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Let's talk about personal insurance · She's On The Money

0:00
Speaker 1: She's on the Money, She's on the Money.
0:12
Speaker 2: Hello, and welcome to Shoes on the Money, the podcast
0:15
Speaker 2: for millennials who want financial freedom. This episode of the
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Speaker 2: show is brought to you by sports Girl and their
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Speaker 2: twenty twenty Be That Girl campaign, which we will be
0:23
Speaker 2: chatting about shortly as it features a certain dark headed
0:26
Speaker 2: financial advisor currently sitting across from me. My name is
0:29
Speaker 2: Georgia King, a copywriter and TV assistant whose money smarts
0:32
Speaker 2: could definitely use some improving and it would seem I
0:35
Speaker 2: am in luck as I am as always, joined by
0:38
Speaker 2: millennial money whiz kids slash wonder woman slash Australian sweetheart,
0:42
Speaker 2: Miss Victoria to bye, Georgia King.
0:44
Speaker 3: That was not the script that we had agreed just
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Speaker 3: from with it.
0:49
Speaker 2: So today on the show we are going to be
0:51
Speaker 2: delving into the intricate world of insurances, home, car, travel, income.
0:56
Speaker 2: The list of insurances out there is almost never ending.
1:00
Speaker 2: Today we are talking about the elusive world of personal insurances.
1:04
Speaker 2: Now Victoria tells me there are four different types we
1:06
Speaker 2: are covering in our combo today, Life insurance, TPD, income
1:10
Speaker 2: protection and trauma insurance. And whilst I don't know what
1:14
Speaker 2: any of those are yet we all will by the
1:16
Speaker 2: end of the show, hopefully before we get into the
1:19
Speaker 2: thick of it, Victoria, let's chat money wins and confessions.
1:22
Speaker 2: How did you go this week?
1:24
Speaker 3: Hello, geez, I am so excited that we are covering
1:27
Speaker 3: this topic. Everybody thinks it's going to be really dry
1:30
Speaker 3: that I am including site because it's one of my
1:33
Speaker 3: favorite things to talk about. But before that, I have
1:37
Speaker 3: a money win for you. Okay, this is the season
1:39
Speaker 3: of money wins. This week, I attended the nbl MVP
1:45
Speaker 3: And for those of you who don't know, because I
1:47
Speaker 3: didn't know before I was invited to it by Morgan,
1:49
Speaker 3: that's like the brown Low version of Basketall Basketball's ninety nine.
1:54
Speaker 3: It's so so fancy, stunning, amazing. Everybody's dresses we next level.
1:59
Speaker 3: So that meant I had to step my game up
2:00
Speaker 3: a little bit. And it turns out I don't have
2:02
Speaker 3: a wardrobe full of ball gown What do you mean?
2:04
Speaker 3: I know, right, it's just completely despicable of me. But
2:08
Speaker 3: what I did was go down to my friends at
2:09
Speaker 3: her wardrobe and they organized a really beautiful dress for
2:12
Speaker 3: me to wear for one night that I could give
2:14
Speaker 3: back the next day and it meant that I got
2:16
Speaker 3: to wear an eight hundred dollars dress for a night,
2:18
Speaker 3: but definitely not part with eight hundred dollars. And I
2:20
Speaker 3: feel like that's a massive money and for the environment
2:24
Speaker 3: and pretty much for everybody that was probably attending that
2:26
Speaker 3: of exactly. Yeah, like, let's be honest, no, but I
2:30
Speaker 3: was really stoked about that, and I just feel like
2:33
Speaker 3: I didn't need a ball gown sitting in my wardrobe
2:35
Speaker 3: that I wasn't going to.
2:36
Speaker 2: Probably won't wear it again, maybe making podcast records, I
2:38
Speaker 2: don't know.
2:39
Speaker 3: Yeah, it just made me feel a little bit less
2:40
Speaker 3: guilty about the whole absolutely one dress wear kind of thing. Yeah, anyway,
2:44
Speaker 3: do you have a money win or a money confession?
2:46
Speaker 2: I have a confession this week.
2:48
Speaker 3: I can tell from the look on your face.
2:50
Speaker 2: Yeah, I'm pale and what I'm feeling sick about it.
2:53
Speaker 3: You're pretty tam though, like you just look a bit down.
