07:29):
Funny, it's weird that you mentioned bull fighting because some
reason my social.
Speaker 4 (07:33):
Media fees feed is clogged.
Speaker 3 (07:35):
Up with idiots running away from bills and getting skewered
because I watched one. So what was your approach to
have you always had that? I mean, it's one thing
to talk about it, but what was? And you can
share as much or as little as you like about
your own personal circumstances, but what was your approach as
a young man through your life to life insurance?
Speaker 2 (07:55):
We certainly had it early on with the children, and
I don't know now. I suppose we don't have landlines.
But in those days, life insurance agents would get the
telephone book out of an evening, start with the a's
and just make cold calls so somebody would ring, and
life life insurance especially is usually sold to people. Ah,
(08:19):
life insurance agents are actually extremely good. They're very clever,
they're very well informed, they're very good at what they do.
But a lot of them are there just for the commissions,
and the commissions are high, and so they are out
there selling.
Speaker 3 (08:37):
Well, that's the thing. So you just you've just answered
my question. I remember why I formed the prejudice against it,
because my childhood was full of my mum answering the phone,
going no, thank you, not today, and then telling me
what it was. And I just formed this prejudice that
none of what was to be trusted. And you're saying
many people should have it.
Speaker 2 (08:57):
Yeah, yeah, some of them should be trusted. Life insurance
are different. It's a different beast now because you when
you take out life insurance, it's like car insurance. You
are ensured while you pay the premiums. As as soon
as you stop paying paying for it, the cover stops.
Whereas in the old days you can last. Yes, you'd
(09:20):
build up a lump sum because they had a bit
of investment attached to them, and this was largely for
tax purposes. You could claim I think was fourteen hundred
dollars on a life insurance premium, and a fair chunk
of that fourteen hundred dollars was actually going into a
savings account. But that doesn't happen anymore, and they're not
nothing like as complex as they used to be. People's
(09:43):
circumstances can be quite complex as to whether or not
youly life insurance or income protection and so forth. Some
people need the whole suite of these things, and boy
that can add up. But then again, I've seen people
like you know, doctors, have severe injuries, they can't ever
work again, and they claim for the rest of their lives.
Speaker 3 (10:06):
Which brings in the what if, I guess, because if
you are a high income earning individual and you you
have a life that is supported by that high income,
then the what if is, well, probably, if you're a
high incoming you should probably set aside some of that
high income for for life insurance and income protection insurance.
Speaker 4 (10:23):
Or something yep.
Speaker 3 (10:25):
Whereas if you're on the bones of your butt, it's
a bit more of a challenging proposition, isn't it.
Speaker 2 (10:30):
Yes, yes, it is. I think I just keep coming
back to that what if you see you never well,
the population as a whole doesn't win on insurance insurance
is not about winning because you don't really want to die,
so you can say.
Speaker 3 (10:45):
Well, aha, my insurance is worth it.
Speaker 2 (10:48):
You know, that's what That's why I only paid five
hundred dollars of premiums and now I did, and you
know we got half a million dollars for so that
would that would kind of be a win. But it's
not much of a not much for a win. So
the insurance companies they've got the Yet you see that
people who work these work the numbers out. They've got
(11:09):
the numbers on their side. You know, they set the
premiums across a population. They're going to make money out
of it, so you're helping them make money. So you know,
I wouldn't over ensure, but I would be ensure to
the level of comfort when you've asked what.
Speaker 3 (11:29):
Yeah, because the mortgage one is I mean some banks
offer it too, don't they. I think as part of
it they say, look, we have a life a mortgage insurance,
protection insurance. In fact, you can probably do it all
through your bank, just about could you know?
Speaker 2 (11:41):
I'm not sure, yes, I think you probably could now
because I don't have a mortgage and I haven't had
one for twenty or thirty years. I'm not sure about that.
I'm not feeling and you're not begin all that much.
You're not playing the Warren Buffett card and saying it's
(12:01):
funny because I was the latest book that we've talked
about it before. What I'm ready that one. I was
actually writing that and sort of posing the question, would
are extremely wealthy billionaires and so forth ensure their houses?
