Why One Size Fits All Isn't Good Enough
The set it and forget it mindset is convenient and almost a knee jerk reaction in this day and age. Most of us automatically pay our bills, especially those that are fixed price bills and some even like having our life insurance automatically paid for through our superannuation.
When you sign up for superannuation, life insurance is automatically turned on for you. This is known as “default” life insurance and the life insurance cover is paid directly out of your superannuation.
You never miss the funds you don’t see but do you know what you’re paying for and do you know how much you’re paying?
The pro of life insurance through a superannuation is good as you have life insurance in case something happens to you.
The con of life insurance through superannuation is that it’s one-size-fits-all coverage and if we are honest, one-size never really fits all.
Prior to joining the FiftyUp Club team, Shelia, Head of Content checked her superannuation and didn’t realise she was getting “default” life insurance. She said she didn’t have a problem with getting life insurance, but the issue was that she was automatically defaulted as a smoker, which upped her premium cost.
“As a non-smoker, I shouldn’t automatically be categorised into the smoking category,” Shelia says. “I like the idea of life insurance but life insurance isn’t one-size-fits-all and I learned the hard way by paying for more than I needed to.”
WHY ISN’T ONE-SIZE-FITS-ALL GOOD ENOUGH?
Your coverage amount might not be enough - the one-size-fits-all insurance also sets your coverage. You may be getting coverage for $200,000 when what you really need is $400,000. Should anything happen, you are not covered for the full amount you and your family need.
Your claim could be denied - because you were chucked into the everything and everyone bucket, your claim can be denied for a myriad of reasons from health, smoking vs non-smoking, pre-existing conditions and more. The “default” policies can contain built in exclusions which often apply to pre-existing conditions.
WHY FULLY UNDERWRITTEN LIFE INSURANCE?
No surprises cover - you are fully assessed up front about your health and lifestyle though your application, questionnaires and/or medical tests. This increases certainty at claim time.
Customised cover - once you’ve been fully assessed, your coverage is customised to what you need. You have the flexibility to have quality cover at a price you can afford.
SHOULD I KEEP MY SUPERANNUATION LIFE INSURANCE COVER?
Only you can answer that question, but we do suggest you call up your super fund and ask these 3 questions:
- What is my cover? (Example - Am I covered for death and TPD?)
- How much does my cover cost?
- May I have paperwork outlining exactly what I’m covered for?
Once you have the information above, it’s time for you to sit down and figure out how much money you and your family need if something happened to you.
OTHER THINGS TO KEEP IN MIND
If you have moved into a casual role, you could be paying more than you need. On the opposite end of the spectrum, if you have a more hazardous role, you may be paying less than you should for a cover that isn’t right for you.
For the over fifties, most policies stop cover if you are over 65 years young.
DID YOU KNOW: FiftyUp Life Insurance are available to the age of 69 and can be renewed until age 99.
Don’t let your “default” insurance come back to haunt you. Review your cover and make sure it is what YOU need.
Any information contained in this communication is general advice, it does not take account of your individual circumstances or needs.
FiftyUp Club Pty Ltd (ACN 166 905 175) is the promoter of the FiftyUp Life Insurance product and is pleased to work with NobleOak to make this product available to you.
FiftyUp Life Insurance cover is issued by NobleOak Life Limited ABN 85 087 648 708 (AFSL No.247302). Please consider the FiftyUp Life Insurance PDS and NobleOak's Financial Services Guide which set out the terms and conditions for the Life Insurance cover to make sure this cover is right for you.