When life throws you a curve-ball… Levels of insurance cover

It’s a beautiful day, the sun is shining and you’re out with friends celebrating, with literally not a care in the world, it’s the year end and it’s been a great year.

The last thing you can remember is stumbling over something behind you.

Waking up that morning you’d never have imagined that a fall later that day would change the trajectory of your entire life.

This scenario, unfortunately, played out for one of our members, and we recently witnessed first-hand the importance of having sufficient personal insurance cover in place. You really never know what’s around the corner!

Lisa* was at a Christmas party with friends a couple of years ago when she blacked out and fell backwards, experiencing an impact to her head.

Through the injury and the discovery of an existing condition that was unknown to her at the time, she sustained an Acquired Brain Injury. This day changed her life forever.

Since her accident, she has been in the care of her parents, who are also dealing with their own health issues. At the time her partner could not afford to hire full-time care at home for Lisa, and needed to keep working himself to cover their ongoing bills and expenses.

Once it became apparent the Lisa wouldn’t be able to return to work, we worked with her husband and her insurer for over three months on a TPD claim which, after a lot of back and forth, was eventually successful and a payout was made.

For the first time since her accident, Lisa and her husband were able to live together again. The benefit amount received was sufficient to provide ongoing care and cover additional medical and rehabilitation costs for the foreseeable future.

Despite such a traumatic experience occurring for them, at least having the financial resources now to move forward has meant that Lisa’s quality of life can now be the best that it possibly could be.

Knowing exactly how much cover is enough for you can often be tricky. But ensuring that you do have sufficient cover is one of the most important decisions when applying for insurance.

There is no point in being under-insured as it’ll be little help to you at the time when you need it most!

Below is some information along with guidelines on the levels of insurance cover we recommend for our members:

Life Cover

A lump sum selected at the time of policy application, that is paid out in the event of your passing.

  • Funeral and final expenses (we generally factor in $20,000); plus
  • Balance of your debt; plus
  • An amount that can be invested to produce income for any loved ones who may currently rely on your income

Total and Permanent Disability Cover

A lump sum selected at the time of policy application, that is paid out in the event of you suffering an injury or illness that prevents you from EVER returning to work.

  • Balance of your debt; plus
  • An amount that can be invested to produce income. This can be for both yourself and any loved ones who may currently rely on your income.

Trauma Cover

A lump sum selected at the time of policy application, that is paid out in the event of you being diagnosed with a pre-determined list of serious illnesses or injury (as per the policy schedule).

  • Balance of your debt; plus
  • Two years worth of your current net income. This will give you serious choices when it comes to taking time off work and/or covering costly medical expenses.

Income Protection Cover

An amount up to 75% of your salary paid to you monthly in the event of you suffering an injury or illness that prevents you from returning to work temporarily.

  • Apply for 75% of your income
  • Select a benefit period of to age 65. There are also shorter benefit periods of 2 years and 5 years commonly available, that will result in lower premiums. However, in most cases, we would prefer the certainty of long-term payment should the worst happen.
  • Select a waiting period of 30 days. There are also longer benefit periods of 60 days, 90 days and even 2 years commonly available. These will also result in lower premiums. However, in most cases we would prefer the certainty of payment after just 30 days of being unable to work. This being said, if you are in a particularly strong financial position, you may choose to extend your waiting period.

The reason people take out cover in the first place is to have the peace of mind. They and their families will have protection financially in the event of something unexpected or unplanned occurring. Of course, money doesn’t change the fact that you and your loved ones are suffering. However, not needing to worry about money can be a real relief. In the long term, it will ensure that you can still reach your goals. 

If you would like some assistance to determine what level of cover is right for you, please get in contact with us today.

You may also wish to run some quotes using our helpful Insurance Quoting Tool.

* Name has been changed to protect the identity of our member


Disclaimer: all information contained within this article is of a general nature. Do not rely upon it when making financial decisions. Please consult a professional financial advisor or planner (like us!) before acting.