Get covered for life

Get covered for life
Why you need life insurance
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Suncorp
Life can be full of surprises – unfortunately not all of them pleasant. Knowing how
to protect yourself and your loved ones in the case of uncertainty can be difficult.
We know it’s important to protect your home and car. And most of us do. But it’s
also important to protect your life, your ability to earn an income, your health and
your business interests. Because while we don’t like to think about it, the reality is
traumatic and tragic events don’t only happen to other people, they can happen to us.
Working with a financial adviser can give you a better understanding of life insurance
and how much you need to keep you and your family’s lifestyle, dreams and future
financially secure.
To help you get started, we’ve put together a simple guide to explain the different
types of life insurance. We also share some real life stories to show how having the
right cover in place can protect you and the people you love.
DID YOU KNOW?
83% of people insure their cars
and only 31% insure their income.1
1 Lifewise, www.lifewise.org.au/facts-research.
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‘It won’t happen to me’
It’s easy to dismiss illness and injury by saying ‘it won’t happen to me’.
But the reality is millions of Australians are impacted by serious illness or injury.
What if it did happen to you?
•One in two men and one in three women will be diagnosed with cancer at some stage in their life by the age of 852
• An Australian dies every 12 minutes from cardiovascular disease3
• 30% of Australian deaths (43,946) recorded cardiovascular disease as the underlying cause of death in 2012.
• In 2014 over 1,100 people were killed in motor vehicle accidents in Australia5
• More than 700 people were killed in accidental falls in 20106
• In Australia, prostate cancer is the most commonly diagnosed cancer in men and more men die of prostate cancer than
women die of breast cancer.7
2 Australian Institute of Health and Welfare & Australasian Association of Cancer Registries 2010.
3 Heart Foundation, www.foundation.org.au
4 Australian Institute of Health and Welfare, Cardiovascular Disease Australian facts 2012.
5 Australian Government Department of Infrastructure and Transport December 2014.
6 www.abs.gov.au, Leading Causes of death.
7 Prostate Cancer Foundation of Australia.
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Life insurance at a glance
There are five main types of insurance cover. Some pay a lump sum, and others pay an ongoing monthly amount.
Type of cover
What does it do?
Life Cover
Also called ‘life insurance’ or ‘term life’. Pays your beneficiaries a lump sum when you die
or become terminally ill.
Total and permanent disability (TPD)
Pays a lump sum if you become totally and permanently disabled.
Trauma
Pays a lump sum if you are diagnosed with either a serious illness such as cancer, heart
attack or stroke, or undergo major surgery such as a coronary artery bypass.
Child Cover may also be available, which pays a lump sum if your child suffers a serious
medical condition.
Income Protection
Provides an ongoing monthly payment of up to 75% of your pre-tax income if you are
unable to work due to illness or injury.
Business Expenses
Reimburses business owners on a monthly basis to cover fixed business costs (such as
rent, staff wages and electricity) if you are temporarily unable to work due to illness or injury.
Read on to explore the different types of life insurance in more detail.
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Life Cover – because life’s for living
Life Cover is also commonly known as term life or life insurance. Life insurance
provides a lump sum on your death or on the diagnosis of terminal illness.
Life Cover provides financial support when it’s needed most,
giving your loved ones financial security and freedom to make
choices about their future.
The right amount of Life Cover differs from person to person.
Your adviser can help you calculate an appropriate sum
insured for your circumstances which reflects your debts and
the ongoing income requirements of your dependants.
Some life insurance companies offer added benefits and
features. When you do your research and talk to your adviser,
look out for extras such as:
• funeral advancement benefit – this pays an advanced
portion of the sum insured to cover funeral costs.
• grief support services – confidential grief counselling at
an independent counselling organisation.
Karen’s story
Karen, a 38-year-old single parent, worked as an office
manager.
Aware of her financial vulnerability, with a mortgage and
sole care of her 14 year old son Steven, Karen consulted
a financial adviser and decided to take out a life cover
and trauma policy for $500,000.
