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#1 drom

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Posted 30 August 2012 - 01:54 PM

So today I'm home sick from work and I'm really surprised just how many adds there are on TV for insurance! According to some adds I should have:

Health insurance
Income protection insurance
Life insurance
Funeral insurance

Seriously, there are so many nowadays it gets really confusing as to what we really need?

Hubby and I have health insurance should we need medical assistance. Superannuation should either one of us die. But, its the inbetween that I really feel we haven't got covered...

I'd like to know that should either one of us get injured to the point where we could no longer work, or even worse require ongoing round the clock care that we would be financially covered for all medical costs required for the ongoing care - along with the other financial commitments we also have - mortgage etc....

To be honest, I'm really confused as to what we need, what is covered with what we have and whether I/we should get Life Insurance and if this would cover that type of scenario? Along with getting Funeral Insurance to cover funeral costs which after loosing my mum demonstrated to me just how expensive they are.

So what about you? What sort of insurance do you have? What do you recommend? Any other hints or tips you can provide?

#2 ~AnA~

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Posted 30 August 2012 - 02:02 PM

Drom, we have income protection and life insurance. We got it when we bought our second home just in case. DH also has cover for if he weren't able to work anymore due to a disability or accident.

You'd need to check your super as it's often not as comprehensive as we think it is.

If you are going to get this type of insurance, I'd go with one that does a full medical questionnaire (and potentially a medical), as in the long run it would be cheaper then those ads in tv that don't ask anything except for if you smoke - those premiums tend to be much higher.

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#3 Thelma

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Posted 30 August 2012 - 02:13 PM

this is something we debate over every now and then. My DH works in a fairly high risk kind of field (building), so plenty to worry about with him injuring himself. He is also self employed, so we wouldn't have workcover insurance to fall back on. We don't have it at the moment and I do worry a bit. We'd be able to get by if something short term happened, and if it was something longer term then we figure we'd have government financial support to fall back on while we re-sorted our lives out. I'd prefer to get income insurance, but I think it's just one of those things that always get put on the backburner. The same with doing our wills.

#4 drom

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Posted 30 August 2012 - 02:20 PM

QUOTE(AnA927 @ Aug 30 2012, 02:02 PM) View Post

Drom, we have income protection and life insurance. We got it when we bought our second home just in case. DH also has cover for if he weren't able to work anymore due to a disability or accident.

You'd need to check your super as it's often not as comprehensive as we think it is.

If you are going to get this type of insurance, I'd go with one that does a full medical questionnaire (and potentially a medical), as in the long run it would be cheaper then those ads in tv that don't ask anything except for if you smoke - those premiums tend to be much higher.


Thanks Ana!

I totally agree - I think my Super has some sort of Death and Disablement clause but I honestly have no idea how that applies? It's also my understanding if hubby or I get injured at work then Work Cover kicks in to pay for all medical services - but if that is the case is that indefinately? Say if we were permanently injured and could never work again? Or is that where Income Protection type insurance would kick in??? Aggghhh if you can't already tell I'm clueless and keep putting it in the too hard basket! tongue.gif

Forgot to add...

Can someone explain to me the types of scenarios that Income Protection provides for? Is it only if you get injured at work? Or is it if you loose your job (eg Retrenched or Sacked)?

#5 Thelma

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Posted 30 August 2012 - 02:29 PM

QUOTE(drom @ Aug 30 2012, 02:20 PM) View Post

It's also my understanding if hubby or I get injured at work then Work Cover kicks in to pay for all medical services - but if that is the case is that indefinately? Say if we were permanently injured and could never work again? Or is that where Income Protection type insurance would kick in???


I don't know all the ins and outs of workcover, but I think if it's something permanent then they will do some kind of payout.

#6 ~AnA~

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Posted 30 August 2012 - 02:45 PM

The injury part is if the injury doesn't happen at work. It also covers illness.

Income protection is for if we lose our job. I can't remember if it covers voluntary redundancy though (I should look that up huh?). Also if we cannot continue working for some reason.