2:56
Speaker 2: Sorry, Okay, let me explain it to you. I'll paint
2:58
Speaker 2: the picture. So is that a trendy bar in Carlton
3:02
Speaker 2: with my best friend loose? How are you loose? Good
3:03
Speaker 2: to see? And I ordered a beer instead of a
3:06
Speaker 2: cocktail because it's usually half the price. I didn't want
3:09
Speaker 2: to spend twenty dollars. I was trying to trying to
3:11
Speaker 2: create a money win to make you proud, Victoria.
3:13
Speaker 3: I'm very impressed. I feel like I don't really like beer,
3:15
Speaker 3: so that never works.
3:17
Speaker 2: Yeah, yeah, it works for drink like a fish. Anyway,
3:19
Speaker 2: I ordered my beer and the lady goes, that'll be
3:22
Speaker 2: eighteen dollars please.
3:23
Speaker 3: Did she charge you twice?
3:25
Speaker 2: No? Well, I don't know what. She made a horrible mistake,
3:28
Speaker 2: but I was too much of a pushover to question it,
3:30
Speaker 2: so I know, I just tapped and I went. But
3:33
Speaker 2: the kicker is that the guy from Client Liaison, which
3:36
Speaker 2: is a really trendy Australian bound guys.
3:38
Speaker 3: He was standing a shout out from YouTube.
3:40
Speaker 2: He gets a shout out hunts and guy, so he
3:43
Speaker 2: was standing behind me and I didn't want to. I
3:45
Speaker 2: didn't want him to think that I was tight. So yeah,
3:47
Speaker 2: I just paid it and ran.
3:49
Speaker 3: And now he just think buy really expensive hair.
3:52
Speaker 2: He thinks I'm cool. That's not cool, is it?
3:54
Speaker 3: That's really not that cool? But also, of all, people
3:58
Speaker 3: do not stand up when they're odged more than they
4:01
Speaker 3: should have been. I just feel like it should have
4:02
Speaker 3: been you.
4:03
Speaker 2: Yeah, I know, I GISs. Anyway, let's move right along
4:06
Speaker 2: to the Facebook community, which was impressive as always this week, Victoria,
4:11
Speaker 2: did anyone stand out to you in particular?
4:14
Speaker 3: Yes, they did. So She's not my friend, but I
4:17
Speaker 3: totally feel like I was at her birthday. Okay the
4:19
Speaker 3: post she put on Facebook this week, So this is
4:23
Speaker 3: a post from Mary, and she did this massive post,
4:27
Speaker 3: including really gorgeous photos that she had taken of her
4:30
Speaker 3: birthday on a budget. She said that she had celebrated
4:32
Speaker 3: her twenty first birthday at home and wanted to share
4:34
Speaker 3: some of her money wins to help save some serious
4:37
Speaker 3: dollars when it came to birthdays. And she literally put
4:41
Speaker 3: down this list of all these things she did for
4:43
Speaker 3: herself little hacks, yeah, instead of you know, going and
4:47
Speaker 3: sourcing them out right. So she said that she did
4:49
Speaker 3: a DIY cake that cost her fifteen dollars and looked
4:52
Speaker 3: delicious instead of like two instead of two hundred dollars.
4:55
Speaker 3: She did a DIY grazing table that cost her like
4:58
Speaker 3: one hundred and thirty dollars, which is completely understandable because
5:01
Speaker 3: cheese can be so expensive really so though, but professional
5:05
Speaker 3: grazing boards are often like six or seven hundred dollars,
5:08
Speaker 3: and she did her own balloon arch that she bought
5:11
Speaker 3: online and put together herself. And I just feel like
5:13
Speaker 3: that's really savvy and I wanted to talk about it.
5:16
Speaker 2: Absolutely well done, Mary. Mine is also from a Mary Mary.
5:21
Speaker 3: Mary quite contrary? Is that what's going on?
