There is great debate about the cost of insurance and whether or not it is a ‘waste of money’ or ‘not affordable’ and whilst this perceived cost can be a great talking point around the bbq, often rarely do you hear about the cost of not having the cover in place.
Two stories in particular come to mind that emphasise this point. (Real clients of ours);
Story 1 – John and Jenny
John smith* and his wife Jenny both had policies in place which covered them for Life, Trauma and Income Protection cover. Like most people, John and Jenny worked hard to meet their day to day expenses and often there didn’t seem to be much left over, so they decided to sit down and look for a for a way to cut costs.
The first thing that John and Jenny cut was the cost of their insurance cover. They thought that it was an expense that they just didn’t need and so they wrote to their insurance company and requested that their cover be cancelled.
Two weeks later John started to feel unwell and so he went to the Doctor. After extensive testing, the doctors discovered that John had bowel cancer and would need extensive and lengthy treatment. Unfortunately this also meant that John could no longer work and, as the sole breadwinner for the family, it meant that they would no longer have an income coming in to meet their day to day expenses.
The bills soon started to pile up and not only was Jenny left to deal with her very sick husband, she was also left to deal with the creditors.
If John and Jenny had kept their cover in place, then upon diagnosis of his cancer, John would have received his lump sum Trauma payment which would have finalised the mortgage on his house and he also would have been able to receive his Income Protection cover which would have provided him and his family with a monthly income that, with the mortgage finalised, would have been more than sufficient to meet their day to day costs.
So whilst John and Jenny saved themselves a few dollars by cancelling their cover. In the end it cost them a great deal more.
*names have been changed due to privacy.
Story 2 - Dave & Mary
If you had passed Dave* in the street a year ago, you would have seen a smartly dressed business man who may have seemed to not have a care in the world. How much can change in the short span of a year? Well as it turns out......A lot!!!
Dave had a good job in the business world, a wonderful wife and two lovely children. His wife Mary* was expecting their third child and Dave felt on top of the world. Because he was the income earner, Dave and Mary decided that it would be a good idea if Dave had Life insurance cover on himself just in case something happened. Like most couples, they didn’t see much point the extra cost of getting cover on Mary as she was at home with the children.
Unfortunately Mary died whilst giving birth to their third child.
Dave struggled with the shock and the grief of losing his beloved wife and he had to find a way to care for his 7 year old son and his 4 year old and new baby daughter. Friends offered assistance in the beginning and for a while Dave managed to cope. Unfortunately life moves on and the assistance from friends became less and less as their lives became busier. As a result Dave was left to care for the children on his own. This took time. Too much time. Dave was forced to leave his job in order to look after the children full-time.
With no income coming in apart from what he was able to obtain from benefits, the bills soon started piling up and when Dave no longer could afford to pay the mortgage on the house, the bank took it.
Dave packed up the children in the car and tried to find work wherever he could, however what he earnt generally was just enough to cover the cost of child care. In the end Dave and the children were homeless and living in the car. Now Dave had new concerns. He had already lost his wife, his job and his home and now he was faced with the real certainty that he would lose his family.
If Dave had taken out Life cover on Mary (for enough to at least finalise the mortgage on the house), then Dave and his children would still have a home.
*Names again changed due to privacy
These are real stories and we have only changed the names for privacy reasons. So next time you and your partner are having that conversation about ‘the cost of insurance’, please take time to consider what it might cost not to have it!
Contact our office (03) 9866 2400 or email admin@amazon.net.au if you wish to discuss your needs?
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