1. Why do I need insurance?
It doesn’t matter how careful you are, there are things in life you can’t control. And even the smartest plans can come unstuck if you don’t give yourself adequate protection.
Whether you’re looking to protect yourself, your family, or your assets, insurance can give you the second chance you need to get on with life – without having to start all over again.
2. What types of insurance are available?
Monash Group can help you with the following two types of insurance:
1. Life insurance
Life insurance protects you and your family from the financial consequences of sickness and injury. There are a range of different kinds of life insurance products.
Here are the three main categories:
- Income Protection
- Life Insurance
- Total Permanent Disability
2. Business insurance
Business insurance is designed to offer asset protection and employee protection. You can take it out for a whole range of reasons but mostly people get it to ensure they can meet their financial obligations upon the death or disablement of a key person or business owner.
Monash Group can assist you with:
- Business protection insurance – this keeps your business up and running even if you aren’t.
- Group insurance – this insures your employees if things go wrong in their lives.
Monash Group does not provide general insurance but can refer you to associates who specialise in this area.
3. Why not purchase insurance online?
People are unique and therefore everyone’s insurance needs are different
To state the obvious, people are not like cars. They don’t come in easily defined models with a manual that outlines parts and specifications. Each individual is unique in lifestyle, health, industry, financial expectations and limitations.
There are a huge range of variables that must be taken into consideration. When you are buying life insurance or any of the associated products such as trauma or income protection, you are buying a product with the expectation that the service will meet your needs.
Purchasing insurance off the shelf could have quite devastating consequences come claim time. Decisions made on a commodity basis where price is the primary driving factor, leave you vulnerable. It is possible that you have purchased a product that isn’t going to meet your individual needs.
With the right insurance you are not left making decisions based on whether you can afford to do it or not; you make decisions purely with your welfare in mind.
4. How much Income Protection (IP) insurance do I need?
Most income protection policies will provide you with cover for up to 75% of you gross income. This is typically enough to cover the essential costs of living. Alternatively, you can reduce your premiums by taking out a lower level of cover.
5. How much Total and Permanent Disability (TPD) insurance do I need?
There is no set rule for estimating your Total and Permanent Disability Insurance needs. Here you should bear in mind that this type of cover is usually an inexpensive add on to Life Insurance and for that reason may automatically be set at the same amount. Nevertheless, you should consider how much insurance you would need to maintain your lifestyle if you became disabled.
6. How much Trauma insurance do I need?
The purpose of Trauma Insurance is to keep your life on track if you are struck with a sudden, debilitating illness; many policies allow you to set your own levels of cover so it’s worth thinking about how much you need.
7. How much does insurance cost?
The cost of insurance is called the ‘premium’. It is calculated based on the amount of cover you want, and the risks associated with the asset you want to cover. You can usually pay this premium monthly, half yearly or annually.
Some factors can impact the cost of the premium – like the age of the asset you wish to protect, or in the case of life insurance, whether you are a smoker or non-smoker. You can also receive discounts for having multiple policies or for maintaining your insurance for a specified period.
8. What is life insurance?
Put simply, life insurance provides the financial means to preserve your way of life, or that of your family, in the event of an accident, serious illness or even death.
We don’t like to think about ‘worst case scenarios’ but taking some time to consider the risks and having a contingency plan is like carrying an umbrella – it can’t stop the rain but can provide much needed financial protection during life’s storms.
Here are some of the common risks you may face and how to insure against them:
- Serious accidents or illnesses resulting in permanent injury or loss of life.
- Term Life Insurance
- Total and Permanent Disability Insurance (TPD)
- Income Protection Insurance (IP)
- Business Expenses Insurance and Key Person Insurance.
- Illness or temporary disability.
- Income Protection Insurance (IP)
- Trauma Insurance
- Unemployment. (Generally, you can’t insure against unemployment. The cover that is available is very short term and comes with many restrictions, which may impact on your ability to claim.)
9. What is the claims process?
Claim time is when your insurance policy really proves itself. After all, it’s when the financial back-up plan you put in place ‘just in case’ has to kick in to provide financial security to you and your family.
If you do have to make a claim, your circumstances at the time are not likely to be great, so Monash Group has Claims Care Service in place to provide a helping hand during your time of need.
At claim time you or your nominated person will be asked to complete a claim form. This will include details about the condition including diagnosis and doctor’s appointments and you will be asked to supply copies of medical certificates, reports or tests as well as your original policy documents.
If you are claiming on someone else’s behalf on a Life Insurance policy you will need to supply a copy of the death certificate.
Read more: Claims Care Service
10. How much Superannuation do I need?
From ASIC
How much extra money you should contribute to your super depends on what you’ll need to live off once you retire. The amount of super you need depends on many variables.
This might include:
- How long you live
- What type of lifestyle you want
- What makes you happy
- Future medical costs
There are various superannuation calculators available, but to create a personalised plan we recommend speaking to an adviser who can work through the process with you.
11. Insurance in Super: how does it work?
If your insurance policy sits within your superannuation fund it has implications on your claims process.
Any insurance within super must comply with the trust deed as well as the policy conditions and legislation.
Essentially, the process of a claim is more complex and potentially restrictive.
Talk to a financial adviser to ensure you understand your insurance and super and are optimally positioned to insure your lifestyle.
12. What is underwriting?
Not all life insurance policies are underwritten, but because some are it is important to understand what it means.
Underwriting is a term used by life insurers to describe the process of assessing risk, ensuring that the cost of the cover is proportionate to the risks faced by the individual concerned. People with the same or similar risk pay the same or similar premium rates.
The process of underwriting takes place when you submit your application. To assess a person’s risk, life insurers rely on information from a range of sources. If you are applying for a policy that is underwritten, as a minimum you will be asked to complete an application form and a medical questionnaire.
Approximately 93% of applicants that go through the underwriting process will not experience any difficulty and will end up paying the standard premium rates for their life insurance.
People who have a higher risk of developing chronic illness or who work in high risk occupations are usually required to complete additional forms and may be asked to pay an extra premium to cover this risk. This only happens to a low proportion of applicants. And an even smaller number may not be eligible for cover at all.
Remember, if you have access to insurance through your super or through your employer, the insurance company may decide not to assess the risks for every individual in the policy. Instead they may spread the risk across everyone in the group. This is called a ‘Group Policy’.
