moneyGPS has reviewed the responses to the answers you provided and determined that it would be prudent for you to review your current insurance position. Why?

Unfortunately, risk is everywhere. We can’t completely eliminate risk, but we can reduce the financial impacts.

If you have any type of insurance, then you realise that the unexpected may happen.

You understand that risk (i.e., the possibility of suffering harm or loss) is a part of life and the financial impacts can be reduced by having insurance to cover you when things go wrong. That applies whether we are talking about your home, health, car ... or more importantly for you!

It can also provide security to anyone who is your dependent, i.e., a person who depends on another person for support or assistance, particularly financial support. Losing the ability to earn an income is a huge risk that many people don’t consider. But being aware of this risk and minimizing it with insurance can give us peace of mind and a better night’s sleep.

Let’s review a very common example of what happens when you have the right type and amount of cover (you can afford) in place.

Angela is a 35-year-old single mother of two children. Two years ago, she was diagnosed with a serious type of cancer and told by her doctor that she would likely recover, but only after several years of treatment and rest. This meant that Angela would not have an income for at least two years. When Angela first started her family eight years ago, she looked at her insurance needs and decided on a life insurance policy, coupled with a TPD policy through her super fund so that she wouldn’t have to come up with the premiums each month.

As Angela was staying home with the kids till they went to school, her adviser discussed the option of taking out trauma insurance. Although it was quite expensive, Angela had done her research and knew that it was the most claimed upon personal insurance. Angela decided that the financial security of her family was her main concern and took out the trauma insurance.

Summary: When Angela was diagnosed with cancer:

• Life insurance would not pay out because she was expected to make a full recovery
• TPD insurance would not pay out because she was expected to return to work at some point
• It was her trauma insurance policy that provided a lump sum payment that she could use for medical costs, loss of income, and looking after her family

We all know that buying any form of personal insurance seems like a ‘Grudge Purchase’!

However, have you ever considered the impacts of NOT having any or enough personal insurance? Well, let’s consider some of those impacts if you don’t!

The impacts of NOT having any or enough personal insurance include:

• Dependants not being cared for properly
• Having to rely on family
• Having to pay for rehabilitation expenses or medical expenses
• Having to pay for funeral expenses
• Having to sell the family home due to mortgage stress
• The stress of having to go back to work while either still in rehabilitation, or still grieving, having to rely on government welfare payments which can be as low as a quarter of the average wage

We can list all the stats - which don’t lie, but just to make the point:
21% of all Australians stop work before the normal retirement age, due to ill health. Source – ABS Stas 2018-2019.