Eighteen months later, Karen lost consciousness
and was rushed to hospital. She had suffered a brain
haemorrhage, and died that evening without regaining
consciousness.
Under her life policy, Karen had nominated Steven as
her sole beneficiary. Her son did well at school, and
Karen wanted to make sure he could afford to go on to
university, if he wanted to. He received the $500,000
through a trust fund set up by the fund’s solicitors. Steven
is now working hard for his HSC, with plans to become a
doctor.
Based on a real claim. Names have been changed. This is an
example only. Grounds for making a claim and level of benefit can
vary from one policy to another depending on their terms.
Child Cover insurance – cover for the whole family
Child Cover insurance – or Children’s Trauma – provides you with a lump sum
payment should your child die, be diagnosed with a terminal illness or suffer one of
a list of specified medical conditions or procedures. The benefit is paid on diagnosis
or occurrence of the illness or injury.
Child Cover is designed to ease the financial pressure on families. Benefits are often spent on medical treatment, rehabilitation,
replacing income if a parent takes time off work, or to take the family on holiday, during what is often a very stressful time.
Child Cover is generally offered as part of lump sum or Income Protection cover. Some insurers offer the first $10,000 of cover
premium-free for each child, making it a simple and affordable way to top up your family’s cover.
Differences between policies
As with adult Trauma insurance, each insurance company maintains their own list of illnesses and injuries, and it’s worth
checking with a financial adviser what each policy covers.
Medical definitions also vary between insurance companies, so do your research and talk to your financial adviser before
deciding on a policy.
Look for a policy that has a continuation option – this means that after your child turns a particular age, the policy can be
converted to an adult version.
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Total and Permanent Disability insurance –
protecting what matters most
Total and Permanent Disability (TPD) insurance provides a lump sum if you suffer an
illness or injury that leaves you totally and permanently disabled.
TPD insurance benefits are often used to eliminate debts, pay for medical expenses or fund any permanent lifestyle changes
resulting from disablement.
TPD definitions may vary depending on the particular product and insurance policy.
It’s important to do your research and speak to a financial adviser so you can consider, among other things, what definition may
be most appropriate for you given your personal circumstances. Some policies can provide for two or more TPD definitions
including those listed below.
Depending on your circumstances a policy that allows you to claim under any one of these (or similar) definitions may be more
beneficial to you.
1. Unlikely to ever work in your ‘own’ or ‘any’ occupation again.
2. Permanently unable to perform two of a number of specific ‘Activities of Daily Living’ without someone else’s physical help.
3. Loss of sight or use of limbs.
4. Suffer significant cognitive impairment (dementia-type illnesses).
5. Suffer from one of a list of serious medical conditions e.g. cardiomyopathy.
What is the difference between an ‘own’ or ‘any’
occupation definition?
Most companies allow you to choose whether you want
coverage against being unlikely to be able to work in your
'own' occupation or in 'any' other occupation again, after
suffering an illness or injury. For example, a surgeon who
injures her hands in a car accident may not be eligible for
benefits under an 'any' occupation definition, as she is still
qualified (and able) to work as a general practitioner.
However, if the surgeon has an 'own' occupation policy, she
may be eligible to claim, as she is unlikely to ever work as a
surgeon again. 'Own' occupation TPD provides a greater level
of coverage. Your financial adviser will be able to help you
choose the best definition for your personal circumstances.
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Trauma insurance – helping you through serious
illness
Trauma insurance provides you with a lump sum on the diagnosis (or occurrence) of
one of a list of specified serious medical conditions and procedures. Each insurance
company maintains their own list, but they generally include serious medical
conditions such as cancer, heart attack or stroke.
Trauma insurance is designed to provide you with money
when you need it most. You can generally use the money
how you choose, for example to cover medical costs and
treatment, or to reduce debt. Some people choose to make
a permanent lifestyle change, such as reducing their working
hours, so they can spend more time with family.
Differences between policies
Medical definitions vary between insurance companies, so
make sure you do your research and seek assistance from
your adviser when choosing a policy. What one company
defines as a ‘heart attack’ may not be considered a ‘heart
attack’ enough by another.