I really need to look up our policies!!!

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#7 drom

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Posted 30 August 2012 - 04:07 PM

Thanks girls,

I think I really need to suss this out a lot more and get my act together. smile.gif

#8 aChocLover

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Posted 30 August 2012 - 05:12 PM

We have:

Health insurance (Hosp + extras)
Super (D&D, Income Protection (75%))
Life Insurance (currently DH only)
Trauma Insurance (payout on diagnosis of serious medical illness)

We went to a financial advisor recently and they recommended/rated trauma insurance as more of a priority over other insurances. A lot of it obviously depends on the level of income protection you have. Our Inc Prot is built into our super and we could use it if either of us got seriously sick and didn't have sufficient sick/rec leave with our employer. We use Trauma insurance to top up that (so if one of us got cancer, heart attack etc, we could draw down a lump sum to cover expenses).

I don't have funeral insurance. At this point in time, if I were to pass away tomorrow, I know my family has sufficient $ to cover my funeral until my estate was paid out.

#9 CookiesandCream

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Posted 30 August 2012 - 05:53 PM

We both have Life Insurance / TPD (Total Permanent Disablement) through our super and DH also has income protection through his (I'm a SAHM so my income protection has lasped whilst I have not been working).

I do need to fix DH's Life Insurance (mine is triple of his and whilst his is decent it's not enough to cover the whole mortgage, I have mine set up so there is enough to pay out the mortgage and then a significant amount so he could stay home and focus on the kids for a few years if need be). I also need to look into his income protection as I think most super based income protection only pays out for 2 years total so I need to organise more income protection through another company that will have a 2 year waiting period and than pay out for life (well until retirement age).

In regards to Workcover vs Income Protection.

Workcover (based on NSW info) is only related to workplace accidents, it used to also cover accidents to and from work however I think this has changed since I finished up work. Workcover NSW used to have a clause (and may still do but I haven't kept up with changes since I had DS) that if you had an accident and were off work for one full day or more than the payment would revert to your award wage. So if you were injured and off work for months you would only be getting paid your award wage for that period (not sure how it would work for contracts etc that don't have an award, I dealt with tradies for the most part so there was always an award wage). In order to receive your full wage through workcover you would need to enter into a suitable working arrangment with your employer that would see you come in to work for as little as 5 mins per day to the whole day and perform suitable duties (as agreed to by a GP) that won't have any further affect on the injury received.

Income Protection is to protect you from out of work illness and accident (not maternity leave, resigning and I'm pretty sure not redundancy). I think most companies pay up to 75% of your average wage. Things to look out for are waiting periods, to have a 30 day waiting period is more expensive than to have a 60 or 90 day period. How long the income protection will pay out for, as I said it is my understanding that most super based IP pay out for 2 years total, other IP's will pay out until retirement age (you can also claim IP that isn't sourced through your super at tax time). You also need to read the fine print and see if it will pay out if you are unfit to work in your current line of work OR if you are unfit to work in any line of work. So for the latter your profession may be a builder if you injure yourself and can't work as a builder anymore the IP Provider can turn around and say well medically there is nothing stopping you working as a receptionist and than refuse to pay out.

I'm unsure if you are able to use workcover and IP at the same time
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#10 drom

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Posted 30 August 2012 - 06:30 PM

QUOTE(CookiesandCream @ Aug 30 2012, 05:53 PM) View Post

We both have Life Insurance / TPD (Total Permanent Disablement) through our super and DH also has income protection through his (I'm a SAHM so my income protection has lasped whilst I have not been working).

I do need to fix DH's Life Insurance (mine is triple of his and whilst his is decent it's not enough to cover the whole mortgage, I have mine set up so there is enough to pay out the mortgage and then a significant amount so he could stay home and focus on the kids for a few years if need be). I also need to look into his income protection as I think most super based income protection only pays out for 2 years total so I need to organise more income protection through another company that will have a 2 year waiting period and than pay out for life (well until retirement age).

In regards to Workcover vs Income Protection.

