A story about the importance of insurance

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The Importance of Insurance


If you are like most Australians, insurance is one of those things which can be put off for another day. But another day might be one too late – the story of Patty outlines how important it is to have the right insurance.

Patty was a fit and healthy single 53 year old who had just started her own bookkeeping business. One weekend she was hosting a Christmas in July party where everyone was enjoying themselves. Later in the evening she started bumping into things and slurring her speech, thinking she had drunk too much, her friends put her to bed. The next morning when she couldn’t get up she called an ambulance.

It turned out Patty had a stroke which was caused by bowel cancer. After fighting for her life for the first couple of days, she started on the slow path to recovery which included chemotherapy, physiotherapy, speech therapy and psychotherapy. She had multiple surgeries to remove the cancer and had limited use of her left side.

During this already stressful time of dealing with health issues, Patty started having money problems. Because she had just started up her business, she had limited savings. While she was in hospital there was no one to work in the business so she had no income coming in.

Patty did have trauma insurance, but she was not very good at maintaining the payments, so there was a question as to whether she was eligible for disability payments. While her friends and family were trying to sort out her financial mess, the rent on Patty’s house became overdue. With no alternative, they had to move her possessions into storage. They also had to close down her business.

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Luckily Patty did have income protection insurance through her superannuation. She had opted for the 90 day waiting period which meant that she didn’t get immediate help with her rent and bills, but before she came out of rehabilitation hospital she was able to get a regular monthly income.

What did Patty learn?

The good news is that two years on, Patty is back working as an office manager for a small business. She is now cancer free and even with slight disabilities, she has a new lease on life.

Unfortunately hindsight is always 20/20, and looking back Patty wishes that she had put better insurance in place. As she couldn’t get sick pay from a regular full time job, she should have had insurance which could have filled the financial gap, which meant she could have kept renting her house.

Could you face a gap?

Most people don’t understand the need for the right insurance until a friend or family goes through a serious illness or death, when the reality of not having a safety net hits home. What will you or your family do if you can’t earn a living? Would you have enough money to cover the mortgage or the rent?

What if something happens…? Which insurance will help? How will it help?
You become unwell or  injured and can’t work Income protection insurance Helps to cover your income  by replacing your lost  earnings
You suffer one of a number  of specified medical  conditions Trauma insurance Provides a lump sum to help  deal with medical and  rehabilitation costs
You pass away Life insurance Provides a lump sum  payment to your family which  will help them deal with their  financial situation
You become permanently  disabled Total and Permanent  Disability insurance Pays you a lump sum as you  are unable to work any more
You become totally or  partially disabled and you  have your own business Total and Permanent  Disability insurance Pays you a lump sum as you  are unable to work any more
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As an accredited insurance broker, Chan & Naylor are well placed to source the entire market for the most appropriate cover to protect you and your family.

For further information, please feel free to either call for a complementary discussion with one of specialists on 1300 99 77 34, or email your inquiry to financialoptions@chan-naylor.com.au


The advice provided on this article is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. If any products are detailed on this website, you should obtain a Product Disclosure Statement relating to the products and consider its contents before making any decisions.

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