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Insurance: You may not need it, but make sure you have it
There are all sorts of reasons to have insurance. But the simplest and most important is that it’s there when you need it. The following stories are about real life and real people. The names have been changed.
Term Life Insurance
Alex was a small business owner. Twelve years ago he took out a Term Life policy, nominating his wife, Sarah, as sole beneficiary. His policy was for one million dollars, indexed to keep pace with inflation.
After becoming ill with a Melanoma, Alex passed away. His wife Sarah lodged a claim. Because Alex had indexed his cover to inflation Sarah received a total of $1,163,775. As Sarah was the sole beneficiary she received the payment quickly, protecting her from financial stress in the aftermath of her husband’s death.
Income Protection Insurance
Joe is a 35 year old Project Manager working in the building industry. He is married with two young children. Three years ago Joe took out an Income Protection policy.
Joe and his family returned home from an overseas posting to find themselves in the midst of a property boom. Buying the family home meant taking out a large mortgage.
Not long after this purchase, Joe was diagnosed with a blood vessel malformation that put pressure on the lower spinal nerves and reduced his mobility. He required surgery and physiotherapy as well as a long period off work for rehabilitation.
Under his Income Protection policy, Joe claimed a monthly benefit payment of $6,619 and the attached nursing benefits for the time he was in hospital. Joe and his family were able to pay their mortgage costs and other expenses despite his time off work because Joe’s insurance protected him and his family.
TPD Insurance
Chris had a young family and took out a Life policy which also included Living (Trauma), Total and Permanent Disability (TPD) and Death cover.
Shortly after his 50th birthday he was diagnosed with cancer. After all necessary medical checks were assessed, Chris received a Living benefit of $37,750.
Once his condition deteriorated and Chris was no longer able to work, he claimed his TPD benefit. As he had not worked for 6 months and his condition was terminal, Chris was paid $113,336. Since he had already supplied a lot of medical information for the Living Insurance claim, only an update from his treating specialist was needed in order to release his TPD benefit. That meant he received the money promptly and without having to go through more medicals.
The insurance Chris had in place gave him the money to get his affairs in order, receive the best possible medical care, help settle his debts and go on a final holiday with his family. It also protected his family from having to worry about funeral costs and other immediate bills.
Living (Trauma) Insurance
Jenny is married with two children. As she was self-employed, she decided to protect her family’s financial position by taking out a Standalone Living Insurance policy.
A couple of years later, Jenny was diagnosed with a rare form of cancer. She lodged a claim against the Living Insurance benefit. The medical reports confirmed Jenny’s medical condition, and as she satisfied all of the policy terms and conditions, she was paid in excess of $300,000.
Jenny’s decision to cover herself against medical trauma gave her crucial financial flexibility at a time of great stress. She used the proceeds of her claim to meet the extensive costs of the latest cancer treatments. Her insurance payment also gave her the option to sell her business and work part time to give herself the best chance of recovery.
More information on how insurance can protect you and your family: