Tag Archives: life insurance

Personal Insurance… Do I really need it?

We are all covered by so many insurances already – WorkCover, TAC, Health insurance – it’s understandable that people would question the need for further insurance but like many things that are ‘so called free’ there are always limitations, exceptions and restrictions.

I was reading in the Herald Sun about a lady by the name of Kerryn Barnett, a mum of 3 under 11 and how she contracted an infection that has effectively meant her stomach has stopped working. She hasn’t eaten a solid piece of food since Christmas day. Her infection has seen her lose about 15kg so far, and she suffers from severe nausea, vomiting, fatigue, muscle cramping and malnutrition. Doctors don’t know how or where she contracted the infection from but it has left her and her family’s life devastated. She has had to take time off work and has had to make the difficult decision about what treatment she should peruse to try to improve her situation.
Personal Insurance
Kerryn effectively had two options (1) removal of her entire stomach and a feeding tube inserted directly into her abdomen. This would mean that no food or drink would ever pass her lips ever again, the feeding tube would need to be replaced every 6 months and she’d be prone to infection or (2) have surgery to implant effectively a pacemaker in her stomach to regulate the nerves and muscles in her stomach. She chose option two as it would seem to give her a better quality of life however as the device itself is not on the Department of Health Prostheses List, her health insurance company won’t cover it. As a general rule, health insurance companies only fund surgeries that have been approved by the state Department of Health after extensive clinical trials. With only 22 of these operations been conducted in Australia, with an 80 per cent success rate, her insurance company won’t cover the $33,000 it costs for the device itself.

Kerryn is concerned about her health but most importantly she is concerned about how she is going to fund this cost, and how she will repay it (assuming its borrowed) especially as its unknown if she will be able to work again.

Kerryn was an ordinary mum, enjoying life with her husband, her daughter (11) and twin boys (8) until she caught this infection. Her life has been turned upside down and now is the time that she is finding out about what she is or isn’t covered for with the insurances she has. Some may think this is a rare condition and it won’t happen to me? Well, think about all the rare diseases, infections, and injuries that occur in the world, they add up when you put them together. And they have to happen to someone…..

The clear message from this article is not to rely on any one form of insurance cover to fund life’s bumps.  There’s not one insurance that covers you totally for everything and therefore at least a little of all or most covers will ensure that you have a backup plan if something goes wrong along the way.

Just as an example and depending on the wording and policy taken, if Kerryn had income protection, she could have been paid an ongoing amount of funds to replace some of her income while she was unable to work. If she had trauma insurance, this may have provided a lump sum of money to allow her options to cover the medical device, or assist with child care or assist with the household bills or even allow her husband time off work to care for her.

If you want to talk more about insurances including existing covers and limitations such as WorkCover, TAC, health insurance, salary continuance, life cover in super etc, please give JBS a call or drop us an email.

 


Stepped vs Level Premiums

Personal insurance policies may have a large effect on our cash flow. One factor which dictates how much you pay is whether your insurance premiums are structured on a stepped or level premium. If you’ve ever held any form of personal insurance then you may have come across these terms, however have you ever wondered what the differences is between the two? When your personal insurance policy is initially set up, you have the option to choose whether to have the premiums set on a stepped or level structure.

 
Having your premiums on a stepped structure would generally mean you pay lower premiums initially compared to a level structure.  Stepped premiums increase annually with the added risk of a potential claim.  The downside however is that over time your stepped premiums will increase each year as you get older. This method may not be desirable to some as the premiums may become too expensive to sustain over time.  In certain circumstance, stepped premiums are more favourable.

 
For example a 25 year old male may not be able to afford insurance premiums on a level structure, however in several years’ time he may be earning a larger income and thus be able to afford level premiums. So in the meantime he can put in place his personal insurance policy on stepped premiums to ensure he’s covered and once can he can afford to pay level premiums, he can change the premium structure.

 
Or you may have to take out an additional loan for a short period of time (say 5 years) and you can then ensure you have sufficient insurance to cover this debt for just the 5 years and cancel the policy once the debt is repaid.

 
A level premium is the second option you have and it calculates the risk over the life of the policy (assuming it is held to the expiry of the policy – age 65 and above depending on your policy) and spreads the cost of this risk.  Although initially more expensive to set up, insurance policies on a level structure will not increase over time (excluding any CPI increase).  A disadvantage to having level premiums is it may have a larger impact on your cash flow initially, however over time the savings will catch up.

 
The following table is an example of a 35 year old male with $500,000 of death insurance.

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*Please note premiums are shown in months. The above table is only an example, for personalised quotes please contact your adviser.

 
As shown above, stepped premiums are initially cheaper, however over time becomes much more expensive.  In the above example the insured person from age 35 to 60, will have paid $14,002 more under stepped premiums compare to a level structure.

 
Stepped and Level premiums are only one factor to consider when reviewing your insurance needs tailored to your needs. So if you’re interested to know more, please contact JBS for further details and advice.

