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

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.

Prostate Cancer

• 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.

Skin Cancer

• 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:
 

• Angioplasty
• Cancer (female organs)
• Cancer (general)
• Cancer (male organs)
• Coronary by-pass surgery
• Heart attack
• Stroke
• Accidentally acquired HIV
• Aorta surgery
• Aplastic Anaemia
• Benign brain tumour
• Blindness
• Cardiomyopathy
• Kidney failure
• Chronic liver disease
• Chronic lung disease
• Coma
• 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.

Crisis Insurance

Endnotes:
1.  http://www.lifewise.org.au/about-the-lifewisecampaign/underinsurance,-a-problem.aspx
2.  http://www.aihw.gov.au/cancer/data/acim_books/AllCancers.xls
3.  http://www.heartfoundation.org.au/HeartInformation/Statistics/Pages/default.aspx
4.  http://www.cancer.org.au/aboutcancer/FactsFigures.htm
5.  The Risk Store
6.  The Risk Store
7.  http://www.prostate.org.au/articleLive/pages/Prostate-Cancer-Statistics.html
8.  http://www.prostate.org.au/articleLive/pages/Prostate-Cancer-Statistics.html
9.  http://www.cancer.org.au/aboutcancer/cancertypes/breastcancer.htm
10.  The Risk Store
11.  http://www.cancer.org.au/aboutcancer/cancertypes/breastcancer.htm
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.
15.  http://www.heartfoundation.org.au/Heart_Information/Statistics/Pages/default.aspx
16.  The Risk Store

Source: AIA Australia Limited, September 2011
 

Need Crisis Insurance? 

Call Leenane Templeton today and speak with our team about personal insurance

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Until you experience a serious injury or illness, it’s very easy to think that it’ll never happen to you.

However there are a lot of complications involved in suffering an injury or illness, or seeing someone close to you experience this misfortune.

Financial worries should be the last thing on your mind as you concentrate on improving your health, however you will eventually need to make some decisions regarding your finances and here are our tips for coping with injury and illness.

Choosing the right health cover

Some people swear by private health cover as it can provide you with more power of your choice of doctor, access to private hospitals and shorter waiting periods for elective surgery. If you can afford private cover and are considering taking it up, be careful to read the terms and conditions associated with your cover before agreeing to it and ensure you’re aware of all of the exclusions listed under the cover. As an example, if physiotherapy cover is something you think you may require, ensure it is not excluded from your chosen health cover option or choose an alternative healthcare fund. For more information on health insurance, please speak to your healthcare provider or financial planner.

Rebates

Many Australians paying premiums for private healthcare cover are eligible for a 30% rebate on the cost of their premiums from the Federal Government. You can claim your rebate by registering with your health fund when applying for cover, make a claim for a one off payment at a Medicare office near you or claim the rebate in your annual tax return.

The Government also offers a rebate for some out of pocket medical expenses, known as the Medical expenses tax offset. You can claim this rebate on your own expenses or the medical expenses you’ve incurred on behalf of your spouse, your children and your invalid relatives.

For more information on these rebates, speak with your financial planner, visit the ATO website or phone the Government’s Aged and Community Care InfoLine on 1800 500 853.

Insurance cover

Life insurance can provide you with a degree of security in times of injury and illness and many insurers provide life insurance to people aged up to 75 years. Not only will life insurance give you peace of mind over the control of your assets, but many life insurance policies will provide you with some of your life insurance entitlement if:

• you are injured
• you are diagnosed as terminally ill
• you suffer a trauma such as a stroke, heart attack or are diagnosed with a degenerative disorder such as Parkinson’s disease or Multiple Sclerosis.

(Please note, you will need to be covered by a life insurance policy that offers ‘trauma insurance’ to receive this benefit).

It is important that when you make any application for insurance that your responses to the insurer’s questions are very clear and truthful. Expanding on your answers and clarifying your statements will improve your chances of receiving an insurance payout should you ever need to make an insurance claim.

Making an insurance claim

You may need to fill in a number of forms to make an insurance claim and provide a number of documents to your insurer.

Don’t hesitate to contact your insurer if you have any queries while you’re completing these forms – providing the correct information in your initial application is likely to save you and your insurer time while they process your application. If you’re facing financial hardship, mention this in your initial claim as your insurer will then know to treat your claim as a priority. Above all, request the help of your financial adviser when making a claim. They have experience in claims management and in dealing with
insurance companies.

Once they’ve received your insurance claim, insurers are required to decide on your claim and notify you of the result of your claim within 10 days of receiving all of the material that they require from you. If your claim is denied, you must be given a reason for the denial and either referred to another insurer or the industry ombudsman.

Accessing your assets

When medical costs start weighing you down, you may want to consider accessing some of the value of your assets. Consider downsizing to a smaller home, drawing on any investments you have and accessing any superannuation or annuity and allocated pension funds available to you.

Once again, seek the assistance of your financial planner for information on the best approach for you. They will be able to advise you on the most appropriate way for you to proceed.

Organise your affairs

There is no time like the present to conduct a few unpleasant, but necessary, tasks such as creating or updating your will and discussing your wishes for your future with your family and friends. A little time committed to these tasks now will be greatly appreciated by your family and friends should you become very seriously ill or injured.

Source: Zurich Financial Services Australia, March 2011

For more information about your financial risk situation speak with Leenane Templeton about our Financially Well Organised meetings which help to ensure you have all of your affairs in order.  Call 02 4926 2300 or visit our website for further details about Newcastle accountants Leenane Templeton and for information for self managed super funds.

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