5:24
Speaker 2: I think it could be. Mary has written my first
5:26
Speaker 2: official money win. I had an appointment booked with my
5:29
Speaker 2: regular hair salon to the end of March, but I
5:31
Speaker 2: realized today how desperate my hair was looking and decided
5:35
Speaker 2: I needed a trim asap. She usually pays well over
5:37
Speaker 2: two hundred dollars. She then did some research and found
5:40
Speaker 2: a walk in place that's open on Sundays in the
5:42
Speaker 2: middle of a shopping mole in town, which do look
5:44
Speaker 2: quite dodgies sometimes. She's written, She's not that snobby about
5:47
Speaker 2: her hair, and she'd always had a bit of an
5:49
Speaker 2: icky feeling about those kind of express haircut places. But
5:52
Speaker 2: she was desperate, so she bit the bullet, went in.
5:55
Speaker 2: She walked out half an hour later with the exact
5:57
Speaker 2: result she wanted. She got a wash and a cut.
5:59
Speaker 2: The thirty five dollars she walked out with half damp hair,
6:02
Speaker 2: and it wasn't exactly an experience like her usual Sullon provides,
6:06
Speaker 2: but she was willing to forego her head massage, the
6:08
Speaker 2: good chat, and complimentary coffee for the sake of a
6:11
Speaker 2: bargain and great service.
6:12
Speaker 3: I rate that, although I feel like I really need
6:15
Speaker 3: to hold back on this one because I recently found
6:17
Speaker 3: out that my hairdresser listens to my podcast No and
6:21
Speaker 3: I don't know if you guys have listened to season one.
6:23
Speaker 3: That literally season one, episode one. I tell everybody that
6:26
Speaker 3: I did a box die, but I hadn't admitted that
6:29
Speaker 3: to my hairdresser, and she brought it up last time.
6:31
Speaker 3: I was that the hairdresser and she was like, I'm
6:33
Speaker 3: onto you. So this is probably not a great time
6:36
Speaker 3: to let her know that I've been giving myself a
6:38
Speaker 3: true in safety seasons. But let's move on. How about
6:41
Speaker 3: right along?
6:42
Speaker 2: Okay, crew, Now it is time for the main part
6:45
Speaker 2: of the show, Insurance. Now, Initially, when we thought to
6:48
Speaker 2: chat about this topic, I worried it would be bland.
6:50
Speaker 3: I'll admit it.
6:53
Speaker 2: Now, having done a little bit of research, I confirm
6:56
Speaker 2: this topic is at the very least moderately interesting. Well,
6:59
Speaker 2: I'm down there are so many insurances out there, from
7:03
Speaker 2: health and cut to income and life insurances. Victoria, can
7:06
Speaker 2: you please kick us off with a little chat about
7:08
Speaker 2: what insurances actually are and which ones are out there
7:11
Speaker 2: that we need to be considering.
7:12
Speaker 3: Okay, so let's start this chat off by really defining
7:16
Speaker 3: what we're going to talk about here. So, as you mentioned,
7:18
Speaker 3: there are so many insurances out there, from car insurance
7:22
Speaker 3: to life insurance and then back to your Apple watch insurance,
7:25
Speaker 3: like if you can name it, you can insure it
7:28
Speaker 3: pretty much these days. So I think it's important to
7:31
Speaker 3: just frame this conversation and say, I'm talking about personal
7:34
Speaker 3: insurances that I talk about with my clients every day. So,
7:38
Speaker 3: as you mentioned at the start of this show, even
7:40
Speaker 3: though you didn't really know what you were talking about,
7:42
Speaker 3: which was impressive, you said TBD and then like a
7:44
Speaker 3: side glance, I don't know what we are talking about
7:47
Speaker 3: income protection, We are talking about total and permanent disability insurance,
7:51
Speaker 3: we are talking about trauma insurance, and we're also talking
7:54
Speaker 3: about life insurance. So we're going to cover those four
7:57
Speaker 3: things this week because those are the things that you
8:00
Speaker 3: you need to put in place, that you need to
8:02
Speaker 3: be aware of to make sure that you can sustain
8:05
Speaker 3: your lifestyle should something happen to you, regardless of what
8:08
Speaker 3: that is. So if we're going to start talking about
8:09
Speaker 3: personal insurances, I think we need to start with the
8:11
Speaker 3: definition and say, what on earth is personal insurance? So
8:15
Speaker 3: personal insurance is a type of cover, and there are
8:19
Speaker 3: a number of different styles that we're going to talk about.
8:21
Speaker 3: It's a type of cover that provides financial security to
8:24
Speaker 3: you and your family in the event of serious injury
8:27
Speaker 3: or illness, or loss of ability to earn money, or
8:30
Speaker 3: the total and permanent disability of you, or even death.
