When it comes to insurance, it can sometimes be hard to see what you’re really paying for. It’s one of those costs that is easy to cut from the budget when times get tough, but before you make a decision to cancel your cover, take a moment to think of what the true cost impact could be to you and your loved ones.
Recently, one of our long term clients saw first-hand the value of their insurance. For many years Mr X had been paying premiums to hold an Income Protection policy, and was now considering cancelling the policy. Mr X was in receipt of a disability support pension with Centrelink as he was unable to work, and we advised that he might consider placing an Income Protection claim. We lodged the claim and facilitated the process on behalf of Mr X, and this resulted in a monthly benefit being paid to him of more than twice what he was currently receiving from Centrelink. In addition, the insurer also paid Mr X a back payment in the vicinity of $30,000 from the date the disablement occurred. Not a bad payoff, and this has certainly helped ease the financial burden for Mr X.
Life Insurance exists to cover the ‘what-ifs’ in life. Before you make a decision to cancel your cover, have a chat to someone. Think about what life might look like in the worst case scenario. See what options you have to reduce your insurance costs, without removing the cover all together. Then come to a decision that you can live with, and afford at the same time.
Teneale Laister AFP BCom(Fin,FinPlan,Mgt) ADFS(FP), is a representative of Alman Partners Pty Ltd, Australian Financial Services Licence No: 222107.
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