An insurance mistake can have devastating consequences. In this episode, we share how one cancelled policy became a $150K insurance mistake - and the lasting financial impact it had on a family.
When Life Changes Overnight
Emily Powell shared her father John’s story: a hardworking real estate business owner from Northland who was diagnosed with terminal brain cancer at 57. Initially, treatment under the public health system provided chemotherapy and radiation, but when these stopped working, his family searched for alternatives.
That search led them to a drug funded in internationally but not in New Zealand. Without the right cover in place, the costs landed squarely on the family – $130,000 for treatment and an additional $20,000 for regular scans. This insurance mistake, cancelling medical cover years earlier after a heart attack, meant John’s life insurance was the only policy left.
The Ripple Effect of an Insurance Mistake
The $150K insurance mistake didn’t just affect John – it had ongoing effects across his family. His wife, also his business partner, had to step back from work to care for him. At the same time, the real estate market turned downwards, forcing them to hire extra support to keep the business running.
Instead of enjoying time together free from financial stress, much of the life insurance payout was used to cover medical expenses and lost income. The insurance mistake of cancelling cover left the family shouldering unnecessary burdens alongside the grief of losing a loved one.
Lessons Learned
Stories like this highlight the risks of assuming “the worst is behind me.” Insurance premiums may increase with age, but there are smarter ways to manage them – such as raising policy excesses rather than cancelling altogether.
Emily’s takeaway was simple: insurance, a will, and even an emergency fund aren’t luxuries – they’re essential safeguards. Losing a loved one is hard enough without financial chaos on top.
Key Takeaways
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Cancelling cover after a health event can lead to devastating financial consequences later.
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Medical costs not funded in New Zealand can quickly exceed $150K.
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Life insurance can help, but it doesn’t replace medical cover or income protection.
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Planning ahead – insurance, wills, emergency funds – protects both you and your family.
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Financial decisions made today can impact loved ones for years to come.
Next steps:
At Lighthouse Financial, we help you create a protection strategy that works – so you and your family are covered when it matters most. Book a chat with the Lighthouse Insurance team today.
If you’d like to learn more, check out these other episodes below.
For a no obligation discussion to see how we can help you on the path to wealth, please contact us.
Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
