Jul 29

Protecting your financial security

123rf - Protecting your financial security


Australians are becoming more educated about their health – whether it’s actively pursuing preventative measures or a greater awareness of healthcare options. Combined with improvements in medical technology and clinical practices, there has been a marked decline in the rate of dying from major health conditions in recent times. For example, the death rate from male cancer over the 20 years to 2007 fell by 16 percent. Due to this change in lifestyle and development in research we are living longer and therefore need to take measures to protect ourselves against survival. One aspect you need to determine is whether or not you are protecting your financial security.

Living longer

Australians are living longer – and with that is the increased likelihood you’ll experience a major health issue. But survival rates are also on the increase due to medical advancements.

• Cardiovascular disease is the number one cause of death in Australia but has increasing survival rates
• Long-term survival rates among stroke patients has more than doubled since the ‘70’s

The number of Australians living with long term health issues is also increasing. It’s estimated that as many as 1.7 million Australians have undiagnosed ‘type 2’ diabetes. More than 4 million Australians are living with some form of disablement.

Protecting your financial security

If the unforeseen was to happen to you, how would you protect yourself and your loved ones? Consider the financial impact of absences from work and medical expenses. Without a plan you may struggle to maintain your lifestyle during recovery.

Part of your plan should include considering personal insurance to protect you financially against serious disablement or illness.

Trauma or Total and Permanent Disablement – or both?

Many Australians have some type of insurance cover through their super – but are you sure it will be enough or it will cover you if you suffer a serious health condition and survive?

Trauma and Total and Permanent disablement (TPD) cover will pay you a lump sum benefit which will assist in improving the quality of your life. Importantly, it gives you choices – treatment and rehabilitation, future employment options, home modifications. Each one is unique to your circumstances.

Trauma cover pays a lump sum if you suffer a serious health condition or trauma event such as a heart attack or cancer. Trauma cover provides the financial assistance you need so you can focus on your recovery. It is worth noting that trauma cover is not usually available through your super fund so this type of cover is definitely worth considering.

If you were to become totally and permanently disabled and were unable to work again, then payment of a TPD benefit would provide financial relief. TPD covers illnesses and injuries that are not usually covered under trauma cover. The lump sum can be used to meet immediate expenses and payment of debt and can also be structured to provide an income for you and your family over the long term. If you do have TPD cover in your super, you’ll need to assess whether it’s enough?

Make sure you get the most appropriate amount of cover

The consideration is usually less about which cover is right for you but how much of each type of cover you need. At such a stressful time, the last thing you want to think about is money issues. Personal insurance is an effective way to protect you and your loved ones from the financial distress that many illnesses can cause.

Source: AIA Australia, May 2014

1. AIHW – Australia’s health: In brief (2010)
2. Australian Bureau of Statistics (2008 – 2011)
3. AIHW – Cardiovascular disease mortality: Trends at different ages (2010)
4. Stroke society of Australasia (2011)
5. Diabetes Australia (2011)
6. Australian Bureau of Statistic (2009)


Speak to one of our qualified risk management specialists or financial planners, so that you can get the help you need to protect your financial security.
Call (02) 4926 2300 or email us.

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