Protecting Your Wealth
Ensuring you have a solid Plan-B to mitigate risk wherever possible can give you peace of mind when other uncertainties exist. It sounds heavy but now is a great time to make sure these aspects of your life are ticked off.
Getting a Will and Powers of Attorney drafted or reviewed is often a rainy day job. We can help you review what you have or put something in place that meets you or your family’s objectives. We have both a low-cost, simple solution and a comprehensive service for those who need it. Having a Will is critical to ensuring your wealth is protected from a range of risks, including tax.
To make it easy during this restrictive period of social distancing, our Estate Planning Service can be delivered by video conference and an electronic data capture process.
We also have some educational material you are welcome to access as a starting point, including a ‘Stage 1’ Succession Planning health check.
Life and Income Protection Insurance
Whether you're considering Life Insurance for the first time, or are unsure what cover you have with your current Life Insurance policy, we know there are a lot of unknowns at the moment. The onset of COVID-19 means people are uncertain and concerned about their health and income, and the protection of their families.
Does Income Protection Insurance Cover Me If I Am Laid Off From Work?
Yes and no. You can’t claim on your policy for being made redundant because of COVID-19; however, some Income Protection Insurance policies do include a feature to waive the income protection premiums for up to 3 months.
‘Repayment Relief’ or ‘Mortgage Option’ can also be purchased as an optional benefit. This is a monthly benefit for up to 3 months to help cover home loan repayments. This can be claimable if you have become involuntarily unemployed for more than 60-90 consecutive days (subject to your insurer’s Product Disclosure Statement).
You may also consider a Premium Pause/Holiday Benefit. This means that you will not have to pay premiums for up to 12 months, although you will also not be covered during this time. It simply means that you can restart your cover within 12 months without having to go through underwriting again. This is a preferred option to cancelling your cover; however, there are better options that help to avoid not having insurance.
Am I Covered If I Contract COVID-19?
As morbid as it sounds, you are most likely covered for terminal illness as there is generally no pandemic exclusion on good-quality Life and Income Protection Insurance policies. Most insurance policies provided as the default cover of a superannuation fund, however, are NOT likely to cover you for COVID-19 as they do have a pandemic exclusion clause. This includes Industry Funds.
Trauma and Critical Illness
Some insurers have a critical care definition in their Trauma Insurance policy, although this is different for every insurer. It is subject to how many days in intensive care you require. As well as this, if a secondary medical condition arises and it meets the current insurer’s Trauma Insurance definitions, you are likely able to claim on that condition
Yes, you are most likely covered for Income Protection but, like all Income Protection claims, this is subject to the current exclusion definitions on your current policy. You must also meet the Waiting Period requirements due to your policy’s accident and/or injury definitions or sickness.
Total and Permanent Disability (TPD)
You are covered for TPD as a result of COVID-19; however, you will need to meet the TPD definition of whether it is a total disablement that has arisen due to the virus. This means you need to be off work for at least 6 months (TPD owned via Super) or 3 months (TPD personally owned), and unlikely to ever return to your usual occupation.
If I Am Suffering From Financial Hardship, What Are My Premium Options?
There are multiple options available, based on each case-by-case scenario. In the case of redundancy, premium waivers are offered by some insurers. ‘Premium holidays’ are also an option, but note that by putting your premiums ‘on hold’, you are also without cover during the ‘holiday period’.
What Are The Insurers Doing To Support People During The COVID-19 Crisis?
So far it seems that the majority of insurers are treating each client on a case-by-case basis, but there has been some noise around whether insurers can offer some form of disaster relief discount. For example, a 1-month premium freeze while keeping individuals covered.
The difficulty with this option is that this pandemic definition does not meet the natural disaster definition; however, we’re hopeful that some respite will be offered, perhaps with some government or regulatory intervention. As advisers, we are pressuring our insurers to implement this.
Are Insurers Comfortable Taking New Insurance Applications During The COVID-19 Crisis?
The answer is yes, subject to possible altered terms. There is talk about a mandatory travel exclusion that will apply during the pandemic, but whether this applies to soft borders or overseas travel, we are unsure at this stage. There is also talk of a possible blanket COVID-19 exclusion, but this is only a discussion point at this time. Generally, insurers are still providing cover and, in times of uncertainty, applications for Life Insurance tend to increase, which we are experiencing.
More recently, TAL was in the headlines for “excluding COVID-19” for new policies. This has been on a case-by-case basis where applicants have been subject to some heightened level of risk due to travel or their profession. Due to the recent market pressure and the media/public response last week, TAL has reversed this decision.
We hope this insurance information provides some clarity and peace of mind during these times of need. If you do need any further assistance when it comes to your life insurance options, we are genuinely here to help you.
Please get in touch with our BlueRock Life Insurance Specialist to discuss your situation.
Generally, insurance companies increase their premiums on 1 April each year so it’s worth revisiting your policy before this occurs. It was announced on 29 March 2020, however, that health insurance premium increases will be put on hold for 6 months as a result of COVID-19.
This means you now have more time to review your policies, make sure that you are with the right health insurer and that you’re covered for what you need. This may be something to look at while you’re home on the weekends...and every day!
CTA: Feel free to chat to one of our health insurance advisors for more information about your cover during COVID-19.
We also have a BlueRock General Insurance team which can assist with making sure you have the right cover (home, contents, cars, landlord, professional indemnity, public liability, etc) and that you are paying the right premiums.
Note that the above information is General Advice and does require further validation before you make any drastic changes to your current private wealth strategy. But there are some important considerations that may help you to ask the right people the right questions and ultimately, benefit your future self.