And plural is important there. And shortly after I wrote that,
(12:25):
I read an article by Charlie Munger, who is Warren
Buffett's business partner, saying that he and Warren don't ensure
their houses.
Speaker 3 (12:35):
Actually, I don't know why you wouldn't insure it, because
it just be a convenience, wouldn't it. I mean, I mean,
let's face it, Warren Buffet's house five million would be cheap.
I imagine he's got a fairly flash house. But why
wouldn't you insure it you can afford to?
Speaker 2 (12:48):
Well, I don't think. I don't think Warren Buffett's house
is all that flash, or at least one of them.
He may have marble ones. The reason he wouldn't ensure
it is because he's likely more likely than not to
lose on the deal. Warren Buffett doesn't like losing on deal.
So the whole career he's been a winner. Yes, yes,
(13:11):
threemiums are unlikely to be less than Yeah, then any payout.
Speaker 3 (13:20):
Okay, Look, we love your cause on this. On insurance,
the choices you've made, what are the how have you
balanced the As Martin Haws has mentioned, you know the
what if scenario? What if something happens, what happens with
your family and your loved ones?
Speaker 4 (13:35):
Do you is that something?
Speaker 3 (13:37):
Is it something you have to afford the what if?
Or do you just go whatever it costs, I'll do it,
and I guess Look, here's me being a hypocrite. Hypocrite, No,
I have health insurance, and health insurance for a family.
When you get over the age of fifty starts getting
pretty expensive. But I think, what if and as you
(13:58):
get older, what if you need a new hip? What
if you need a new this? And so that's the
choice I've made. But as for life insurance, what's that?
Speaker 4 (14:06):
What are the choices you have made? And how do
you balance it out?
Speaker 6 (14:08):
Oh?
Speaker 3 (14:08):
Eight hundred eighty ten eighty text nine two nine two
will be back with some calls and your texts in
just a moment with Martin Hawes. By the way, I
should say, author of Retirement Ready. And before we go
to the break, you just launched it before Christmas, in
you Martin.
Speaker 2 (14:24):
It it was about October. I think in October, how's
it going? It's sold extremely well. And I was in
a couple of bookshops part of Christmas and it was
obviously selling pretty well in the book shops even for Christmas.
Number our people who give their partners and children and
(14:44):
people like that books on finance.
Speaker 3 (14:47):
Actually, one does wonder if for sixty fifth birthdays people
get Retirement Ready and they go, I should have had
this fifteen years ago. Okay, we'll be back in just
a minute. It's twenty five past five News Talk SB. Yes,
welcome back. This is smart money. We're talking about the
(15:09):
choices you make on insurance. How do you balance that
must have you know what if versus you know what?
Can we afford?
Speaker 5 (15:15):
Oh?
Speaker 3 (15:15):
Eight hundred and eighty ten eighty. My guest is Martin Hawes,
author of well lots of books. The most recent one
is called Retirement Ready. Right, let's get it.
Speaker 4 (15:25):
By the way, Warren Buffett.
Speaker 3 (15:26):
Is living in the same house that he bought for
thirty one thousand dollars years and years ago, and I
googled it's a lovely looking house. But and he does
he eats the three dollars fifteen bargain breakfast breakfast at McDonald's.
There's something I want to dig into, something you said
about him and the fact that he does go for
the bargain all the time, which you wonder how much
(15:46):
further we'd all be ahead in our lives if we thought,
are we winning in this transaction or losing? Interesting thought,
isn't it, Peter?
Speaker 7 (15:53):
Hello, God, I have to know.
Speaker 8 (15:55):
And I've heard lots of stories people canceling their insurance
and a week later they're either dead or need a
medical claim or whatever too late. And the other thing is,
I've heard people have insurance, but sometimes they lacked the
due diligence, like leaving car keys out, or the worst
one I heard is a house burnt down and this
(16:17):
extramarital affair was taking place. The pillow was put on
the lamp at court fire. They put the pillow in
the bathroom, went back into the bedroom in their bathroom
court fire, the house burnt down. The insurance said, well,
you didn't take due care to make sure the fire
was out, So we're not paint.
