Most of us have it. That default insurance cover sitting within our Super Fund. But, relying on this to protect yourself and your family in the event of a tragedy could really be ‘financially dangerous.’ Rarely does this type of cover provide sufficient protection to meet your potential needs at claim time.

Without comprehensive protection, you could be relying on your savings, or dipping into your superannuation, if something goes wrong – which could seriously impact your lifestyle. For some people, it might even mean having to ask family members or friends for financial assistance, which may put you all in a difficult position financially and emotionally.

Perks Risk Management recommend reviewing your life insurance regularly with your financial adviser. With our help, you can use the flexibility of your policy to change the level of cover to suit different stages of your life, ensuring that you are sufficiently covered and not paying more for your policy than you need to be.

 

Ways to help with affordability

If you’re concerned about the cost of your policy, you may wish to seek advice from our team about adjusting premium structures and/ or level of cover to reduce the impact on your household cash-flow. Some examples include:

  • Stepped premiums can be cheaper initially but will increase every year. If you currently have stepped premiums, you may be able to change to Level premiums. Level premiums are generally more expensive to begin with, but they stay more regular over time – giving you a more consistent and predictable premium cost over the life of the policy.
  • Generally, adjusting your level of coverage may help with affordability and still provide some protection for unforeseen events that life can bring. For instance:
  • reducing the sum you are insured for, your monthly benefit or removing optional benefits
  • for Income Protection policies, increasing the waiting period or decreasing the benefit (monthly benefit)

 

However, reducing both level of coverage or the number of events covered at claim time does ultimately reduce your protection, and you should always consult your financial adviser to make sure your cover adequately meets your insurance needs.

 

Using the flexible features of your policy

Many policies have a number of features designed to make it more affordable during periods of financial pressure. These include:

  • Pregnancy Waiver – premiums can be waived for up to 6 months if you become pregnant while your policy is active.
  • Unemployment Benefit – premiums can be waived for up to 6 months if you become involuntarily unemployed while your policy is active.
  • Premium Cover Suspension – You can apply to suspend your premiums and cover for up to 12 months if you experience financial hardship, are unemployed, or are on sabbatical, maternity, paternity or long-term leave from work.

If you have any questions, or would like to review any of your policies, please don’t hesitate to contact Eddie Bell on 08 8273 9300 or ebell@perks.com.au