Why consider crisis insurance?
Most people wouldn’t dream of driving without car insurance, or living in a house without home and contents insurance, so it is remarkable that the majority of Australians do not think about protecting their families through life insurance, in the event of death, accident or illness 1.
With the incidence of cancer increasing year on year 2 and the occurrence of cardiovascular diseases preventing many families from living a full life because of disability 3, it is becoming increasingly important to consider crisis cover as part of a life insurance portfolio.
Many Australian families struggle, both emotionally and financially, when a family member is diagnosed with a life threatening or debilitating medical condition. By taking out crisis insurance cover you can help to ease the financial burden should you suffer a traumatic event.
You might think ‘it’ll never happen to me’, but you may think again after considering these facts.
Cancer is a leading cause of death in Australia with more than 43,000 people expected to have died from cancer in 2010.
The most common cancers in Australia are skin cancer, cancer of the digestive organs, breast cancer, lung cancer and prostate cancer 4. 93,200 new cases of cancer will be diagnosed in Australia this year, that’s 255 every day. Only 50% of these cancers are successfully treated 5.
- 1 in 6 men will get prostate cancer 6.
- Almost 3,300 men die each year of prostate cancer and around 20,000 new cases are diagnosed every year 7.
- Each day about 32 men learn news that they have prostate cancer – tragically one man every three hours will lose his battle against this insidious disease 8.
- Breast Cancer
- 1 in 9 women are at risk of being diagnosed with breast cancer by the age of 85 9.
- 32 women were told yesterday they have breast cancer; 32 women will be told today…and tomorrow10.
- 2,707 women die from the disease in a single year – making it the leading cause of cancer-related death in females11.
- Over 480,000 Australians are treated for skin cancer each year – that’s over 1,000 people every day 12.
- Over 1,700 Australians die from skin cancer each year 13.
- Australia has the highest rate of skin cancer in the world. Skin cancers account for around 80% of all new cancers diagnosed each year in Australia. Each year Australians are four times more likely to develop a common skin cancer than any other form of cancer 14.
Cardiovascular disease (CVD)15
CVD is the term used for heart and blood vessel diseases and stroke.
- CVD kills 1 Australian every 10 minutes and prevents 1.4 million people from living a full life because of disability caused by the disease.
- CVD is one of Australia’s largest health problems.
- CVD affects 2 out of 3 families 16.
So, what is crisis insurance cover?
Crisis insurance cover, also known as trauma cover, pays a lump sum should you be diagnosed or suffer one of the specified trauma illnesses or events, Some of the ‘illnesses’ are procedures and not illnesses e.g. Coronary By-Pass, Angioplasty, Aorta Surgery, Heart Value Surgery or Major Organ Transplant. Depending on your insurer, this lump sum payment may be up to $2,000,000 on diagnosis.
You can take out crisis cover between the ages of 16 and 64 and it covers you 24 hours a day, 7 days a week anywhere in the world, depending on your insurer.
How can crisis cover benefit you?
You should speak with your financial planner about the amount and type of cover that you need. Everyone’s circumstances and situations are different so discussing your needs with your adviser is a good first step when considering life insurance.
Should you be diagnosed with a life threatening or debilitating health condition, crisis cover may help you:
- to pay for any additional medical bills or necessary treatment
- to replace lost income while ill or recuperating
- to pay for home care or auxiliary services while recuperating
- to replace lost income of a family member who is caring for you
- to pay for rehabilitation
- to pay for a change in lifestyle, for example, access ramps, wheelchairs or manual car controls.
Speak to your financial planner today to find out about the most appropriate cover for you.
Each insurer differs, but most policies can cover you for a variety of crisis events such as:
- Cancer (female organs)
- Cancer (general)
- Cancer (male organs)
- Coronary by-pass surgery
- Heart attack
- Accidentally acquired HIV
- Aorta surgery
- Aplastic Anaemia
- Benign brain tumour
- Kidney failure
- Chronic liver disease
- Chronic lung disease
- Dementia & Alzheimer’s disease
- Viral Encephalitis
- Heart valve surgery
- Loss of hearing
- Loss of independent existence
- Loss of limbs
- Loss of speech
- Major head trauma
- Major organ transplant
- Motor neurone disease
- Multiple sclerosis
- Muscular dystrophy
- Parkinson’s disease
- Primary pulmonary hypertension
- Rheumatoid arthritis
- Severe burns
Crisis Insurance Case Study *
Doug has been working as an accountant for the past eight years in Newcastle where he lives with his wife and three kids. Unfortunately for Doug and his family, he was recently diagnosed with bowel cancer. Doug’s diagnosis meant that he was required to undergo extensive chemotherapy, and as a result he was unable to work for six months. As you can understand, Doug and his family were extremely devastated when the doctor diagnosed the condition. As well as dealing with the emotional stress, they also had to consider how they would pay for the mortgage, school fees and other bills without Doug’s income.
Fortunately for Doug and his family, their financial adviser had recommended that both Doug and his wife take out crisis cover on top of their Term Life cover. When Doug received the news from his doctor, he called his adviser immediately who submitted a claim to his insurance company. His claim was assessed and Doug received a lump payment of $250,000. The payment enabled Doug and his wife to pay for his medical fees, mortgage and school fees all of which his income would normally have paid for.
The lump sum payment meant not only that Doug and his family’s bills were taken care of but also meant that Doug could focus all his energies on getting better instead of stressing about financial concerns.
* This is an example only to illustrate the potential benefit of taking out crisis cover, and should not be relied upon as indicative of benefits payable under any crisis cover products.
5. The Risk Store
6. The Risk Store
10. The Risk Store
12. Australian Institute of Health and Welfare (AIHW) & Australasian Association of Cancer Registries (AACR). Cancer in Australia an overview, 2006. Cancer Series Number 37. Canberra: AIHW, 2007.
13. Australian Bureau of Statistics (ABS). Causes of death 2007. 3303.0. Canberra: Commonwealth of Australia, March 18 2009.
14. Australian Institute of Health and Welfare (AIHW) & Australasian Association of Cancer Registries (AACR). Cancer in Australia an overview, 2006. Cancer Series Number 37. Canberra: AIHW, 2007.
16. The Risk Store
Source: AIA Australia Limited, September 2011