Busting Personal Insurance Myths

If you apply for a ‘no medical and no blood test’ personal insurance, don’t assume you will be covered for any medical condition you already have.  Pre-existing health problems are generally excluded in the fine print of a personal insurance policy.  However, you might not find this out until years later at the time of a claim.

The advertising makes it sound so simple and convenient, but if there’s no health assessment and very few questions up front, it usually means that enquiries will be made when it comes time to make a claim.

Whether you realise or not, your signature on an insurance application generally gives the insurer written permission to access your medical records, including reasons for GP, specialist and hospital visits; and also your history of Medicare claims.

Meanwhile, you may be paying for years of cover that you have no chance of claiming on.

There are two important points about personal insurance worth making here.  Firstly, very few people are ever asked to undergo a full medical for insurance.  The reason is simple; the insurer has to pay for it.  A blood test is more common and if deemed necessary, the insurer pays for it and simply sends a nurse to your home or work at your convenience.

Secondly, the purpose of underwriting (i.e. asking lots of questions up front and maybe having a blood test) is to work out what you can be covered for, which significantly increases your certainty of being paid a claim.  It also ensures you pay only what you have to.

Arranging insurance through a reputable licensed adviser is not as scary as you may think.  They will assess your situation and recommend what you need.  That’s not a bad thing because they will often highlight issues you may not have thought about.  You simply buy what you can afford.

There are some very good insurance advisers in our local community and you will know where you stand with your insurance from the start.

You are welcome to contact me for a referral to a good insurance adviser or a second opinion on advice you have received.



Is your Personal Insurance Adequate?

The purpose of personal risk insurance is to maintain your lifestyle and financial prosperity when something goes wrong.  There are several types of health risks that you should consider but there is only one outcome that is important.  That is, to have the right amount of money delivered to the right person at just the right time it’s needed.

You already know that things go wrong in life, so ask yourself these questions:

  1. “If I die before my time, where would the money come from to keep the house, pay the bills, as well as raise and educate my children?”
  2. “If I had a serious accident and could never work again, could I / we get by for the rest of our lives with added costs of rehabilitation?”
  3. “If I developed cancer, could we afford the one or two years of out-of-hospital (out-of-pocket) treatments that most recoveries entail?”

When you arrive at a realistic answer, check your super to see how much insurance you have there.  It probably won’t be nearly enough.

According to Canstar, 83% of people sign up for the default cover in their super account.  The amount of cover is typically low.  Superannuation statistics published by ASFA in December 2016 indicate that average super account balances in 2013-14 year were around $98,500 and $55,000 respectively for males and females.

This means that the average lump sum payout for a death or total & permanent disability insurance claim would be the equivalent of about one or two years of income at best.  And it won’t help at all to pay your way through the early years of a serious health trauma such as cancer, heart surgery or stroke.

If you think you can’t afford insurance, consider increasing your insurance in superannuation.  The premiums are automatically paid from your super account.  Although this will have a slowing effect on your retirement savings, it’s a compromise that can help a lot with the family budget, particularly during the expensive years of home making and child raising.

Call me direct on 0408 756 531 for a free appointment.  http://garyweigh.com