Speaker 3 (16:35):
Well, indeed, what insurances have have you chosen for and against?
Speaker 4 (16:40):
Peter?
Speaker 8 (16:41):
Well, I have health insurance, which I wonder about because
the price keeps going up. And then friend was thinking
of canceling as and then it was one hundred and
twenty or two hundred thousand for his prostate cancer or something,
and they decided not to canceland. Then the thing that
I worry about, not for me, other people is when
(17:02):
what's the crossover you can have life insurance or one
thing or critical care or loss of income or what's
the other one? When you have a health issue like
diagnosed with cancer but you're still going to live that
sort of cut off? You know, when would life insurance?
When would if you only could afford one and you
have the choice of those two, how would you make
(17:25):
that choice?
Speaker 4 (17:26):
Well? Have you made any choices in that regard?
Speaker 7 (17:28):
People?
Speaker 5 (17:29):
No?
Speaker 8 (17:29):
No, no, no, I'm just asking what what what what
would be the would there be an age, would it
be an income? What what would be the termination or
family history or what would be the termination of you know,
of what people would need in that regard because if
they're working, for example, they might qualify for acc if
(17:49):
they have an accident, But if they don't have accidents,
well that's you know, there's no no things there.
Speaker 3 (17:55):
So yes, because actually, to be honest, whether you get
hit by a car or a virus, it's still an
accident from your own point of view, but one is
not deemed to be an excellent one is Yeah, what
are you any comment?
Speaker 2 (18:06):
I think, first of all, when you come to those
people who cancel their health insurance and then a week
later find that they need some treatment, I'm in that basket.
A couple of years ago I canceled my health insurance
and it wasn't a week. It was about a month
or two months or something. I was in getting some
(18:30):
some surgery done and they found postate cancer and they
had to do another operation and so forth, and then
I had radiation and so forth. Was that the radiation
and the public system. So some of my treatment was public,
and you know, some of it I just paid for myself.
Speaker 3 (18:49):
Was that to expedite was that to expedite treatment. So
it's like missing around here, let's get into it.
Speaker 4 (18:54):
I'll pay it.
Speaker 2 (18:56):
No, No, I paid for it because yes, well I
just the first one was just I don't think would
have been done. And then once the first one is done,
they need to come back and do a second one,
so that needed to be the same surgeon and so forth.
So that was okay. When it comes to income protection
(19:16):
versus life insurance, income protection is often very expensive because
if you look at it from the insurance point of view,
it's it's a big liability. So they are promising to
pay the salary for maybe forty years or something, usually
through throughout age sixty five, and I think you're often
better with just a lump sum, and it's kind of straightforward.
(19:41):
What that doesn't cover you with. Of course, that's completely different. Covers.
One covers you for deaf but not injury, whereas the
other covers you or your own goodness, whereas the other
covers you for illness but not not death. But life
insurance is the big one. I think that's that both
(20:03):
can hugely dislocate life lives, changed lives enormously. But I
think death is the really big one because I've seen
that so much more often than I've seen debilitating injury illnesses. Sorry,
not insurance.
Speaker 3 (20:18):
Interesting, it's called life insurance and not death insurance, isn't it?
Because really it's death insurance. But that's not so sellable
the language of marketing.
Speaker 4 (20:29):
I love it.
Speaker 2 (20:30):
I would leave you to go.
Speaker 3 (20:34):
I mean, isn't it it is? It's just it's just
the way it is, isn't it because you're actually selling
death insurance. But you imagine the meeting where they first
proposed us. It's like, I've got this great idea of
death insurance, and then someone went, hey, what if we
call it life insurance?
Speaker 4 (20:50):
And they like it?
Speaker 2 (20:51):
Get away with that.
Speaker 4 (20:54):
Take your by the way.
Speaker 3 (20:56):
I mean, I don't want to to get onto serious issues.
But did you have a moment of sort of black
humor when you when you got your diagnosis, thinking it's
to and just counter my health?
