We’ve all seen the television ads where an insurance company tells you “you can be covered for as little as $1 per day”. Sounds too good to be true? Well it probably is. We’ve heard many stories from our clients who have experienced just some of the problems below. These included:
- Premiums start off cheap, and become very expensive with age (generally the older your are the more likely you are to claim);
- Definitions can be convoluted and very hard to meet when it comes to claim time;
- They are often “accident only” meaning that you are not covered for any illness or injury that is not associated with an accident (i.e. you would not be covered for Cancer, Heart Attack, Stroke and many other illnesses and diseases).
- Pre-existing illnesses and injuries are automatically excluded – but you’re often not told this until it comes to claim time and you are unsuccessful.
- You are often underwritten upon claim (not upon application like most of the insurance companies we use), reducing your chances of successful claim;
- The Income Protection often only runs for a 2 or 5 year period rather than until age 65;
We would also warn you about funeral plans. You may already be covered (and paying for this) through your life insurance as many policies pay an amount in advance to cover funeral costs. This is usually $10,000 to $15,000 that is paid to a nominated bank account within 1-2 business days of death. Therefore we’d recommend you check your individual polices for this feature.
Kim Jay CA – Director