Workcover (based on NSW info) is only related to workplace accidents, it used to also cover accidents to and from work however I think this has changed since I finished up work. Workcover NSW used to have a clause (and may still do but I haven't kept up with changes since I had DS) that if you had an accident and were off work for one full day or more than the payment would revert to your award wage. So if you were injured and off work for months you would only be getting paid your award wage for that period (not sure how it would work for contracts etc that don't have an award, I dealt with tradies for the most part so there was always an award wage). In order to receive your full wage through workcover you would need to enter into a suitable working arrangment with your employer that would see you come in to work for as little as 5 mins per day to the whole day and perform suitable duties (as agreed to by a GP) that won't have any further affect on the injury received.

Income Protection is to protect you from out of work illness and accident (not maternity leave, resigning and I'm pretty sure not redundancy). I think most companies pay up to 75% of your average wage. Things to look out for are waiting periods, to have a 30 day waiting period is more expensive than to have a 60 or 90 day period. How long the income protection will pay out for, as I said it is my understanding that most super based IP pay out for 2 years total, other IP's will pay out until retirement age (you can also claim IP that isn't sourced through your super at tax time). You also need to read the fine print and see if it will pay out if you are unfit to work in your current line of work OR if you are unfit to work in any line of work. So for the latter your profession may be a builder if you injure yourself and can't work as a builder anymore the IP Provider can turn around and say well medically there is nothing stopping you working as a receptionist and than refuse to pay out.

I'm unsure if you are able to use workcover and IP at the same time


Thank you!

It was my (confused) understanding that Work Cover provides cover if you are unable to work due to a work related injury.

And that Income Protection applied if you were unable to work through a non work related injury. I had read that it covered up to 75% of your salary (I think there may even be a cap for high income earners?). And that it does not cover you for loss of job through retrenchment or termination for non performance. It is just for injury that prevents you temporarily or permanently working again.

Can I ask a stupid question.... does all Super as a default include an Income Protection component? Or is it dependant on your policy?

If that was the case, then I love the idea of adding a separate Income Protection component that commences at the end of my Super IP time frame. smile.gif Good advice re the definition on unfit to work clause to. I will definately look out for that one. Along with payout for life not a defined period.

As for Life Insurance - it is basically an additional (to your Super) payout to a nominated party when you die? My biggest concern with this type of insurance is that Hubby is a Sky Diver and I'm pretty sure in a lot of insurance fine prints that they do not cover dangerous sports such as these.

I think it is all becoming a little bit clearer to me now. blush.gif

#11 SEA

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Posted 30 August 2012 - 08:48 PM

We pay out so much in insurance, but it's worth it just in case.

We have health insurance (top hospital and extras), income protection, insurance for a personal loan and life insurance. The life insurance would cover the mortgage, and the other personal loan would be paid out too. Both of our superannuation policies come with a payout on the event of either of us passing away, or becoming permanently disabled. The insurance linked to our mortgage also covers serious illness.

I can't answer of your questions, Drom, but I'm looking forward to the answers!

#12 Lemon

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Posted 30 August 2012 - 09:10 PM

I have life insurance as well as serious disability insurance through my super. I gave been meaning to get DH to check whether his super includes this, as we will take out a new policy if it doesn't.

We both have the top level of private health insurance.
I think we need to look into the cost of income protection insurance.

I have a work injury and am currently on w0rkcover. Here in Vic if you are off work due to your injury for more than 14 days then you get weekly payments, starting off at 95% of your pre injury wage (to a max of $1800 per week) for 13 weeks, then it drops to 80% of your pre injury wage, then at some point (I can't remember when) it drops to 70% until 130 weeks. In some cases it continues after 130 weeks (generally if you are still unable to go back to work by then). If you are able to go back to work on modified duties/less hours etc, then your employer pays you for the hours that you do work, then w0rkcover pays the difference between that and what 95/80/70% of your pre injury wage was. It also covers medical expenses, but they have set limits on what they will pay/reimburse for medical expenses, and usually you will have some out of pocket costs as their limits are very low. A lot of doctors won't bill w0rkcover directly because there is a lot of paperwork and they get less back, so most of the time you pay the doctors in full then send receipts in for reimbursement. I used to spend $300 per week on medical expenses and get $100 back, so we were always out of pocket $200 a week.

