Life, Disability, Income Insurance etc

Which Insurances Do You Carry?

  • Life Insurance

    Votes: 8 10.1%
  • Trauma/Disability Insurance

    Votes: 0 0.0%
  • Income Protection

    Votes: 4 5.1%
  • I'm insured for 2 of them

    Votes: 19 24.1%
  • I'm covered for the whole lot

    Votes: 27 34.2%
  • Nope. My money is better spent elsewhere

    Votes: 21 26.6%

  • Total voters
    79
  • Poll closed .
self employed

Yep, got everything and it costs.

We don't pay wages so are exempt from workcover, so the Trauma/Injury insurance covers what workcover would cost. The life insurance is enough to pay off most of the mortgage debt, can sell a bit if required if this happens. Income protection is set to kick in after 3mths which reduces premiums alot but it's there for longterm issues.

And PI insurance but that's only 1% of income so pretty good really.
 
Does it mean we need to do a new ‘underwriting’ each time we review? Isn’t, generally, our health is going to get worse over time which would increase the premium?

There's plenty of ways around this. Chances are that as you get older your outgoings will decrease (kids eventually take care of themselves) so the insurance needs will decrease. It's fairly easy to reduce an existing policy.


Life insurance: I agree. I think the super is enough as generally this can pay the home mortgage so that the family can atleast have a home.

Income: I think I have more expense if I don’t go to work! Mainly fuel, phone charges and utility bills!

Trauma: I disagree here. Money should be the least concern if we are unlucky to claim this. Trauma is going to cost the family lot more the death.

You'd be amazed at how many people don't have sufficient super to cover their PPOR debt. In my experience it's almost everyone below the age of 45. This doesn't leave much to raise and educate the kids most of these people have.

Income Protection is deliberately set at 75% in most cases to cover essential costs of living, but to also encourage you to recover and return to work.

Trauma/TPD is acutally the most likely which people claim on, hence it tends to be the most costly. 1 in 3 people get some sort of cancer at some point in their lives. This insurance gives you funds to take time off work to recover and to have funds to seek the best treatment. It can be reduced (but shouldn't be elimitated) if you've got adiquate IP insurance.


I noticed that there is a bit of change when you hit 90 days… but nothing significant after that say 6 months or slightly more.

A great reason to have at least 3 months salary stashed away for emergencies!

LEVEL Vs STEPPED:
1. I don’t like paying now for something which we may use 20 years later
2. Is it a waste of money (spending more now) if I die early?
3. Taking only the nominal values I think it takes about 6 years for step and level to meet. If we take the real values it would be lot longer. Does anyone have proper for level Vs step premiums comparison with indexation?
4. If I’m planning to reduce my working ours by 55 then is having ‘level’ really worth it? I get the feeling that it may be worth it if we are going to work till 65.
5. What if the insurance company disappears? Can we transfer to another company?

1. if you knew you would only need it in 20 years you wouldn't take any insurance today.
2. fortuantely you're more likely to die later in your lifetime :D. The real answer is are you looking for a short term plan here or are you managing your risk for the long term.
3. Takes about 6-7 years for them to cross. Break even point is about 12-14 years. Is this a short term or long term plan?
4. If you're intending to stop work at 55, then plan for your insurance to deliver you safely to that point. What will happen to your plan to retire by 55 if you get sick and can't work for 2 years?
5. Insurance companies sub-insure behind the scenes. It's possible for a single company to go broke, but very unlikely for the whole system to collapse and render your policy completely defiunct. If you're worried about this, consider that the whole banking and superannuation industries would be taken down with it, which means the entire financial system. In this case the guy with the most guns & ammo will be the one who gets ahead.
 
Just to add a different perspective to this conversation, I used to work for an insurance company.

Say you went and got insurance from ABC Insurance, outside of your super.

Your industry super fund typically simply pass on the insurance to an insurance company - which could be ABC Insurance.

So, you'd end up with 2 policies - 1 as you personally and 1 as a member of your super fund.

The difference is that the policy under your super usually has more stricter conditions that you can claim under. Generally it is so strict that it is useless.

So, even if you have insurance with your super fund, it is worth looking at the fine print (PDS definitions) to see what it really covers and how it differs from a personal one outside super.

Just a different take on the discussion and happy to be corrected.

We don't have any insurance - but are considering life and TPD under our personal names (we get 30% discount where we work).
 
Fifth, it you take insurance now, with a level premium, you'll find it's much cheaper over the course of your life. Insurance tends to get very expensive as you get older. A level premium will lock in the cost whilst you're young and it's still cheap.

I've considered that aspect and decided that saving and investing the money I would have spent on insurance will prove more fruitful in the long-term. I'll feel awfully silly (and sore) if I'm hit by a car tomorrow.
 
Can you please tell me which option gave them the lowest profit or the least favourite? :)
1. Wating period (income insurance). Is it 3, 6 9..etc months
2. Step Vs level

Generally, 3 month waiting period is the most popular - things like work cover (if applicable) cover you anyway, so insurance companies aren't out of pocket at that stage.

Step vs level doesn't make much difference to the insurer. More to the agent (their commission is based on premium, typically 100% in first year and then between 10-12% for the life of your policy).

Also, insurance companies don't make any money on the policy for at least 5 years. During that period most of the premium is used to pay commissions and operating costs.