Speaker 2 (21:07):
Yes?
Speaker 8 (21:07):
I did.
Speaker 2 (21:08):
Actually, well you know it's a stroke of your shoulders.
Really them the breaks. And I funded my own health insurance.
I put a fairly large amount of money away and aside,
and that's my health bucket. And I just stipped into that.
Speaker 3 (21:27):
Do you keep an eye actually since you do that,
because some people say, look, if you if you've got
the patience and you trust that you're not going to
get anything stick the health insurance money into a you know,
into a compounding sort of investment, and then eventually it'll
start to be something you can rely on. And yet
it's still there. If that'd be very rare, wouldn't it.
Speaker 2 (21:46):
Yeah, see that should work.
Speaker 4 (21:50):
You've got a way ten or fifteen years.
Speaker 2 (21:52):
For the insurance and so forth, so you know, the
premiums are likely to be greater than the actual claim.
The problem is that eventually may come sooner, and my
eventually came. So, I mean, I was just going to
start putting the premiums into a bank account, and then
I thought what happens if immediately I need surgery or something,
(22:14):
And so I properly funded. I put a lump sum
into a bank account. And in the book I actually
detailed this because I thought it's a reasonable thing for
those who are well off, because I get more emails
about health insurance than just about anything else. Now, these
are people of my age, the people in their sixties,
(22:36):
seventies and eighties, and the premiums start go sky high.
I know, it's a good reason.
Speaker 3 (22:43):
You like to think there's a bit of a balance
there that you're not trying to you know, you're literally
not putting a deposit in the next couple of years
on the inevitable hip operation.
Speaker 4 (22:51):
But it's or or not. It's an interesting one.
Speaker 3 (22:55):
I think my insurance health insurance has actually paid for
itself with a couple of things. But I sort of
feel I'm winning. Warren Buffet would be pleased with me.
It's in your winning currently famous last words, John, Hello, Yeah.
Speaker 6 (23:10):
By Tim? How are you good?
Speaker 4 (23:11):
Thanks?
Speaker 5 (23:12):
Oh? Good?
Speaker 6 (23:13):
I've I had a whole of I've got a whole
of life insurance policy. I started when I was eighteen.
I'm now approaching sixty five. The mortgages paid the money
in the bank. I'm thinking, do I need to continue
with the whole of life policy? What's the advantage to
keeping it up? What's the advantage to canceling it? I mean,
(23:36):
it's a minimum amount about one hundred and forty dollars
and then one hundred and fifty dollars per inum so parana.
Speaker 4 (23:43):
Yeah, oh that's not much of that.
Speaker 6 (23:47):
No, not not to be out laying.
Speaker 3 (23:48):
No, But can I just ask is that be one
hundred and forty dollars forever? Or is it changed over time?
Speaker 6 (23:54):
Oh, it's changed over time. It was seventeen a month anesday.
I listen that.
Speaker 3 (24:00):
So what happens if you if the policy gets activated?
Speaker 4 (24:02):
What are you? What are you or your family looking at?
Speaker 6 (24:06):
You get some insured plus in your bonuses, okay, what
they call a terminal bonus. But I'm just wondering whether
necessary to keep going. And it's not going to save
a lot of money, but something else.
Speaker 4 (24:25):
You want to know what Martin reckons?
Speaker 2 (24:26):
So do I Martin, Well, John, I'd take that to
a disinterested and unbiased broker and get an opinion. My understanding,
I haven't heard anybody use the term whole of life
insurance for a long time. He's a very old and yes,
(24:53):
so I'm I'm not completely up to date on them.
But the old thing was that they weren't bad policies
as long as you kept them going. They worked out
pretty well because they're quite good bonuses with them and
so on. So I think that would be well worth
taking it to somebody. Now, it may be relatively I
remember my dad buying one for me when I was
(25:16):
four or something, and me putting a week cross on
there to sign the documents and so forth, and then
cashing the thing in when I was about fourteen or eighteen,
or something, but who knows what's there. It would be
well worth getting somebody who's expert on this stuff to
(25:37):
give you an opinion.
