Too often in Australia personal tragedy is made even harder by the simple admission: “ I have no insurance.”
Whether we’re talking about insurance to cover the loss of our homes, belongings, cars or more valuable assets such as ourselves, our family and our ability to earn an income, Australia has an ongoing under-insurance problem.
Reasons for not buying insurance are obvious: cost, a perceived lack of benefit for money invested, and more pressing demands on the budget. Not to mention the old “wing it and worry about the worst if it comes” approach. Or “it won’t happen to me”.
When faced with these circumstances, people firstly use their savings, then their borrowings, then they rely on family and friends, and lastly they sell their assets and look for charity. Most people when faced with these situations find themselves with inadequate or no insurance.
When Lisa Backhouse, a full-time working wife and mother of two young school-aged children with a mortgage, was diagnosed with cancer a new reality began. She would need surgery, chemotherapy and radiotherapy; an aggressive and punishing regime that would take the best part of a year.
“We quickly realised that, as a family, we were grossly ill prepared for such a life altering event. The night of my diagnosis, I recall wondering aloud to my husband, how we were ever going to cope”.
Trauma Insurance would have assisted Lisa and her family in their time of need, however because Lisa’s husband was the primary breadwinner, the attention was focused on him. They did not realise Lisa’s value as the primary caregiver in the family and the secondary wage earner.
Keith Livingstone was a 49 year old Chiropractor who is married to Joanne and has five young children. Keith had a healthy lifestyle and diet and in his own words, “I was a very proud, healthy trout who thought he was bomb-proof and would live to 100 in good shape”. Unfortunately Keith collapsed at work one day and it was discovered that he had a brain tumour. He has not worked a day since. Unfortunately for Keith he only had a small income protection policy and some life insurance. As Keith has said, “ Critical Illness or Trauma cover would have paid out a lump sum following my diagnosis and that would’ ve helped us enormously as we mop up the mess and sell off property”.
These life threatening events do happen. It is simply a matter of to whom, and when. According to Dr Marius Barnard, the “father” of trauma insurance, you have an 80 per cent chance of suffering a heart attack, a stroke or cancer. You also have a high chance of surviving such an event, due to improvements in medical science.
The amount of insurance cover you may need will vary according to circumstances but an amount that would cover all your debts would be a good starting point. Then you would need to add enough to provide enough income so that you did not need to work until you had fully recovered, plus a bit more if you think a lifestyle change may be in order.
People need comprehensive personal insurance cover – your financial future is totally dependent on your ability to continue working and investing!
Any advice provided in this publication should be considered General Advice as it does not take into account your personal needs and objectives or your financial circumstances. You should therefore consider these matters yourself before deciding whether the advice is appropriate for you and whether you should act upon it.