I am covered by workers compensation, why do I need income protection?

Workers compensation only applies to employees (not the self-employed, sole traders, independent contractors), and only covers work-related injuries or illnesses. Accidents can happen anywhere, not just at the work place. Even if your illness or injury is covered by workers compensation, benefits are capped under different state regulations, in terms of both the amount of weekly benefit and the length of time they are payable for. For many, the benefits payable under workers compensation will be well short of their normal weekly income and inadequate to support their life style.

But if I am disabled, won’t I qualify for some sort of disability pension from the government?

As at October 2012, the maximum disability support pension, which is means tested, was $536.70 per fortnight for a member of a couple. That’s an income of $13,954 a year, which is well below half the average Australian income. Would that support your current lifestyle, let alone one in which you are disabled?

I’ve got enough cover in my superannuation, why do I need to talk to you?

If you’re an employee, chances are that you’ve got some sort of cover inside your super fund. But do you know how much you actually have?

Many people only have the default level of cover, which for those with families and debts will most likely be inadequate.  Rice Walker Actuaries estimate that the cover held by those with life insurance through their superannuation only represents 20% of the cover actually needed.

Is Business Expenses the same as Business Interruption?

Business Interruption Insurance is generally there to cover the loss of income that a business suffers after a damage has occurred to the business structurally and while the facility is getting rebuilt or refurnished it will pay you a portion of your profits. Things like fire, flood or vandalism are reasons why a company might hold Business Interruption insurance. Business expenses however, steps in if it is YOU that cannot work, rather than your premises. Both Business expenses and interruption are complimentary to each other and are two sides of the one coin.

Do people ever really claim on these policies?

  • The risk of being diagnosed with cancer by the age of 75 is 1 in 3 for males and 1 in 4 for females. By age 85 it is 1 in 2 for males and 1 in 3 for females.
  • Approximately 1 in 5 Australian adults will experience a mental disorder at some time in their lives.
  • Before the age of 65 there is a 3 in 5 chance you will be unable to work for a month. And a 1 in 3 chance that you’ll be disabled for 3 months or more.
  • Around 60,000 Australians will suffer a stroke each year. (One stroke every 10 minutes)
  • Out of the three million people aged 45 years and over who retired in the 2008/9 year, nearly one quarter (23%) were forced to retire due to “sickness, injury or ill health”.

If you think nothing will happen to you, think again.

How does Trauma Insurance differ from my Private health insurance?

While your private health insurance will usually cover almost entirely the majority of the costs associated with private hospital treatment, the exception comes with the cost of the medical practitioners’ charges. Most specialist doctors charge large fees for the kind of work that they do, and while Private Health Insurance covers a portion of the charges, usually there is a significant gap between what Private Health Insurance can provide and the actual expenses. The funds Trauma  Insurance provides can be used for any purpose the policy owner chooses, whether it’s for the reduction of debts, to seek specialist or alternative medical treatment, or even make lifestyle changes (such as reducing working hours).

Insurance companies just don’t pay claims.

Insurers do pay claims. In fact, life insurance companies pay out almost $10 million every working day in claims to customers. In 2011, TAL paid in total $565.2m in life insurance claims, including claims for:

  • Death – $300.5m. The most common claim cause being cancer (32%)
  • TPD – $75.3m. The most common claim cause being cancer (36%)
  • Trauma – $43.8m. The most common claim cause being cancer (63%)
  • Income Protection – $145.6m. The most common claim cause being musculoskeletal (41%).

These companies don’t just pay claims, they pay large ones.

Life Insurance isn’t affordable.

When you’ve got so many things to spend your money on, insurance may seem like an unnecessary luxury.  When you think of the costs associated with sickness and injury, such as hospital and medical costs, not to mention the lost income that could result from months or even years out of the work force. Its helps put the costs of insurance in perspective.

Life Insurance is likely less expensive than you think. For example, a 35 year old male, non-smoker applying for $500,000 of Life Insurance cover the monthly premium would be approximately $30. A 35 year old female, non-smoker applying for $500,000 of Life Insurance cover the monthly premium would be approximately $25. Compare that to what you pay to insure your car for each month.

Are there extra costs by dealing with a broker?

Utilising the services of a broker does not represent an additional premium to you. Interestingly enough, often when you deal directly with the insurance company you can end up paying more than if you used a broker to place the business on your behalf.

What about those companies you see on TV or online?

There’s been this huge influx of online solutions and TV special offers, where you can go on and get insurance in a matter of minutes. But life insurance is not a simple product. At the end of the day it’s a legal document, a complex legal contract with a large financial institution. It’s something which people are going to get themselves into a lot of trouble by making the wrong decisions through not knowing what they’re leaving on the table in their efforts to find the lowest premium.

Finding the cheapest quote is easy, finding the best value is the challenge we help you with.