8:33
Speaker 3: So it covers a very very large range of things
8:37
Speaker 3: and we can talk about them. But people often get
8:39
Speaker 3: personal insurances to make sure that they are able to
8:42
Speaker 3: maintain their lifestyle with the financial support that they need
8:45
Speaker 3: to still achieve their financial lifestyle goals, but also their
8:49
Speaker 3: bigger savings goals and to cover any outstanding debts and
8:52
Speaker 3: the everyday expenses that they would have. So when we
8:55
Speaker 3: start talking about these things, I find it really interesting
8:58
Speaker 3: because so many people don't have the right insurances or
9:02
Speaker 3: don't seem to make it a priority for them. And
9:05
Speaker 3: I don't know why guilty exactly, but it's one of
9:09
Speaker 3: those things where Australia is actually the most underinsured country
9:13
Speaker 3: in the world, given we are a first world nation,
9:16
Speaker 3: it is something that we are actually severely lacking and
9:19
Speaker 3: need more education in. And you look at other countries
9:22
Speaker 3: around the world where you know, you look at South
9:24
Speaker 3: Africa and I'm pretty sure the statistic is that eighty
9:27
Speaker 3: percent of their population have income protection, whereas not even
9:31
Speaker 3: half of the Australian population can say that they have that,
9:34
Speaker 3: and if they do, most of them have it as
9:37
Speaker 3: a default in their superannuation, which has a whole other
9:40
Speaker 3: bag of issues associated with it if you don't know
9:43
Speaker 3: what you're looking out.
9:44
Speaker 2: For, Okay, So, which insurances are integral, which ones can
9:49
Speaker 2: we live without? And which ones do we need or
9:51
Speaker 2: I'm kind of getting the sense that we might need
9:53
Speaker 2: all of them right.
9:55
Speaker 3: So complex, and I think it's a really interesting question,
9:58
Speaker 3: and one I can't legally answer for you on the
10:01
Speaker 3: podcast because that would constitute personal advice, which I clearly
10:04
Speaker 3: wouldn't give you. But it's one of those things where
10:07
Speaker 3: it actually depends on the life stage that you are at,
10:09
Speaker 3: depending on what insurances you uptake.
10:12
Speaker 2: So ge you are young, you are wild, I have
10:15
Speaker 2: no dependence.
10:16
Speaker 3: No, you don't have any dependence that you're aware of,
10:18
Speaker 3: and you also don't have any massive debts that I'm
10:21
Speaker 3: aware of. Now as you're now self elected financial advisor,
10:24
Speaker 3: when we start talking about you know which ones we need.
10:27
Speaker 3: If you are young and wild and free, you probably
10:30
Speaker 3: don't need all of that much insurance. We do need
10:33
Speaker 3: to start talking about what insurances you need to have
10:36
Speaker 3: in place as well, because things like exclusions start coming
10:39
Speaker 3: into the conversation where you know, you might get a
10:42
Speaker 3: little bit older and you twist you back at work
10:44
Speaker 3: and throw it out and you know accidentally slip a disc.
10:47
Speaker 3: In that case, an insurer is probably not going to
10:50
Speaker 3: want to ensure your back because it will be excluded
10:53
Speaker 3: from the cover. So often we're talking to clients about
10:56
Speaker 3: making sure that they get insurance as young while they
10:59
Speaker 3: are healthy and fit and don't have any things on
11:02
Speaker 3: their medical history that could be a massive exclusion. So
11:05
Speaker 3: when we talk about that, then you move into a
11:08
Speaker 3: different stage of life. Gene, say you've saved up and
11:11
Speaker 3: you have bought your first home, you are now in
11:13
Speaker 3: a lot of debt that if you unfortunately, and let's
11:17
Speaker 3: talk about yesterday, because I never like to talk about
11:19
Speaker 3: personal insurances happening tomorrow. So if something happened to you yesterday,
11:24
Speaker 3: your parents or your next of kin would be lumped
11:27
Speaker 3: with that debt. So life insurance is often about extinguishing
11:31
Speaker 3: that debt and making sure that the people that you
11:33
Speaker 3: are leaving behind are set up for the success that
11:36
Speaker 3: they need from you. And while you're young and don't
11:38
Speaker 3: have dependence, it's often just about extinguishing debt. If we
11:42
Speaker 3: then move forward into our lives again, we get to
11:45
Speaker 3: a stage where we have, you know, a couple of dependence.
