Insurance – has it really got you covered?

22 Jan 2014

By Shadforth Financial Group

The direct insurance industry – it all seems so simple doesn't it. You pick up the phone, provide a few basic details, no medicals are needed and voila, you have life insurance. It seems nothing could be easier.

But wait, there's always a catch. For example:

  • did you know there are no funeral benefits on life policies so you would need a separate policy to cover this
  • these same policies only run to age 80, whereas traditional life insurance policies now run to age 99
  • and, perhaps the scariest thing of all, is that your insurance policy is underwritten at the time a claim is made.

So what does that mean for you and your loved ones? 

Essentially, when you pass away, your family will be required to complete a claim form authorising Medicare and your private health fund provider to supply your entire medical history. If you have ever had an illness that was similar to the one that caused your death, your family may not receive anything under the policy.

If you have serious illness cover through a direct insurance provider, the Product Disclosure Statement is likely to say something along the lines of "we will need confirmation of diagnosis by a relevant medical practitioner - not necessarily your own doctor, including the results of any tests which can then be checked against your entire medical history. If you have had an illness at any time in your past that directly, or indirectly, relates to the illness you are claiming for, you may not receive any benefits under your policy.

When it comes to direct income protection, your claim will be assessed against the occupation you were in immediately prior to making a claim. Have you considered what happens if you were unemployed at the time? Again you may find yourself in a situation where you are not entitled to anything under your direct insurance policy. 

So what should you do? 

Well that's easy. Find a professional insurance adviser.

Insurance companies offer a broad range products and a specialist insurance adviser can select the most appropriate policy for you – one that includes a funeral benefit, terminal illness benefit, a financial planning benefit, the most up to date medical definitions and much more.

Your insurance adviser will also be able to calculate how much insurance you really need – taking the guess work out of the equation.

Most importantly, all underwriting is done up front so you will know exactly what you are and aren't covered for. Yes there will be more questions for you to answer upfront, and you may even need to undergo a medical examination which is usually paid for by the insurer. However, should a claim need to be submitted, you or your loved ones together with your personal adviser, will complete the claim form and your past medical history will remain exactly that - past history.

So come on, what are you waiting for, why not take the guess work out of what you're covered for and call an insurance specialist today.

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