Some companies also offer partial payments, depending on
the level of severity of your condition.
Most policies will cover you for an extensive list of illnesses
and injuries. Check with your adviser about what you are
covered for under your policy.
Darren’s story
Darren, 34, is an electrician who works mostly on major
high-rise construction projects.
Several years ago, while still single with no children or
major financial commitments, he spoke to a financial
adviser and decided to take out income protection and
trauma cover of $200,000.
One Sunday, playing at local cricket match, Darren
suffered a minor stroke. In his trauma policy, stroke was
one of the stipulated medical conditions, so Darren made
a claim and received the full payment of $200,000. Darren
and his partner paid off part of their home loan.
Darren also claimed on his crisis benefit under his income
protection policy while he was off work. This helped
cover everyday expenses such as their home loan and
other bills.
Darren was able to return to work after four months, and
resumed playing cricket soon after.
Based on a real claim. Names have been changed. This is an
example only. Grounds for making a claim and level of benefit can
vary from one policy to another depending on their terms.
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Suncorp
Income Protection insurance – safeguarding your
income when you need it most
Income Protection pays a monthly amount while you are unable to produce an
income as a result of illness or injury.
Many policies will cover up to 75% of your salary if you’re
totally or partially disabled.
By replacing your regular income, Income Protection
payments can help you and your family maintain a level of
financial normality. Income Protection gives you the financial
freedom to focus on your recovery or treatment, without
worrying about regular expenses.
Income Protection policies are very flexible and can be
tailored to suit your individual and family circumstances.
Included and optional extras
Most Income Protection policies include certain benefits at no
extra charge, and optional benefits for an additional cost.
If you own your own business, ask your adviser about benefits
such as business rehabilitation benefits – where your insurer
will reimburse business coaching or consulting fees to help
you return to a successful business. Some insurers also
reimburse some or all additional child care costs you may
incur if you become totally disabled.
Be sure to talk to your adviser about the potential included
and additional benefits available to you.
Dan’s story
Dan is a 38 year old married father of two who runs a
successful carpentry business.
As a self-employed, sole income earner for his family,
Dan and his wife had spoken to their financial adviser
after the birth of their children and taken out income
protection cover.
Recently Dan suffered a stroke which left him unable
to work for a period of time and needing extensive
rehabilitation.
Through Dan’s income protection cover, he was able to
access a team of rehabilitation specialists. Dan’s claim
ensured that he was able to take the recovery time
he needed, with no adverse effect on his family or his
business.
Dan is now back on his feet and training for a 1000km run
to raise funds and inspire other stroke survivors.
Based on a real claim. Names have been changed. This is an
example only. Grounds for making a claim and level of benefit can
vary from one policy to another depending on their terms.
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Business Expenses insurance – keeping your
business running
Business Expenses insurance pays a monthly benefit to cover fixed business costs if
you suffer an illness or injury and are unable to work.
It works on a similar principle to income protection, as it pays a monthly benefit. However, its purpose is significantly different.
Business Expenses insurance is designed to cover the fixed day-to-day costs (up to the monthly benefit) of running your
business in your absence, such as the cost of a locum, rent, staff salaries, equipment expenses, loans and other business
overheads like electricity and cleaning bills.
Business Expenses cover helps you cover your fixed business expenses when you can’t work – so you can focus on getting
healthy again.
“But I already have Business Interruption insurance…”
Business Interruption insurance is different from Business Expenses insurance. Business Interruption insurance is not related
to your health or ability to work, but pays you a monthly amount to cover the cost of fixed business expenses if a ‘trigger’ event
occurs. Trigger events for Business Interruption insurance include things like fire or water damage.
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Myth busters
There are many misconceptions about insurance. Some people still regard it with suspicion, while others, believing they already
have the protection they need, see it as an expensive, non-essential ‘nice to have’. The reality can come as a shock.
The following ‘myth busters’ help dispel some of the more common misconceptions about insurance, and shed some light on
who needs it and why it’s so important.
Myth 1 – You’re young and healthy. You
don’t need insurance.
No matter your age or state of health, the risk of serious
or fatal illness or injury is more common than you think.