 


Create | Protect | Enjoy – Movember, Supporting Men’s Health

Movember is an annual event  involving the growing of moustaches during the month of November to raise awareness of men’s health issues, specifically prostate cancer and other male cancers.  The fact this event attaches so much attention and is encouraged by the medical profession show the seriousness these health issues have on families.Mo

The facts:

  • Prostate cancer is the most commonly diagnosed cancer in Australian Men (20,000+ new cases per year)
  • 1 in 8 Australian men (1.3 Million) experience depression at any given time.
  • Every hour, more than 4 men die from potentially preventable conditions in Australia.

There are many complex reasons for the poor state of men’s health which include: 

  • Men not openly discussing their health and how they’re feeling
  • Reluctance to take action when men don’t feel physically or mentally well
  • Men engaging in risky activities that threaten their health
  • Stigmas surrounding mental health
  • Men are less likely than women to seek help for health concerns, and also less likely to use health care services

 

It is important that families are adequately protected to combat the financial impact that Prostate cancer and other illnesses impose.  This financial stress can be removed through implementing appropriate levels of insurance, an area JBS Financial Strategists can assist with.

For more information regarding men’s health issues click here.

 


Create | Protect | Enjoy – The Spring Carnival Highlights Australia’s Risky Nature

Approximately $800 million+ was wagered on Melbourne Cup Day.  It is part human nature to trust in luck or a big windfall such as winning the ‘big one’ at the Melbourne Cup or the lottery, and for most people it’s just good fun.  But statistically we know this is highly unlikely to happen.  We also know that a high proportion of people will suffer a significant health event throughout their working life resulting in their income stopping.

There is a greater chance of suffering a heart attack than winning the Melbourne Cup trifecta.  In fact, the confronting news is if you buy a tattslotto ticket the day before the draw, studies show you have a greater chance of dying before the lottery is drawn than winning it.

The challenge is to make sure we take the ‘gamble’ out of things that really matter, like protecting our family in the event we become sick / injured and are unable to work to ensure we can continue to pay the mortgage and living expenses.

What are the Odds?

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A lack of financial preparedness can have significant impacts down the track.  No one wants to find themselves in a situation where they can no longer support themselves financially.  It is about making your own luck rather than simply hoping for the best.

If you wish to discuss your risk protection options further, please contact one of the advisers at JBS.

 


Young, Free & Unprotected

When we’re young and free with the world at our feet, we think that we’re pretty indestructible (I remember that time). Life’s all about fun! Travel, drinking, friends… who wants to think about grown up things like insurance? While we might not want to think about it, it doesn’t stop that fact that we all need it.

Let me throw some figures at you… According to the place with all the info (The Australian Bureau of Statistics), they say that:
– In 2009, 15% of people in ‘prime working age’ are disabled.
– There are 275 new cases of diabetes in Australia every day, while two million of us are at risk.
– One in five Australians will experience a mental health problem in their lives.

And the Australian Institute of Health and Welfare put out a report that said:
– Males were 2.2 times more likely than females to be seriously injured as a result of a land transport accident, while just over 50% of those seriously injured were aged less than 30 years.
– For those seriously injured due to traffic (on-road) accidents, 28.2% were judged to be suffering from injuries which were considered to be high threat to life.

Of AMP’s 2010 claim, youngest to claim on Total & Permanent Disablement was just 18 years old, Terminal Illness was 24 years old, and Income Protection was 19 years old.

But what does that mean for you as a young nipper? Well, those figures don’t discriminate against age. We like to think that these figures are for the 15% of the older population or the two million people other than me.

But the reality is that it has to happen to someone, so it might be you. While we can take measures to reduce the risk, we can’t eliminate them and so we should look at ways of ensuring that other aspects of our lives are not negatively affected by it. Personal insurance gives you that freedom to know that if something did happen, you wouldn’t have to worry about the money needed to pay for rehab or maybe the cost of the experimental treatment, renovations to your home or even just having your partner or your parents stop work to be by your side in your recovery.

If we look at the statistics, you’re more likely to have a major medical injury or illness than win tattslotto but I bet you’ve bought a ticket or two in your life. If you think you’re in with a chance to win the big bucks, then you’re in with more of a chance to have something go really wrong with your health. So, why wouldn’t you take out insurance?

Also, taking out insurance while you’re young can save you thousands in the long run. While you’re young, you’re relatively healthy and therefore taking out insurance is cheaper. You are more likely to get standard rates, which means that you are no more of a risk of claiming than anyone else your age, unlike when you’re older, rounder and doing less exercise. If you can get standard rates at a young age, you can take out level premiums. This means that you can spread the risk of claiming over the life of the policy rather than just year by year and save a heap in the long run!

So take time out from all the stuff young people do these days and do a grown up thing for just a minute or two! Once it’s in place, you don’t have to think about it again (we’ll review it for you to make sure that it stays relevant) and you can go back to your Contiki tours, absinthe and ipads. Oh and it covers for anywhere in the world.

To read more, click here.