Insurance cover for you and your family.

The most important policies to understand.

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Term Life

Is the most basic but important form of cover. It pays a lump sum to the policy owner in the event of a sudden death or terminal illness of the life insured. It provides financial security to your loved ones by covering some of life’s big risks, including paying off mortgages/other loans, replacing lost income and education costs.

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Total & permanent disability (TPD)

This covers the policy owner in the event of an accident, injury or illness that leaves them totally and permanently disabled and unable to work again. It pays a lump sum to cover big risks such as paying off mortgages/other loans, education costs and funding for long-term disability care costs.

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Income protection

This cover pays the policy owner a monthly benefit in the event of an accident, injury or illness that causes them to be unable to work either partially or totally. The payment is usually a percentage of pre-tax income to help meet living expenses while they recover. There a choice of waiting period and benefit period for the policy.

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Trauma/Critical Illness

This provides a lump sum payment if the life insured is diagnosed with a serious illness including heart attack, stroke and cancer. There is no test of ability to work. Its purpose is to complement the other insurances assisting with medical costs and treatments, rehabilitation and short-term loss of income.

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Here are some real life examples

Having your insurance policy written correctly is critical to your circumstance and your outcome in the event ‘something unforseen happens”. Below are some short cases.

Case #1: Term Life/Terminal Illness

Situation: Professional couple in their late 40’s with 3 children under age 15 building out their lives and dreams, one high income earner ($300k+) and the other part time and family manager. Significant mortgage on family home and coastal investment property ($1.5m), private school fees ($30k per child p.a.) and high cost of lifestyle ($200k+).

Cover: A life insurance policy was obtained on the husband’s life, as he was the primary breadwinner. The policy was sufficient to cover all outstanding debts, school fees for their three children, and provide enough replacement income after taxes to supplement the wife’s earnings and cover their total cost of living. To reduce the net cost of coverage, the policy was owned within the husband’s superannuation, with premiums paid by his fund and tax-deductible to the fund. Death benefit paid to the fund allowing potential for lump sum and pension payment options.

Outcome: Husband suffers a sudden fatal heart attack (50% are fatal) while at the gym, surviving spouse and kids devastated and the reality of the loss of the primary income becomes real. We lead the claim process for the wife, including claiming for a funeral advancement benefit of $10,000 from the policy prior to the death benefit payment.

Death benefit claim later accepted, paid into the husband’s super fund and released under death provisions. Debt repaid in full, school fees paid in full with discount and investment fund established to replace lost income long term for the wife and children’s ongoing lifestyle and financial needs.

Contact us to find out more about effective Term Life insurance.

Up to 75% of Australians will experience a potentially traumatic event at some point in their lives.

Case #2: Total & Permanent Disability

Situation: Married couple with 2 kids, husband IT executive (earning over $220k) and wife family manager seeking employment. Tight financial position due to two negatively geared investment properties with debt, living costs around $150k, and limited family savings of $2,000. Husband had mental health issues from job stress and existing cover in two super funds.

Cover: Recommendation to keep existing cover after establishing with both super funds, that the medical history is covered. Job stress intensifies, causing serious depression. Under medical direction husband ceases work for treatment. We make an income protection claim which ends after 2 years. We then lead a TPD claim.

Outcome: The TPD claim took 6 months to prepare, lodge and meet the eligibility criteria. Husband is unlikely to ever be able to return to any suitable occupation. Very delicate process to support the wife with this information.

TPD claim was accepted for a total of $2.6m changing the family’s life by repaying debt, securing kids’ education, allowing for ongoing medical treatment, and creating an investment portfolio.

Husband unable to return to suitable occupation but after several years returns to better health and a functional family role.

Contact us to find out more about Total & Permanent Disability cover.

50% of Australians have at least one chronic condition, such as heart disease, diabetes, or cancer, and 25% have two or more chronic conditions.

2019 report by the Australian Institute of Health and Welfare

Case #3: Trauma/Critical Illness

Situation: Husband tragically loses wife to breast cancer, widowed in mid 40’s with 4 children aged between 8-15. Husband is an active, self employed financial services professional, moderate income, owns home and investment property with $750k debt, private school fees, $10k savings, $25k in shares. No family medical history of stroke.

Cover: Recommendation for $200k of personal trauma cover to pay for medical expenses, living costs, care support for children, and replacement income. This will help until he is eligible to claim on income protection. Husband suffers a stroke while jogging, ambulance transport to hospital, and unable to operate his business after an extended period of tests and treatment.

Outcome: Transient ischemic attack (TIA) was confirmed, meeting the stroke definition in his trauma policy. Claim prepared, lodged, accepted and paid within 14 days, no work test required. Later released from hospital under specialist care from home, private health cover recourse limited. Key symptoms are fatigue, unable to think clearly or complexly and cannot go back to work in the short term.

Trauma benefits used to meet costs and income needs, children are cared for until he gradually reassumes this responsibility. He makes a strong but not full recovery but is able to return to his business successfully in time.

Contact us to find out more about correct trauma/Critical Illness cover.

45% of Australians with income protection insurance had made a claim in the past.

2020 report by the Australian Securities and Investments Commission (ASIC)

Case #4: Income Protection

Situation: Single female dentist, age 28, self-employed contractor, high earning, doing very well professionally. Lifestyle costs $144k p.a. including two investment properties, one not generating rental income, debt $1m. Has a small personal Income Protection policy but well under her current income. She is seeking a review.

Cover: Discover she has 2 different policies. Recommend she retains the best policy to protect her occupation risks and increases the benefit in line with 75% of her income. Cancel the duplicate policy and save the premium. Recommend a 30-day waiting period. Develops wrist pain at work and is diagnosed with left intersection and de Quervain’s syndrome. It becomes so painful she ceases work completely under medical supervision and is scheduled for surgery.

Outcome: Obtain medical evidence and cessation of work details quickly to lodge the claim before the 30-day waiting period ends. Survives on own savings for 60 days as Income Protection generally pays monthly in arrears.

Claim accepted after being assessed totally disabled and commences on full monthly benefit. Also qualifies for the ‘bed confinement ancillary benefit” in her policy related for her hospital stay. These benefits are sufficient to meet her ongoing living expenses. Rehabilitation takes 9 months and graduates back to work remaining eligible for partial benefits until working full time earning her pre-disability income.

Contact us to find out more about how you can safeguard your income.

Find out more about how you can safeguard your policy.
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It’s easy to work with us:

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1. Discovery Call

Here we learn more about your unique situation and any current cover. We conduct a needs analysis to identify any gaps.

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2. Set-up

We personally present professional, written advice, tailored to your specific needs & ensure you understand the protection you’ll have in place.

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3. Be Confident

With your life insurance under Avanir’s expert guidance, and our ongoing consultation, you’ll have the peace of mind to live well.