Insurance protects your money and your time
Affording time off work to spend with a sick loved one, or protecting your income even when you can’t work are just two benefits of insurance.
Most people generally have some form of insurance — but is it the right type or the right amount?
Outlined below are two examples of how different insurances work together to ensure you and your family are adequately protected.
Example A: Life and Trauma Insurance
Maria, 40, and Tony, 47, lived with their four-year-old twin daughters and Tony’s teenage son from a previous marriage.
Tony earned $90,000 a year working in IT and frequently travelled interstate on business. A stay-at-home parent, Maria had been working one day a week as a marketing consultant since the twins began pre-school. She planned to return to work full time when the twins reached school.
Tony and Maria took out life insurance, based on a lump sum taking into account the children’s care, education, carer fees and medical expenses as well as an ongoing income for the children. They also took out trauma insurance.
A year later, Maria was diagnosed with ovarian cancer. Maria and Tony decided to use their trauma insurance benefits to pay off some debts while Maria underwent treatment.
Tony changed positions at work to travel less, so the family could spend more time together. Sadly, Maria passed away eleven months into her treatment.
With Maria’s life insurance benefits, Tony took three months unpaid leave to look after the children during what was a very difficult time for all of them. He hired a nanny and a house-keeper to help with running the children’s daily lives, which was financially manageable using the insurance proceeds.
* Based on a real claim. Names have been changed.
Example B: Trauma and Income Protection Insurance
When starting up a new business, Ross took out life insurance, plus trauma and income protection insurance to ensure he and his wife were not put under financial pressure if he were to suffer an illness or injury.
Eighteen months into the new business, Ross was diagnosed with throat cancer. He had to undergo immediate surgery, then begin chemotherapy treatment.
Ross used the trauma benefit to pay for the treatment costs. It also meant his wife could afford to take time off work to be with him through his treatment. The income protection benefit covered their day-to-day living expenses, including the mortgage and other essential bills. Most importantly, it meant that Ross wasn’t forced back to work while he was recovering.
* Based on a real claim. Names have been changed.
There are still many misconceptions surrounding insurance — the main being “I’m young and healthy. I don’t need insurance!”
Taking out insurance doesn’t mean “something bad will happen”, but it will protect your family’s income or reduce financial pressure, should that be the case. Examples of claims made include:
|
Age at claim date |
Sex |
Cause of claim |
Sum insured |
Occupation |
Policy held for (years) |
|
Term Life claims |
|
|
|
|
|
|
33 |
F |
Pregnancy complications |
$100,000 |
|
4.7 |
|
37 |
M |
Brain tumour |
$281,897 |
|
3.6 |
|
34 |
M |
Motor vehicle accident |
$1,060,000 |
|
0.6 |
|
Trauma claims |
|
|
|
|
|
|
30 |
F |
Breast cancer |
$103,000 |
Solicitor |
1.1 |
|
38 |
M |
Hodgkin’s disease |
$90,703 |
Technician |
8.3 |
|
30 |
F |
Head trauma |
$105,000 |
Home duties |
2.8 |
|
Income Protection claims |
|
|
|
||
|
31 |
F |
Chronic Fatigue Syndrome |
$5,344 pm |
Management |
0.6 |
|
37 |
F |
Brain tumour |
$2,830 pm |
Receptionist |
4.7 |
|
31 |
M |
Skull fracture |
$4,670 pm |
Company director |
4.8 |
Source: A selection of Asteron claims data
If you believe your current levels of insurance should be reviewed before your next Planning Meeting, send copies of your current insurance policies to us and we can assess whether you have any funding shortfalls, in the event of death, accident or injury to you or any members of your family.