Speaker 3 (25:39):
You need to know how much money is at stake
and what's because one hundred and forty bucks a year
is not much, you know, Well, the.
Speaker 6 (25:45):
Total benefits now are about fifty thousand. Yeah, about to die,
So there's over twenty thousand dollars and bonuses.
Speaker 4 (25:55):
And can you get those?
Speaker 6 (25:58):
That's what I don't know. I'm not sure about something broke.
Speaker 3 (26:01):
I guess you could even just ask to ensure what
happens if I cancel this? They would have to tell you,
I mean they can't fit. Yeah, true, Yeah, it's worth
thinking about it though. At least we've had the conversation,
you know.
Speaker 2 (26:16):
And you know John that if you're in a ruler
through that I'm not sure how many decades you've actually
had this thing for, but if you're in a ruler
thrower to get fifty thousand dollars from putting one hundred
and forty dollars a year, that may may be actually
have been a really good deal to take out, and
(26:38):
it may be a good thing just to keep it going,
and it just then when you do die, it goes
into your estate and your children or grandchildren or whoever.
Speaker 6 (26:48):
The intention that that money would cover a funeral and
whatever it was left of. How the mortgage is gone
and there's money in the bank to cover a funeral.
Speaker 3 (26:58):
So yeah, well it sounds like you're talking yourself towards
one direction. You just need to find what if there's
anything you can get out of it if you cancel it. Yeah,
if it's twenty grand to be had, I'd think I
know what I'd be doing.
Speaker 4 (27:10):
Seen it?
Speaker 3 (27:11):
What's that line from Blank Black at I seen it?
Pinched it, spent it? Anyway, I don't know why I
quoted that, but it's a bit of a random thing.
Speaker 4 (27:20):
Anyway.
Speaker 3 (27:21):
We take some more calls in the moment, and we've
got lots of texts on this, on the insurance choices
that you have or haven't made, versus you know, the
nice to have versus the must have, or the what
if could what? You know, how would life be if
something happened to you? Would your family be in a
situation where they could cope? It's twenty to six News
(27:41):
TALKSIDB Yes, gosh, time's flying by talking with Martin hare
was about life insurance, amongst other things, and the choices
we make. I eighte hundred and eighty ten eighty David.
Speaker 7 (27:52):
Hello, if this is the David, did you wanted to
speak to a year? I'm not saying hello too.
Speaker 4 (27:58):
It's you.
Speaker 7 (27:59):
It's good, Yeah, it must be. I'm privileged actually because
it's a good subject. And I'll give you my example.
And I'm seventy almost seventy four, and my insurance gets
regularly updated and my wife pays for it, and we
(28:20):
come up with the last one and I thought, my
life is not worth sixty thousand and so, and I
worked it out and it pays my rates. If I didn't,
we didn't pay that dumb amount to you know, it
wouldn't matter. I mean, we'll just be paying our rates.
(28:41):
And that's what I said to you.
Speaker 4 (28:42):
So you worked out it wasn't I must have?
Speaker 5 (28:44):
Then?
Speaker 7 (28:46):
No, absolutely not. I mean because I've got cash in
the bank anyway if necessary, you know. And I told
you you've got a car and put some pieces and
you know, so.
Speaker 3 (28:54):
What are the insurances that matter to you?
Speaker 5 (28:57):
Well?
Speaker 4 (28:57):
Nothing, in my view, car, health, house.
Speaker 7 (29:02):
Well the car is probably the most important house. Yeah,
but definitely but the sections always you know, you've gave
an example before. So Martin, did I think about a
house that with half a million and gets destroyed? Well,
there's always, there's always the land, and the land's often
(29:22):
worth a lot more than the house anyway.
Speaker 2 (29:24):
So Martin, you anything you'd like to add, you're certainly
right there. But I mean, you know, the land does
usually left there, and it is only the house that's
ensure that. You're only ensuring the house. You're not ensuring
the land e QC I think, or whatever it's called now,
(29:44):
they ensure, They ensure the land to some extent for you,
for you, So you're only paying a premium for your
house insurance for the actual bricks and water.