Recent research identified the top five causes of
accidental death in Australia and found that Generation Y
(aged 18-31), and more men than women, are more likely
to suffer a fatal accident. The study identified the main
causes of fatal accidents in Australia as:
1. R
oad and transport accidents (including land, sea and
air transport)
Myth 2 – Insurance is too expensive.
It’s a common misconception that insurance is expensive.
In fact, it’s not having insurance that could cost you and
your family everything. Most people are surprised to learn
that life insurance is cheaper than they think.
It’s too expensive not to have insurance!
• The average lifetime out of pocket expense for a cancer
patient is $47,200 including $38,300 in lost income,
$3,900 in non-health care costs, and $5,000 in health
care.9
2. Falls
• The cost for bowel cancer treatment alone can reach as
high as $66,000.10
3. Poisoning or choking
• The cost of a wheelchair can be more than $3,000.
4. Drowning
• Additional costs of child care, electricity, laundry and
taxis quickly add up.
5. N
atural disasters and other external forces (including
deadly accidents in and around the home, including
fires, electrocution, accidents caused by electrical
appliances or household equipment, fatal venomous
insect bites or animal bites).8
The study showed that poisoning and choking were
more prevalent amongst Generation X (aged 32 to 44)
men. Road and transport-related deaths and accidental
drowning were the highest amongst Generation Y (aged
18-31), compared to all other generations.
Unfortunately, there’s always the possibility you could
suffer a serious injury or illness you can’t recover from.
And this could seriously hinder your earning capacity.
• A funeral can cost anywhere from $7,000.11
Serious illness or injury can affect anyone, at any time.
And can be extremely damaging to your family’s longterm financial security. Having the right cover in place can
help you deal with unforeseen expenses and generally
take the financial pressure off.
Talk to your adviser about the different options for
structuring your insurance to suit your needs. Generally
income protection and business expense insurance
premiums are tax deductible. Taking out insurance
through your super can be easy and tax-effective or you
might select waiting periods with lower premiums.
Talk to your adviser about insurers that offer discounts to
young, healthy people.
8Asteron Life research: Data from the Australian Bureau of Statistics from 2001-2012 was analysed to give an aggregated view of fatal accidents in
Australia.
9 Access Economics, Cost of cancer in NSW, 2007. Access Economics for Cancer Council NSW.
10 Cancer Council – http://www.cancer.org.au/File/PolicyPublications/Submissions/Cancer_Council_Australia_pre-budget_submission_2012-13_bowel_
cancer%20screening.pdf
11 Australian Government, http://australia.gov.au/life-events/death-and-bereavement
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Myth 3 – You have adequate insurance
in your super fund.
Myth 4 – Private health insurance
provides all the cover you need.
Many people have limited amounts of life insurance
(including some form of life cover) within their
superannuation, known as ‘group insurance’.
Private health insurance is a great way to protect you
and your family against medical expenses arising from
illness or injury. The government provides incentives to
Australians who have private health insurance, including
tiered tax rebates on premiums and a reduction in the
Medicare surcharge levy.
Even so, Australians remain severely underinsured. We
generally don’t have enough insurance to cover our debts
if something happened to render us unable to work.
Isn’t my group insurance cover in my super
enough?
Group insurance is usually based on your salary and
not on how many financial dependants you have, your
family circumstances or your level of debt. The minimum
level of cover provided via your super fund is set with all
members in mind it is therefore unlikely to be exactly the
level of cover you and your family need and may not be
enough to cover all or even just come of your debts.
Not all types of insurance are available from super funds.
Funds typically offer members access to Life insurance
cover and Total and Permanent Disability insurance.
Fewer funds offer their members access to Income
Protection insurance and Trauma insurance cannot be
purchased through super.
Myth 5 – Workers compensation will
be enough to cover me.
If something happens to you at work, workers
compensation helps part of the way, but you could be
waiting a long time and it only covers some of your
expenses.
Consider what might happen if something happened to
you outside work or you suffer heart disease or cancer.
When your income stops, you don’t want to worry about
your loan repayments, bills and everyday expenses.
