Why it pays to hold onto your insurance policies

May 29, 2014

Recent analysis by Australia’s largest life insurer TAL shows that many customers are putting the brakes on some of their most critical insurance policies too early, which is exposing them to unnecessary financial risks.

TAL found that the average person discontinues one or more of their disability, critical illness/trauma or income protection insurance policies when they turn 45. This is despite the fact that the average age for a claim under these policies is 46½ years. 

These findings are alarming and suggest more education is needed to inform people that they face an increased risk of suffering from serious illness or injury between the ages of 45 to 60. This is why we believe you should maintain some level of “living insurance” policies - trauma or critical illness cover - beyond your forties.

People who choose to cancel their “living insurance” policies need to be mindful of the risks they are taking, especially if they have dependents at home who rely on their ability to provide an income.  Before you consider cancelling your trauma or disability cover, you should consider what would happen if you were forced to stop work due to an accident or ill-health. What impact would this have on your family both financially and emotionally?

For those cancelling policies because they’re trying to save money, the good news is that when it comes to trauma or critical illness insurance, you can now choose a level of cover which is based upon the severity of a condition.

This option allows you to have significant cover in place for severe traumas, which is balanced out by having less cover for the not-so-severe traumas, where you may only need a month or two off work. This means you can still have some insurance cover in place and peace of mind that you are protecting the ones you love, without the expensive premiums.

Some insurance is always better than none, therefore if you’re thinking of cancelling your “living insurances” like trauma or disability cover, then please have a chat to us before making any big decisions. We may be able to help you find a more affordable way of protecting yourself and your family from unseen illnesses.

If you would like a free, no-obligation chat about your trauma/critical illness or disability cover, then click here to get in touch with us.