Speaker 7 (29:58):
Yeah, well we're on the same page, I think, Martin,
because you know, it's basically it looks like to rip
off from where I'm sitting because instead of paying the
premium for my life, and I've got enough cash to
cover it anyway, so so you know, why why not
just use it to pay the rates?
Speaker 4 (30:18):
Okay?
Speaker 2 (30:19):
See, I think I'm not not a historian, but I
think this is why many of these insurance insurers, and
I'm thinking particularly of a MP and also National Mutual,
it's the name from way back. They started life as mutuals.
They were cooperatives basically. Now they morphed, well a MP
(30:42):
bought EXA or National National Mutual eventually.
Speaker 6 (30:46):
But.
Speaker 2 (30:48):
They morphed into four profit businesses. But they started as mutuals.
Speaker 4 (30:55):
What's a mutual actually mean as well?
Speaker 2 (30:58):
Just as like a co op. So it's just a
bunch of us getting together and saying, well, let's let's
because insurance works by people calling collectivism. Yeah, yeah, collectivism,
that's right, so that you know, we all pay premiums.
Speaker 4 (31:11):
But it's pay for our health system.
Speaker 2 (31:14):
But no, only you know, if we if we all
get together and pay premiums, only one of us sties
this year, and then somebody else dies next year and
so forth. So then the payments and unless there's something
really bad happens in the country, all the payments are
unlikely to come together. And that's the problem with my
(31:35):
health insurance, looking after my health insurance myself. Unless I
fully funded it, I don't know when it's going going
to occur. And it's collectivism, it's it's a whole bunch
of people insurance. When when these things turn into four
profits you're paying not only for the payouts for their
for their claims, but you're all paying for all their costs,
(31:59):
and you're also paying for their profit. So and the
only place that those money can come from, those costs
can come from it is your premiums.
Speaker 3 (32:08):
It's been interesting to know if you put all the
money that's spent on private health insurance into the if
that money was available to the public system, whether in
fact we'd have the public system we need. But of
course then people would be complaining that they're contributing a
lot more than others to pay for everyone else's health.
Speaker 4 (32:25):
But I mean, that's the idea of something.
Speaker 2 (32:27):
Oh sorry, Tom, I think they do something like that
in the Netherlands. I think that everybody who can has
a premium for health insurance, and then all the health
is provided privately and they compete against each other and
drive costs down and so on.
Speaker 3 (32:46):
Imagine if you took the health component out of our
taxes and had it separate. But that's something I'd have
to get on the hustings for, Wouldn't it funny enough?
You google my cousin, Lord William Beverage and you'll find
out the history he's gotten the beverages have got with
health systems. Will be quite surprised there. But anyway, there's
(33:07):
just a teaser for you. I've told my audience about
that before, but okay, I'll save you the time. He
wrote the document called the Beverage Reportress the Foundation of
the social Welfare system in Britain.
Speaker 2 (33:16):
Of course, yeah, yes, he was sure.
Speaker 4 (33:19):
My grandfather's cousin, right.
Speaker 5 (33:22):
Yeah.
Speaker 3 (33:22):
Our main interest was whether the lord thing was hereditary.
Apparently it was just a life peeroge. How so you
just call me Tim.
Speaker 2 (33:31):
At the moment, like we digressed found out.
Speaker 3 (33:35):
Hey, look, we'll be back with Don with another call
in just a moment. It's eleven minutes two six.
Speaker 4 (33:41):
S News talks.
Speaker 3 (33:42):
He being with Martin, who has been talking insurance actually,
and it's been an interesting conversation because it's difficult to
dish up particular answers. But the questions that you ask
yourself about the what earth and you know, helps you
decide whether this insurance is something you must have or
it's so nice to have. So I hope it's been
useful for you if you've been listening. Don, Hello, Martin.
