If considered from the wrong angle, insurance premiums can feel as irritating as a fly that returns to buzz around your head.
No matter how much you wave your hands in the air and wish they would disappear, they continue to exist.
In fact, you might become frustrated enough to consider cancelling your policy and buying some bug spray.
The question to consider is, “What would life look like without them around?”
Let’s start with the fly.
A fly is an amazing creature when you consider its abilities and functions. It has a million eyes (at least!) and plays an important role in the food chain. There’s no doubt they can be a pest when you are eating a steak sandwich while enjoying the sunshine and good company on a Summers day, but please note the positives vs. the negatives in this picture.
For a relatively small amount of irritation, the trade-off you receive is well worth it. When there are flies around there is usually warm weather. Warm weather often leads to outdoor recreational activities; socialising with friends or just soaking up some sunlight. I personally value time like this, so it is a trade-off I am happy to make. I value the ability to socialise and enjoy the warmer weather. The mild irritant of having to swat away a few flies is negligible.
If you have premiums to pay, it generally means you have an income and are working towards the lifestyle you want.
You have something worth protecting – You. Without you, there is no income.
Your insurance policy is not something you can hold in your hand and show your friends and family. It is not a tangible asset, but it is indirectly linked to your tangible assets; your house, car – the sand between your toes on your beach holiday.
You work hard to earn your income whether you are an employee or are self-employed. Money you earn is what pays the bills for your home and car. It enables you to have the lifestyle you enjoy.
What if that income was no longer available; the unthinkable happens and you experience an accident or serious illness?
We don’t like to think it happening, but the reality is, that is can.
It wouldn’t take very long for the loss of income to add up to thousands of dollars. That equates to the lost ability to service repayments and upkeep for your home, car and general household costs. You may no longer be able to finance the lifestyle you have worked for.
What does Income Protection look like?
Let’s look at a general example using the Australian average wage of almost $59,000 annually. (ABS statistic, May 8, 2014)
This equates to an income of approx. $4,900 per month, which is the figure being insured against.
Insurance premiums are variable depending on; age, occupation and health status and the insurance company used.
However, the cost to transfer this risk (potential loss of $4,900 in income per month) to an insurance company, would only be percentage of the monthly benefit (75% of $4,900 equals $3650 per month benefit) you would receive under an income protection claim.
I’m not a financial adviser. I am someone like you, who has seen first-hand the impact insurance or lack-there-of, can have on lives.
In the years I have worked with the Monash Group Financial Planners team, I have heard many stories about how insurance has empowered people financially during medical crises and traumas.
I have also heard the stories of families struggling to make ends meet after a tragic uninsured event occurred.
I want a happy-ending story for you and your family.
I encourage you to talk to an adviser (Jack or Katie here at Monash Group FP would love to see you), before you make a decision to purchase or cancel an existing policy.
Then you can make an educated decision by weighing up the benefits – before you get out the bug spray.