In these uncertain times of the COVID-19 pandemic and the impending economic recession building up from the fallout, it’s always good to take certain precautions to guarantee yourself and your dependents are protected financially in case you were to become ill, incapacitated, unable to work or in a worst-case scenario, pass away.
In such scenarios, the first questions that usually spring to mind are: “How will I afford to pay my bills?” or “How will my family afford to pay the mortgage if I die?”.
The most common answer I hear is “It’s ok, I have life insurance and income protection in my super!”. Most of the time this may be the case, however, if you did not apply for this cover, you most likely are not covered unconditionally until you are underwritten.
Most people assume that their existing super cover will protect them and it’s not until they claim that there becomes a wave of difficulties.
What does being underwritten mean?
Being “underwritten” means the insurer has assessed your medical records, interviewed you and has agreed in their policy to pay out the claim when you or your beneficiary claims the policy. If you were to attempt to claim without being underwritten before making the claim, they could deny the payout. There is a reason law firms advertise services to try and recover money from your super fund insurance policy. It’s rarely straight forward.
For example, if you were a healthy non-smoker with no pre-existing health issues who applied for life cover and got underwritten, but started smoking the next day after being underwritten and passed away a year later from lung cancer, the insurer would still pay out the claim to your beneficiary because at the time you applied for the cover you had no pre-existing health issues and you had been assessed by the insurer. Without assessment and generic cover from your super, it is possible that your dependents may not receive the same payout.
Benefits of Life Insurance Cover
One of the benefits of Life/TPD and income protection cover is that it can be structured so that your super fund pays the premium and it won’t affect your day to day cash flow.
How Can I Apply For Formal Cover?
Applying to be assessed for life insurance cover is as simple as contacting your (finance/insurance) broker.
A Broker can structure an arrangement and tailor appropriate cover for you based on your requirements and you can sleep easy knowing that the insurance company is contractually bound to honour your cover rather than rely upon the uncertainty of generic cover.
Need help about applying for formal cover and have further questions about the process?
Feel free to contact us here or message us on our socials below.