If you are like most Australians, insurance is one of those things which can be put off for another day. But another day might be one too late – the story of John outlines how important it is to have the right insurance.
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John was a fit and healthy single 53 year old who had just started his own bookkeeping business. One weekend he was hosting a Christmas in July party where everyone was enjoying themselves. Later in the evening he started bumping into things and slurring his speech. Thinking he had drunk too much, his friends put him to bed. The next morning when he couldn’t get up he called an ambulance.
It turned out John had a stroke which was caused by bowel cancer. After fighting for his life for the first couple of days, he started on the slow path to recovery which included chemotherapy, physiotherapy, speech therapy and psychotherapy. He had multiple surgeries to remove the cancer and had limited use of his left side.
During this already stressful time of dealing with health issues, John started having money problems. Because he had just started up his business, he had limited savings. While he was in hospital there was no one to work in the business so he had no income coming in.
John did have trauma insurance, but he was not very good at maintaining the payments, so there was a question as to whether he was eligible for disability payments. While his friends and family were trying to sort out his financial mess, the rent on John’s house became overdue. With no alternative, they had to move his possessions into storage. They also had to close down his business.
Luckily John did have income protection insurance through his superannuation. He had opted for the 90 day waiting period which meant that although he didn’t get immediate help with his rent and bills, he was able to get a regular monthly income before he came out of rehabilitation hospital.
WHAT DID JOHN LEARN?
The good news is that two years on, John is back working as an office manager for a small business. He is now cancer free and even with slight disabilities, he has a new lease on life.
Unfortunately, hindsight is always 20/20, and looking back John wishes that he had put better insurance in place. As he couldn’t get sick pay from a regular full time job, he should have had insurance which could have filled the financial gap, which meant he could have kept renting his house.
COULD YOU FACE A GAP?
Most people don’t understand the need for the right insurance until a friend or family goes through a serious illness or death, when the reality of not having a safety net hits home. What will you or your family do if you can’t earn a living? Would you have enough money to cover the mortgage or the rent?
|What if something happens?||Which insurance will help?||How will it help?|
|You become unwell or injured and can’t work||Income protection Insurance||Helps to cover your income by replacing your lost earnings.|
|You suffer one of a number of specified medical conditions||Trauma Insurance||Provides a lump sum to help deal with medical and rehabilitation costs|
|You pass away||Life Insurance||Provides a lump sum payment to your family which will help them deal with their financial situation|
|You become permanently disabled||Total and Permanent Disability Insurance||Pays you a lump sum as you are unable to work any more|
|You become totally or partially disabled and you have your own business||Total and Permanent Disability Insurance||Pays you a lump sum as you are unable to work any more|
Can you Recognise the Signs of a Stroke?
One of the things which would have helped to speed John’s recovery was if his friends had spotted the signs of a stroke. If you think someone is having a stroke, use the FAST test which involves asking the following simple questions:
For more information visit the National Stroke Foundation’s website.
TALK WITH YOUR ADVISER ABOUT HOW TO PLAN FOR THE FUTURE IF THE WORST DOES OCCUR.
PREPARE FOR LIFE | ISSUE 17 |2015
The information provided in this page is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs. You should seek independent advice from your financial adviser before making any decisions.
AUSTRALIAN MORTGAGE AND FINANCIAL ADVISERS (AMAFA)
Phone: 07 3378 2056
Fax: 07 3378 2069