There is no doubt that the very thought of claiming on your own insurance policy is depressing, but the research proves that you (and even me) may be unable to work for an extended period during your working life due to sickness or an accident. The problem is that nobody has any idea of when that might happen. Please try to fight the urge to stop reading now and ‘worry about it later’ because there is an important message here. 

It’s a confronting topic that makes us think about our own mortality. However, as a financial adviser I have helped many clients through the process. The worst can happen to anybody. If it does happen to you, you want to make sure that:

i) you took due care (supported by advice and help from someone in the know) when preparing your initial application, and
ii) that you actually have the cover in place. The first question after, ”are you ok?” is often, ”do you have insurance?” If you think your answer would be, ”I think so” or  ”no”, please stop now and consider how your family would cope in this situation, or more to the point, how would you cope financially if something happened to a beloved family member?

Before you get to that point, where do you start if you don’t have cover? 

Firstly, at Leenane Templeton you can talk with Roger Ward a licensed financial adviser who specialises in Personal Risk Insurance. The application process is so important to ensure a stress-free outcome in the event of a claim. It has to be done right; and the conditions and definitions (the boring stuff) must be spot on. Don’t be satisfied with approval of cover that required very little in the way of medicals or blood tests. You may think you have cover but it’s a nightmare to be told at claim time your application is rejected because you ‘broke the rules’ since you forgot (often genuinely) to tell the insurer something small but now seemingly crucial. 

A professional adviser like Roger will ensure you have insurability from the very moment the cover is granted. Yes, you will have to pay for that advice, but believe me it’s invaluable. As I say, the last thing anyone wants when they have suffered a serious injury or have been diagnosed with a life-threatening illness is a delay.  Or worse still, have any doubt the claim will be paid.

This is where the role of an adviser throughout is so important. Your adviser will know someone ‘higher up’ and ‘in-house’ who can back them up through the process. That means, it’s not only your adviser who is onto the insurance company but their contacts, who are often part of a large Head Office which the insurer does not want to get offside. This alone is a huge factor over buying insurance ‘online’, because who will be there to back you up?

Roger is ready to answer any questions about insurance you may have. 
Call (02) 4926 2300 or email us. 

Please don’t put the insurance talk off any longer – and this is the pulling on the heart strings part – do it for your kids and family if for nothing else. 

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Most life insurance policies will allow you to buy extra cover for just this event. It’s called a Total and Permanent Disablement (TPD) benefit. It’s usually offered to working people aged between 16 and 65, with policies also available for homemakers. Cover can be arranged privately or through a superannuation fund or a mixture of both. The benefit is paid as a lump sum.

Like all insurance policies, it’s important to understand when the benefit will be payable. This is particularly important with TPD cover where the insurer will generally pay out in the event that it is unlikely you will ever be able to work again. But what does that mean?

To qualify for payment you will generally need to have been off work for at least six months due to the disability. You will be required to lodge medical reports from your own doctors and be examined by the insurer’s medical specialists. Depending on the wording of the policy, the insurer will decide if you can work again in:

• Your Own occupation

• Your Own or a similar occupation

• Any occupation, or

• Conduct Home Duties.

Some policies provide other definitions of disablement such as; loss of limbs, blindness or inability to perform the activities of daily living. Activities of Daily Living (ADL) is often seen in automatic accepted cover, such as cover offered through your employer’s group Superannuation policy. This definition can be difficult to meet requiring a far greater severity of Total and Permanent Disability as compared to the conditions that would satisfy an Own, Any or Home Duties definition.

Since 1 July 2013 any lump sum payments paid from a TPD policy held within a super fund cannot be made to the beneficiary unless and until that person satisfies a condition of release as defined in the legislation. This all but rules out holding “own occupation” TPD policies within super. As a result of this legislative change, there are differences between the Any Occupation definition of cover held through Superannuation as compared to the Any Occupation definition on cover held outside of Superannuation.

There is a natural tendency to look for the lowest premium in selecting insurance. With TPD cover, being sure the policy definitions are appropriate for your own circumstances is absolutely vital. After all, there is no point having a policy that doesn’t pay out when you need it.
 

If you wish to discuss your TPD policy please contact our expert risk insurance staff here at Leenane Templeton.

Call (02) 4926 2300 or email us.

The post Will your TPD policy pay out when you need it? appeared first on Newcastle Financial Planners & Financial Advisors.

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)

Disclaimer

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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