Speaker 5 (34:02):
Look, I've got a national mutual policy here in front
of me that my father took out in May nineteen
fifty three. I was eighteen months old. He was paying
four pounds fourteen shillings a year for a life cover
of two hundred and fifty five pound. I've kept paying
the premium every year, nine dollars something, and currently it
(34:23):
has a life cover of four thousand, four hundred and
a estimated cash value of less than four thousand. So
I've kept paying this for seventy odd years just to
prove my children at life insurance policies or waste of time.
Speaker 2 (34:40):
Well that I mean, I had one almost identical blong
and I keeped mine up as an eighteen year old,
well not late later in life, but I.
Speaker 5 (34:51):
Kept it going because I could ford nine dollars a year.
Speaker 2 (34:54):
Yeah, it doesn't have bonuses on It does.
Speaker 5 (34:59):
Have bonuses, but you know, estimated bonuses in five years
four thousand, nine hundred. You know, but your life cover?
Speaker 3 (35:06):
Can you cash it up? Is there something in there
you can grab or is it all gone?
Speaker 6 (35:10):
Well?
Speaker 5 (35:10):
You know what's full grand You know, it's still a
fun thing I bring out of me now.
Speaker 3 (35:14):
Slap up Benjamin Missus Megan's Past.
Speaker 5 (35:16):
Shop Martin Martin Good to hear on the and congratulations
on your latest book, mate.
Speaker 2 (35:22):
Okay, I think you can't. I'm good stuff. I'm quite
surprised at that because I know some of those weren't
too bad. But I thought similarly that the one that
my father bought. My dad wasn't all that good with money,
but that he had bought wasn't any good. So maybe
(35:46):
there was a bat chop them about nineteen fifty three
or fifty four. They were all they were bad.
Speaker 4 (35:52):
Actually, you know, there was something you said earlier on
We could all mastal to do a whole hour on it,
but it was that, you know how.
Speaker 3 (35:58):
I think you mentioned where Warren Buffett came up, and
I think you mentioned that whether he doesn't ensure his
house another billionaires don't.
Speaker 4 (36:04):
But it's just an interesting.
Speaker 3 (36:05):
Comment you made about he would look at every transaction
on whether he's winning or not. That's an interesting philosophy
to take into life that if you were, I mean,
it's led him to be. He's quite a frugal guy.
By the three dollars fifteen McDonald's cheap Breakfast, which he
probably to be honest, he probably likes it. But it's
an interesting thing if you ask yourself a bit more regularly.
(36:29):
Am I winning with this decision I'm making? And I
wonder how much better we'd be off if we had
a little bit of that buffet stinginess in us?
Speaker 4 (36:36):
Yes?
Speaker 2 (36:37):
Or would it be bad the economy? I don't know
whether the buffet does ask himself. I mean we just
created that. I don't know where you know, Yeah, I
know I said that he usually does win, but he
may ask that question. And it's not a bad question
because a lot of this stuff is actually binary. That is,
(36:57):
you know, there is a winner and there is a loser.
On which side of the steel are you going to
be on? Yeah? You know, Trump apparently thinks like that.
Now you've got to remember that Trump as next he
made all that much money get through that.
Speaker 3 (37:14):
But I think he's doing all right now through this
and that I was happy to get through the through
the show without mentioning his name, Martin, So thanks for
dropping the board at the last minute. Hey, but look,
if people want to get hold of your book, it's
a good booksellers, I guess yep. Retirement Ready by Martin Hawes,
book number what nineteen twenty four?
Speaker 4 (37:33):
Oh, how insufferable?
Speaker 3 (37:36):
Hey, Martin? Great to talk to you as ever. Well,
look forward to next time.
Speaker 2 (37:40):
Okay, thanks very much, Tom, cheers, bye bye.
Speaker 4 (37:43):
Thank you for listening as well.
Speaker 3 (37:44):
If you've missed any of the hours, you can go
and check him out on the podcast and I'll catch
you next weekend. Meanwhile, Sunday at six is next. Enjoy
the rest of you evening, catch your scene.
Speaker 1 (38:14):
For more from the Weekend Collective, listen live to News
Talk ZEDB weekends from three pm, or follow the podcast
on iHeartRadio.
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