Some insurance companies (like the one I work for) offer a 'hybrid' premium which starts off as stepped, but converts to level at the age where you are better off with level than stepped - worth considering.

Cheers,
Srini
 
Hi Redcat, you forgot one other type of insurance - mortgage insurance. Not the lenders one but the one that pays off your mortgage for you if you become injured or whatever and can't work. I have that on my two most expensive loans and as I added it to the loan it is tax deductable. I also have a private trauma and TPD policy plus income protection through my super.

I'm probably overinsured but I reckon the day I drop an insurance is the day some drunk driver will mow me down or I'll have a car accident :eek:
 
...also...look at the policy commencing after 90 days and if you are say over 55...look at a 5 year policy. This also makes it cheaper.

As for life insurance...it should cost less than 500per year for say 250k worth of cover.

With all respect sash, you should not be making these sorts of statements. Insurance is not a 'one size fits all' product. There are many many variables that go into determining the premium for insurance products.
 
I'm probably overinsured but I reckon the day I drop an insurance is the day some drunk driver will mow me down or I'll have a car accident :eek:

Hahahaha, Murphy's Law! When I speak to people about insurance and they whinge about premiums and whatnot, I usually say to them 'Everyone always curses under their breath about paying their premiums, but when something happens, the first thing they think is 'thank goodness I'm insured!''
 
With all respect sash, you should not be making these sorts of statements. Insurance is not a 'one size fits all' product. There are many many variables that go into determining the premium for insurance products.

That is right. There's an entire profession (actuaries) who spend all day pricing insurance policies. If it was so simple all those people would be fired.
 
Fifth, it you take insurance now, with a level premium, you'll find it's much cheaper over the course of your life. Insurance tends to get very expensive as you get older. A level premium will lock in the cost whilst you're young and it's still cheap.

My life insurance didn't come with level or stepped choices (Allianz) :confused:
 
Who do you see for advice? I was going to get insurance (I think income protection though I don't fully remember) with my super but when I enquired about it, they said I would need to do some complex assessment because I have previously had back surgery. I didn't follow it up then but I think we will need to look into it once we get an IP.
 
IIRC generally a financial advisor specialising in Insurance would be your best bet.

I'm sure someone will be along shortly to come up with a better idea.. :)
 
Who do you see for advice? I was going to get insurance (I think income protection though I don't fully remember) with my super but when I enquired about it, they said I would need to do some complex assessment because I have previously had back surgery. I didn't follow it up then but I think we will need to look into it once we get an IP.

As I mentioned, we have a specalist in the office who deals in this sort of thing.

Generally speaking income protection via super is very limited in its scope, but other insurances (such as life) can work very well through super. Your back surgery would likely mean there's some restrictions on what you would be able to claim on, you may be eliminated from spinal related claims. This doesn't mean that you're elimiated, just that there'd probably be some exclusions.
 
I'm in the process of moving income protection from super to outside and increase the death insurance in super.
While I'm doing this I thought I will look at the Trauma as well. However it looks like they are not going to cover my knee (becasue I had knee pain after playing too much tennis) and not cover wife for breast cancer related stuff simply becasue her mother had it! What is the point in getting a Trauma cover if those are not covered?!?
 
I'm in the process of moving income protection from super to outside and increase the death insurance in super.
While I'm doing this I thought I will look at the Trauma as well. However it looks like they are not going to cover my knee (becasue I had knee pain after playing too much tennis) and not cover wife for breast cancer related stuff simply becasue her mother had it! What is the point in getting a Trauma cover if those are not covered?!?

PLenty of other ways to suffer trauma!
you are fortunate. My insurer refused to give me any income protection insurance because I had previously had tennis elbow... they wouldnt just refuse to cover the elbow.
 
A quick post.

Like many I have cheap old held cover but thinking of dumping but scared to do so. What to do...

Early in our marriage we got full cover cheaply.

Now I have level insurance so I think I pay $4k to $5k for life and trauma and income. Income of $75k for life.

However.... 20 years or so later, we own out PPOR, have multiple IPS, have share , cash and wife inherited shares and another home. If I die she will get Super and vice-versa but there are no debts to pay

Plus we have a business that earns income without our direct involvement although we do manage it and have to bill client and admin ,etc..

So I and seriously thinking of flicking it... keep the cheap super death cover but again, not needed to pay PPOR.

Lastly, I don't trust them. I expect they will say but your income on the books is X not Y and I will l say that is wages not total earned income and dividends. I say this because:

My wife did claim and surprise surprise they refused becasue when we signed up she (stupidly) said on signing up I get a sore neck now and then, I use chiropractic (who does not). They said OK if degenerative, no cover but anything else, of course.:D

Then 12 year later she was hit from behind in car accident and they said, NO, No, No it was not the massive accident that wrecked the car and put your out of work for 9 months but the degenerative neck and lets ignore the back and lower back as well and NO cover but here is your premiums back and we admit nothing. She took it ( stupidly again) being naive at the time. It is the one thing we agreed to disagree on.:mad:

So that's our story. I think I should dump it and run with Super cover and eat better and exercise more. Agree?

Peter 14.7
 
If you dump the coverage, maybe still put those payments in something else?

Pre-investing days, when we paid off our mortgage, we continued putting the mortgage payments into a savings account.

I don't trust insurance companies either, except for life insurance. They can't dispute you are dead, and after the 2 year waiting period, they can't even deny suicide.
 
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