In this edition of the Exchange Newsletter, we bring you a story that serves as a reminder for us all to ensure we have the right personal insurances in place to cover us and our loved ones should life take an unexpected turn.
A personal story about personal insurance
Picture this scenario: You’re in great health, you’re busy with work, family and social commitments, and you’re managing to stay on top of your finances. In short, you’re not just doing ok, you’re doing brilliantly. Then all of a sudden, you’re diagnosed with aggressive brain cancer and doctors inform you that you have a limited time to live – 12 months would be good, 24 months would be outstanding. Your world as you know it comes to a grinding halt. Work is no longer an option, your family rallies around you, and all focus turns to your treatment options.
If this happened to you, would you have enough money to continue paying the mortgage, household bills, school fees and medical expenses? Would your family be able to provide you with the care you need without having to worry about finances both now and in the future?
An unthinkable diagnosis
The above scenario became reality recently for one of Financial Decisions’ clients. Dan* was 48 years old, a successful professional earning an above average salary, and was fit and healthy. One day, he complained to his partner, James*, about having a headache. The headache persisted over the weekend and James noticed that Dan wasn’t quite himself. So off to the doctor they went. Tests were ordered and when the results came back, their lives changed forever. Dan was diagnosed with an aggressive malignant brain tumour that would require immediate surgery followed by intensive chemotherapy and radiotherapy. Counsellors were introduced and Dan was told he would be lucky to survive 12 months.
This type of scenario faces thousands of Australians each year. And as the cliché goes, you never think it will happen to you or a loved one. Whether it’s cancer, stroke, heart issues or a serious illness or accident, if you’re unable to work and earn an income for a lengthy period of time, your ability to meet your financial obligations is severely impacted. And when your focus needs to be on treatment and/or recovery, financial stress is the last thing you and your family needs.
“That’s why it’s essential to have the right personal insurances in place,” says Debra Davies, Client Services Co-ordinator, Financial Decisions. “Personal insurance is arguably the most important type of insurance you can ever have. Without it, you can leave yourself and your family exposed to significant financial hardship and even bankruptcy should the unexpected occur.”
Protecting loved ones
Back in 2017, Dan was working for a company that automatically provided life insurance, total and permanent disability (TPD) insurance and income protection insurance for its employees. However, in a move that would ultimately bring much-needed support and comfort for his partner and family when they needed it most, Dan also sought expert advice from Financial Decisions about whether he had the right types and amount of cover for his own personal situation.
After Financial Decisions performed a comprehensive needs analysis, it was recommended that Dan take out additional insurance cover based on a range of factors including his earning capacity, existing debts and other financial obligations. Importantly, the needs analysis highlighted where Dan was particularly vulnerable. This thorough process combined with Dan’s desire to make sure his partner and family would be protected should the worst happen, proved invaluable.
Taking financial stress out of the equation
Dan passed away in August 2020 after surviving 10 months from his initial cancer diagnosis. During his illness, he received income protection payments and trauma insurance to help pay for the medical bills. He also received a TPD lump sum of more than $1 million in June 2020 and life insurance was paid out following his death. Overall, Dan’s total insurance payout exceeded $2.2 million.
“It’s natural to focus on the payout figure and measure it against current and future financial obligations,” notes Davies. “However, it’s impossible to measure just how much peace of mind having the right personal insurances in place gives people in their darkest hour. By easing the financial pressure when dealing with serious illness, injury or death, appropriate personal cover becomes a godsend.”
An act of love
Six months on from Dan’s passing, James reflects: “It was a terribly traumatic time. Dan’s care became my sole focus, but because he had put plans in place, the financial side of things were taken care of. This enabled us to have the freedom to wholly focus on getting the best treatment and to enjoy (as best we could) the limited time we had together. I can’t imagine having to make big financial decisions or sell assets while caring for a terminally ill partner and grieving for them after they’ve passed. That financial burden would be crippling and add an enormous layer of stress to an already painful situation.”
“I see it as an act of love on Dan’s part. He wanted to make sure I would be ok financially if anything should ever happen to him. I can’t tell you how much of a gift that was.”
James goes on to add: “Debra Davies and the rest of the team at Financial Decisions were incredibly supportive throughout the entire process. In these situations, you’re not thinking clearly so to have a competent and compassionate team by your side is very reassuring. I didn’t have to worry about the financial side of things or sorting through mountains of paperwork or complicated forms, which meant I could spend more time just being with Dan – time that was so precious to us both.”
Please note:
Having experienced first-hand the importance of having the right personal insurances in place, James suggested to our team that he would like to provide a case study. “If our story helps just one person get the right level of cover for them and their family, then it must be shared,” he urged.
*Names changed for privacy reasons.
The intention of this article was not to promote Financial Decisions’ insurance services. We do not wish to profit from such tragic circumstances.
Disclaimer: This publication has been compiled by Financial Decisions (AFSL/ACL Number 341678). Past performance is not a reliable indicator of future performance. While every effort has been taken to ensure that the assumptions on which the outlooks given in this publication are based on reasonable data, the outlooks may be based on incorrect assumptions or may not take into account known or unknown risk and uncertainties. Material contained in this publication is an overview or summary only and it should not be considered a comprehensive statement on any matter nor relied upon as such. The information and any advice in this publication do not take into account your personal objectives, financial situation or needs. Therefore you should consider its appropriateness having regard to these factors before acting on it. While the information contained in this publication is based on information obtained from sources believed to be reliable, it has not been independently verified. To the maximum extent permitted by law: (a) no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up-to-date or fit for any purpose; and (b) Financial Decisions nor its employees are in any way liable to you (including for negligence) in respect of any reliance upon such information or advice. March 2021
Contact: Financial Decisions PO Box 484 Mona Vale NSW 1660, T 02 9997 4647, F 02 9997 7407