A Classic Case of Murphy’s Law with Trauma Insurance
July 26, 2022

What is salary sacrifice into Super and how does it benefit you?

A Lucky Save with Trauma Insurance

Imogen* had only just decided to cancel her Trauma Insurance policy by suspending her premium payments when she received the shocking diagnosis. Cancer. She had already missed her last premium instalment.

As is the case when many people hit their sixties, Imogen was starting to think ahead and was keen to invest more of her money into savings and less on everyday expenses. She’d been working as an accounts clerk in the business she owned with her husband for nearly three decades. And though retirement wasn’t yet on the horizon, they were keen to make their money last the distance.

When the premiums were hiked on her Trauma Insurance, she decided not to continue payments. And in discontinuing her payments, she was letting her policy lapse.

It’s an oft-told tale. The sixties are the most common period for policy lapses. At Wealth Smart, we see it happen all the time. It’s understandable. Policy premiums do increase the older you get, since you’re more likely to need to make a claim.

But that’s just the point. The reason the premiums are higher is because you’re more likely to end up needing the benefits of insurance cover. The sixties are when many people start to make claims on their insurance policies. It’s only natural, since you’re not as fit as you once were, and as your body ages your chance of contracting a serious illness multiplies.

Before diagnosis, Imogen was receiving a mid-level income of some $55,000 that subsidised her husband’s earnings. But once she factored in the need for emergency surgery, chemotherapy and radiation treatments coupled with the loss of income as she recuperated, she realised the entire experience would prove a financial burden on the household.

She called the insurance company to reinstate her policy immediately after she’d received her diagnosis. And thankfully, all was not lost. With the insurance company Imogen had chosen, she had a specific period of time in which she could reinstate the policy by paying the outstanding premium.

Luckily for her, she received her diagnosis within that time frame and so was able to reinstate her policy at no extra cost and with minimum effort.

It was a matter of good timing for Imogen. Had that policy lapse time frame passed, she would have had to reapply for the policy, and in doing so she would have had to disclose her medical condition. Unfortunately, with her changed circumstances, it’s unlikely she would have been approved for any new cover for Trauma or Life Insurance.

Imogen is currently completing her claim. But others are not so lucky. It’s easy to think that if you’ve lived this far without needing protection, you can go without a little longer. But don’t be fooled. It’s Murphy’s Law! As soon as you let a policy lapse or cancel it, you’ll end up needing to claim! Don’t forget: insurance is protection against the unexpected. Don’t be left unprepared. If you’re thinking about applying for Trauma Insurance – or any other insurance – get a quote with us today.

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