11:48
Speaker 3: We have a mortgage, maybe you've looked at an investment
11:50
Speaker 3: property and things are getting a little bit wild financially.
11:53
Speaker 3: If you're in that position, then we do need to
11:56
Speaker 3: look at more comprehensive insurances and look at having a
11:59
Speaker 3: fulle of things, but also increasing those levels of insurance.
12:03
Speaker 3: So say you bought your first home g for six
12:05
Speaker 3: hundred thousand dollars, maybe that's what your life insurance could
12:09
Speaker 3: potentially have been at because you are in a position
12:12
Speaker 3: where that's the only debt that needs to be extinguished,
12:14
Speaker 3: But your life insurance is going to jump significantly once
12:17
Speaker 3: you need to be looking after a couple of kids,
12:19
Speaker 3: a dog, your wife, and then also extinguishing debt on properties.
12:24
Speaker 3: And then that comes back to personal values again because
12:27
Speaker 3: I don't know what you want to leave behind. I
12:29
Speaker 3: don't know what legacy you're planning on leaving. And that's
12:32
Speaker 3: where having a really good chat with a financial advisor
12:35
Speaker 3: that can help understand your situation comes into play, because
12:38
Speaker 3: they can go all right, well, what does this actually
12:40
Speaker 3: look like? Because there are so many variables that you
12:43
Speaker 3: need to take into place, so it is really complex
12:45
Speaker 3: and I know a lot of people that are listening
12:46
Speaker 3: are going to go, oh my gosh, Victoria, this is
12:48
Speaker 3: so not valid for me, But it totally is because
12:51
Speaker 3: once you reached that point in your life, I would
12:54
Speaker 3: love you to already know the things that you need
12:56
Speaker 3: to be looking out for.
12:57
Speaker 2: So, Victoria, you mentioned income protection was your FAE sounds
13:00
Speaker 2: ribboning to me.
13:01
Speaker 3: It's wild watch out.
13:03
Speaker 2: Can you please tell us a little bit more about them?
13:05
Speaker 3: So income protection is quite straightforward. It protects your income.
13:11
Speaker 3: I know, wild it would have thought, given the relative
13:14
Speaker 3: importance of your income, you actually want to know that
13:16
Speaker 3: if you ever need to make a claim, you will
13:18
Speaker 3: actually get paid out. So Gee, you mentioned to me
13:21
Speaker 3: before in passing on the pod that you had car insurance,
13:24
Speaker 3: but you weren't sure what your personal insurances were. Is
13:27
Speaker 3: that correct? Yeah, So what you're telling me is you've
13:29
Speaker 3: insured your car, which does not produce any income for you. Yeah.
13:34
Speaker 3: If it broke down, you would then use your income
13:37
Speaker 3: to purchase a new one or fix it. Right, Okay,
13:39
Speaker 3: Well what happens if you're no longer able to produce income?
13:43
Speaker 3: Is your income going to buy you in your car?
13:44
Speaker 3: Is it going to fix your broken car?
13:46
Speaker 2: No, I'll be poor and I won't have an income.
13:48
Speaker 3: No whoe with me. But I think it's really important
13:50
Speaker 3: to just go all right. So we place so much
13:52
Speaker 3: value on insuring our cars, ensuring our engagement rings, insuring
13:57
Speaker 3: our houses, ensuring so much stuff. No one is placing
14:01
Speaker 3: a priority on ensuring their income, which is actually the
14:04
Speaker 3: thing that helps us sustain our lifestyle. There's a lot
14:08
Speaker 3: of hearsay about you know, what's good about income protection
14:11
Speaker 3: and what's bad about income protection. Often there is a
14:14
Speaker 3: little bit of trouble when your income protection is sitting
14:17
Speaker 3: inside your superannuation, as the policy definitions are not as
14:22
Speaker 3: broad and not as inclusive In comparison to outside of
14:26
Speaker 3: superanuation claims. And when I talk about that, what I'm
14:30
Speaker 3: talking about is when I say inside superannuation, it means
14:33
Speaker 3: that that policy is owned by your super fund and
14:36
Speaker 3: the policy is paid for by the money you contribute
14:40
Speaker 3: to super, so it doesn't impact your weekly cash flow
14:43
Speaker 3: right right, And outside of superranuation is a policy that
14:47
Speaker 3: you personally go and establish and you pay for out
14:50
Speaker 3: of your income that comes into your bank account each
14:53
Speaker 3: and every single month.
