By Matthew Bennett, BCom (Lib Stds) (Hons), Dip FS (FP)
Financial Planner

No one likes to think about their death or becoming permanently disabled, but the consequences of not considering these unfortunate events could make this tragic event even more devastating for you and your family. 

Did you know that...

• More than 3 out of 4 people will suffer serious illness sometime in their working life.
• 1 in 5 working aged parents will die, become seriously ill or injured.
• One third of women and one quarter of men will suffer from cancer in their lifetime.

Insurance is a concept that we are all familiar with. We don’t hesitate to insure our cars, homes and home contents, but when it comes to insuring the two most important aspects of our lives – our health and our ability to provide income for our families - Australians have a lot to answer for. It seems to be one of those topics that we will “get to later” and only ever get around to actually doing when something drastic happens. Unfortunately, this is often when the damage has already been done.

There is a compelling argument for taking out a comprehensive insurance portfolio at a young age – the younger the better. Below are listed some of the top benefits.

1. Avoiding Personal/Family History exclusions.

- The younger you are when you take out your policy the less likely it is that you have been diagnosed or have developed a condition that will potentially lead to a loading (extra cost) being placed on your premium.

- Not only do personal illnesses affect your premium, but also your families medical history can result in additional loadings. 

2. Maximise your opportunity to Claim

- By having your insurance policy in place longer you increase your opportunity to make a claim.

- There is nothing worse than the occurrence of a tragic event. This is only compounded when financial stress is added to the grieving process. The comfort and peace of mind that insurance offers can ease the financial burden and help you focus on your family.

3. Less Medical Testing

- As you get older insurance companies require you to undergo certain medical tests when taking out cover. This is usually not the case for healthy young adults. 

- By continuing your cover as you get older you avoid having to undergo these tests that may uncover reasons for the insurance company to exclude/load your premium and are a large source of inconvenience.

4. Lower Premiums

- Insurance premiums are less expensive than you might expect – especially for people aged in their 20’s and 30’s.

- A 20 year old non smoking male in a sales role can provide themself with $500,000 of life, total and permanent disability and trauma cover as well as income protection insurance (based on a salary to provide a monthly benefit of $3,125 until the age of 65 for around $1,500 a year.

5. Value for Money

- By taking a ‘level’ premium, your premium remains relatively flat over the life of the policy. Getting in at a young age gives you access to cheaper premiums

- A package of $1,500 on a wage of $50,000 represents only 3%. In other words, you are accepting 97% of your salary so that in the event that you are unable to work for the rest of your life you will continue to receive a substantial income and a lump sum of $500,000.

While everyone should consider and purchase insurance, we need to overcome the stigma that it is only for old or sick people. By covering yourself early you avoid the possibility of not having insurance when you need to make a claim, having to pay higher premiums because of medical conditions that have developed over your lifetime and having certain conditions excluded from your cover.

You never find stories of people who have had insurance cover, made a claim and regret having had that insurance. On the other hand, there are plenty of stories of people who wished they had listened and taken out insurance before tragedy struck. Sacrificing just a small percentage of your income to be protected from disaster – it hardly seems like hard decision.

Ready to make that decision? Call us now on 1300 726 848 to make a free, no obligation appointment with one of our financial planners to discuss your specific situation.

This article contains general advice only. It should not be construed as personal advice as it does not take into account your individual circumstances, goals and objectives. You should carefully read the PDS of any insurance product before taking out a policy.