If you have a serious injury (basically a lifelong impairment) you can claim a lump payment in compensation, which is generally why most claims cease weekly payments after 130 weeks. However there are always going to be some injuries that continue for longer than that but aren't expected to be a lifelong impairment so they do continue in some cases. Unless you are in NSW where they just changed it so that everyone gets cut off after 2 years!

If you have income protection insurance you cannot use it if you have a work injury, you MUST use w0rkcover. (in Victoria.)

ETA: Once you are able to return to the same hours you were doing pre injury (regardless of the actual job you go to - like the example a PP mentioned of a builder not being able to do physical labour but they get an office job) the weekly payments stop, but you would still get help with the medical expenses.

#13 CookiesandCream

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Posted 30 August 2012 - 09:14 PM

QUOTE(drom @ Aug 30 2012, 06:30 PM) View Post

Can I ask a stupid question.... does all Super as a default include an Income Protection component? Or is it dependant on your policy?

As for Life Insurance - it is basically an additional (to your Super) payout to a nominated party when you die? My biggest concern with this type of insurance is that Hubby is a Sky Diver and I'm pretty sure in a lot of insurance fine prints that they do not cover dangerous sports such as these.



I'm not sure if all super includes a default amount of IP, I know my previous super provider had a default of both IP and life but I think my current one might of only offered a default amount of Life and than extra Life and IP was on top of that (It was about 5 years ago that it was set up though so I can't remember exactly as I made changes to the existing amounts).

Yup, Life Insurance is in addition so if you had $50K super and $100K life you would end up with $150K minus any fees / taxes that needed to be paid. You can choose to have a binding nominated party, it just involves filling out an extra form every three years and it ensures that who you nominate will be the person to get the money and can't be contested. If you have nominated someone without having a binding nomination than the trustee of your super fund can use their discretion to change that nomination if contested.

Not sure on the coverage of dangerous sports, I'm thinking there must surely be one or two companies who cover people who are involved in high risk activites though of course the premiums will be much higher.

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#14 *Lib**

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Posted 31 August 2012 - 10:22 AM

In regards to the funeral insurance.....RIP OFF in most cases.

You are only covered in the first 12 months for accidental death. You miss a payment and your screwed. You pay for LIFE. (Which is actually only till your 75 because after that they wont cover you.) You never see that money again, unless you die.

You are better to pay off an actual funeral as funeral insurance is just that, insurance. You are not physically paying for anything. At our place you pay off a funeral over 2 years. Its pain in full. Price never goes up. You have paid for something physical, not a just in case.
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#15 Angel_Elle

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Posted 01 September 2012 - 10:42 PM

I agree with Lib - funeral cover you are best going direct and paying it DH grandmother did this paid for her plot/crematorium spot and possible the funeral expenses so that was one less thing that needed to be paid for when she died.

We have:
Health Insurance - almost top cover mainly due to our location - anything serious we are flown out and i would then want to be transferred to a private hospital if possible.
Life insurance - only DH has it at this stage due to his past medical history - we have been discussing getting myself covered in the event something happens to me as he still needs to work but raise 3 kids and my current super benefits wouldn't go very far to help him.
Super - both of us have our main super-fund setup to include Death & TPD insurance.


At the end of the day what the best thing to do is work out what would you need $$ in the worst case scenario (death or permanent disability) for each of you (and there is a difference especially if one is the primary earner). Once you have an estimate figure than you can work backwards and ensure that your super/insurance payout will at least meet that need.
Also ensure that you have a will setup to ensure that the money goes where you want it rather than potential headaches for those left behind. Plus whilst you are getting the will done setup an Enduring Power of Attorney (Both Medical and Financial) its basicaly to state who you want to make financial or legal decisions for you in the event of you losing, at some time in the future, the capacity to make those decisions for yourself.
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