Month: October 2024

Accidental Life Cover is a type of insurance that provides a lump sum benefit to your beneficiaries if you pass away due to an accident. For a claim to be successful, the event must be deemed unplanned or unforeseen, resulting in accidental death. This type of cover is designed to offer financial support to your loved ones during a difficult time.

What Does Accidental Life Insurance Cover Include?

Your policy schedule will specify the amount of coverage you have under Accidental Life Insurance Cover. This lump sum can be used by your beneficiaries to pay off debts such as a home loan or credit cards. Additionally, it can help cover future financial needs, including school fees, daily living expenses, and the costs associated with raising children.

One of the main advantages of Accidental Life Cover is its affordability. Since it only covers specific circumstances—namely, accidental death—the premiums are generally lower compared to a standard Life Cover policy. However, this also means that the coverage is less comprehensive.

Coverage Details of Accidental Life Cover

What is Covered:

• Death caused by an Accident: Yes

What is Not Covered:

• Death caused by an Illness: No
• Partial Disability caused by Illness or Accident: No
• Total Disability caused by an Accident: No
• Total Disability caused by an Illness: No
• Serious Injury Caused by Accident: No

Common Exclusions in Accidental Life Cover

Accidental Life Cover policies often have specific exclusions. These may include:

• Working at heights
• Working underground
• Unlawful or criminal acts
• Aerial flying, unless as a passenger operated by a licensed pilot or airline
• Hazardous recreational activities, such as motor sports, base jumping, rock climbing, and certain contact sports
• Self-inflicted acts that cause death
• Mental illness
• Joining the armed forces

Conclusion

Accidental Life Cover can be a valuable addition to your insurance portfolio, providing financial security for your loved ones in the event of an accidental death. However, it’s important to understand the limitations and exclusions of this type of policy. By knowing what is and isn’t covered, you can make an informed decision about whether Accidental Life Insurance Cover is right for you.

If you need more information or further assistance, feel free to reach out to Morgans Insurance Advisors as your preferred life insurance broker for an obligation-free consultation. We’re here to help you navigate your insurance options and find the best coverage for your needs.

When you pay for life insurance premiums, you deserve the peace of mind and security that comes with knowing your policy will protect you and your loved ones when it matters most. The last thing you want is to face unexpected obstacles or a denied claim during a critical time. This is why having confidence in your Life Insurance, Total and Permanent Disability (TPD), Trauma, and Income Protection Insurance cover is essential. After all, you are investing in these policies to ensure you are adequately insured.

The Importance of Completing Your Underwriting Upfront

One of the key benefits of underwritten insurance is the upfront completion of the underwriting process. This means that from the start, you will know exactly what your policy covers. If you have any past health issues that could affect a claim, an underwritten policy will clearly outline any exclusions. This transparency allows you to understand your coverage fully and avoid surprises later on.

Once your policy is underwritten, any future changes in your health or occupation will not impact the original terms of your contract. This means that unforeseen circumstances will not negatively affect your insurance cover or premiums, providing you with long-term stability and security.

Timing of Claims Assessment: A Crucial Difference

The timing of the claims assessment is a significant difference between default insurance and underwritten insurance. With underwritten insurance, the assessment is done upfront. Your policy is either accepted with standard terms or with special terms, which are clearly outlined in your contract. This applies to Life Insurance, TPD, Trauma, and Income Protection.

In contrast, default insurance, often provided automatically through super funds, is assessed at the time of the claim. This can lead to uncertainty and potential difficulties when making a claim. If you are in good health and younger, it may be more beneficial to secure an underwritten insurance contract. This proactive approach ensures that you are not paying for insurance that might be challenging to claim or could be denied when you need it most.

Conclusion

Choosing between underwritten and default insurance is a critical decision that can impact your financial security and peace of mind. By opting for underwritten insurance, you gain clarity, stability, and confidence in your coverage. Understanding the terms and conditions of your policy upfront allows you to make informed decisions and ensures that you and your loved ones are protected when it matters most. Investing in underwritten insurance is a proactive step towards securing your future and avoiding the pitfalls of default insurance policies.

When searching for Life Insurance, Total and Permanent Disability (TPD), Trauma, and Income Protection insurance, the cost is just one factor to consider. Different insurance companies may offer better rates depending on your age and occupation. However, the terms offered by different insurers can be even more crucial, especially when it comes to income protection or TPD cover.

Occupation Ratings and Terms Differ Across Insurers

When it comes to insurance, your occupation plays a crucial role in determining your overall risk and the premiums you pay. Insurance companies use your job as a key factor in their risk assessment process, which not only influences your premiums but also the specific terms of your insurance contract.

For instance, if you are a ‘White Collar’ worker, some insurance companies may allow you to return to work from day one following a disability or illness without affecting your ‘waiting period.’ This means you can continue working without having to wait for a certain period before your insurance benefits kick in. On the other hand, some super funds have stricter requirements. They may stipulate in their product disclosure statements that ‘White Collar’ workers must experience 14 days of total disability before they are eligible to make a claim under their income protection products. If this condition is not met, your claim could be denied.

Underwritten Cover

Another important consideration is whether you have underwritten insurance cover.

Underwritten cover refers to an insurance policy that has been fully assessed and approved by the insurance company based on your individual risk factors. This process involves a thorough evaluation of your personal information, such as your health, occupation, lifestyle, and medical history. Here’s why underwritten cover is important:

Greater Certainty and Stability

When you have a fully underwritten insurance policy, it means that the terms of your contract are fixed and agreed upon at the time of underwriting. This provides greater certainty because the insurance company cannot change the terms of your policy later on. You can rely on the definitions and conditions outlined in the product disclosure statement that was in effect when you took out the policy.

Default Cover

In contrast, a default insurance contract (often offered automatically through your super fund) may be subject to changes as the product disclosure statement of your provider evolves over time. It’s important to note that the same insurance company may provide different versions of their product disclosure statement depending on whether you apply for cover directly with the insurance company or via a third-party offering, such as a super fund.

General Advice

The information in this blog contains general information only. We have not taken into consideration any of your personal objectives, financial situation, or needs. Before taking any action, you should consider whether the general advice contained in this blog is appropriate for you, having regard to your situation or needs. We recommend consulting a licensed or authorised financial adviser if you require financial advice that takes into account your personal circumstances.