Life insurance goes to work where workers compensation
leaves off. Benefits can include:
• Access to the rehabilitation you need to return to work
• If you’re self employed and need to keep an eye on your
business, or work for someone else and wish to return
to work, some policies allow you to work 10 hours a
week while still receiving benefits.
• If you can’t afford comprehensive cover, you can cover
yourself for accidental injury only. Considering the
majority of claims are due to accidents, this can be a
sensible option.
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However, private health insurance, like insurance within
superannuation, can also leave you with protection gaps
and should be used as a complementary product to life
cover, TPD, trauma and income protection insurance.
A good private health insurance policy will cover the
immediate expenses of an illness or injury, while life
insurance will protect your lifestyle from being disrupted.
What is private health insurance?
There are two types of private health insurance cover
available: hospital cover and ancillary (or extras) cover.
The amount of treatment you are covered for depends on
a number of factors, including the level of hospital cover
you select, the hospital and doctor you choose to treat
you, and whether they have an affiliation with your health
fund.
Will private health insurance cover all my
medical expenses and rehabilitation costs?
Not necessarily. Private health insurance may not cover
the total cost of the doctors’ services provided to you
in hospital, or your out-of-hospital rehabilitation care
including the costs of your medication. This can leave you
with a ‘gap’ between the cost of the treatment and the
amount covered by your health fund.
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What next?
Seek advice
There are dozens of life insurance products on the market,
with differing benefits and definitions of what constitutes a
payable claim. Deciding which product will provide the best
protection for you and your family can be confusing but a
financial adviser can help.
Your financial adviser can help by assessing your situation
and evaluating the best insurance strategy for your needs.
Not only can they help you determine how much is enough,
but they can also help you:
• decide on which cover or combination of cover is most
suitable for your individual needs
• structure your policy/policies to best suit your circumstances
• review your existing cover.
Value of advice
Advice is about identifying opportunities to protect what
you work hard for. Financial advisers can help by offering
professional advice and developing tailored strategies at every
stage of your life. Whether you’re starting your first job, have a
family, or are buying your first home.
Ask a Suncorp Financial Planner or Suncorp
Authorised Representative
Suncorp Financial Planners and Suncorp Authorised
Representatives have specific industry qualifications and
are experienced in helping clients meet their financial
goals. They will take the time to listen, explain things
clearly and keep you informed. They are committed to
understanding your needs and identifying the best ways
to achieve your goals.
Suncorp is a principal member of the Financial Planning
Association (FPA). The FPA is the peak industry body
representing the Financial Planning industry in Australia.
Our Financial Planners and Authorised Representatives
are committed to the FPA’s rules of conduct, ethical and
professional standards and are required to undertake
ongoing industry training every year.
This information is current as at 1 July 2015 and may
be subject to change. This information is general advice
and doesn't take into account a person's objectives,
financial situation or needs. A person should consider the
appropriateness of the advice and the Product Disclosure
Statement (PDS) before making any decision about
acquiring or purchasing a financial product.
Should you suffer an unexpected illness or injury your world
can change dramatically. That’s why it’s good to be prepared
by protecting your income and yourself, and this is where an
adviser can help you establish the level of cover you need.
With their knowledge and access to a range of products
they can tailor a plan for your situation after assessing your
individual needs and financial responsibilities.
This information is provided by Suncorp Financial Services Pty Ltd (SFS) ABN 50 010 844 621, Australian Financial Services Licence & Australian Credit
Licence 229885, and is current as at 1 July 2015 (may be subject to change). This information is general advice only and doesn’t take into account a
person’s objectives, financial situation or needs. A person should consider the Product Disclosure Statement before making any decision about acquiring or
purchasing a financial product and seek independent financial advice. Various products and services are provided by different entities of the Suncorp Group
who are not responsible or liable in respect of products or services provided by other entities in the Suncorp Group. A fee may be payable if a financial plan
is prepared.
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How to contact us:
Call us on 13 11 55
Visit one of our branches or authorised representatives
suncorp.com.au
13364 17/07/15 A