14:54
Speaker 2: Dumb question.
14:55
Speaker 3: Can you have both? You can have both, and sometimes
14:58
Speaker 3: people mix it so sometimes will have some of their
15:01
Speaker 3: policy inside super some of their policy outside Super. I personally,
15:05
Speaker 3: and I feel like this is going to be a
15:06
Speaker 3: really good way of explaining it is to just be
15:08
Speaker 3: really honest and open about the insurances that I have.
15:11
Speaker 3: And I have all four of these insurances because I'm
15:14
Speaker 3: a financial advisor and I really really see the value
15:16
Speaker 3: in it. But I have all four. But I hold
15:19
Speaker 3: my life and TPD insurance inside superannuation, and I hold
15:23
Speaker 3: my income protection and my trauma insurance outside of superanuation.
15:28
Speaker 3: But we can go through that. So when I talk
15:30
Speaker 3: about income protection, it's really important to make sure that
15:34
Speaker 3: we understand the policy that we are signing up for.
15:38
Speaker 3: So there are a couple of things that I want
15:39
Speaker 3: people to take into consideration, and they are features that
15:43
Speaker 3: you can often only get outside of superanuation. And these
15:47
Speaker 3: are why I am, I guess so passionate about it,
15:49
Speaker 3: but also have it personally outside of superanuation. Is I
15:53
Speaker 3: can guarantee my income with income protection outside of super
15:57
Speaker 3: So I can sit down with a financial advisor and
16:00
Speaker 3: prove to them my income by providing my tax return,
16:03
Speaker 3: give that to the insurance company, and they go, no problems, Victoria,
16:07
Speaker 3: you earn x amount in that year, so if you
16:10
Speaker 3: ever need to make a claim, we're not going to
16:12
Speaker 3: make you prove your income. Too often do I see
16:14
Speaker 3: instances where people go to claim income protection and they
16:18
Speaker 3: think that they are really well covered because they go, Hey, Victoria,
16:21
Speaker 3: I own sixty thousand dollars a year, but I'm paying
16:23
Speaker 3: for one hundred thousand dollars income protection policy, so I
16:26
Speaker 3: am fine. But when it comes to point of claim,
16:29
Speaker 3: that insurance company says, Okay, no problems, could you please
16:32
Speaker 3: prove your income and they will only pay up to
16:34
Speaker 3: seventy five percent of your actual income, not of the
16:38
Speaker 3: policy you've been paying for, so that's really important. If
16:43
Speaker 3: you're guaranteeing income on income protection, though, you are also
16:46
Speaker 3: able to lock it in. So if you are proving
16:50
Speaker 3: with your tax return your income, but then you go
16:53
Speaker 3: to a lower paying job, more a part time paying job,
16:56
Speaker 3: you're actually still in most cases you'd need to check
16:59
Speaker 3: a PDS disclosure statement, you are actually still able to
17:03
Speaker 3: claim on the highest level that you financially endorsed. So
17:06
Speaker 3: I think that's a pretty good feature, especially because I'm
17:08
Speaker 3: talking to a group of women who often will go
17:11
Speaker 3: through different life stages and take different roles, and it's
17:14
Speaker 3: often a priority, or is a priority for me to
17:17
Speaker 3: lock in my income at the highest possible point and
17:20
Speaker 3: have it completely financially underwritten so that it can never
17:23
Speaker 3: be questioned again, even if I go and start working
17:26
Speaker 3: for a job that pays me a quarter of my income.
17:29
Speaker 3: The second is medical history, and for me, having my
17:32
Speaker 3: medical history and any exclusions outlined upfront is essential. I
17:37
Speaker 3: don't want to get stung with, you know, going through
17:40
Speaker 3: probably one of the most traumatic periods in my life
17:42
Speaker 3: should this happen, and then find out that because it's
17:46
Speaker 3: a gene in my parents' lineage, I'm not covered for it.
17:50
Speaker 3: And I've seen that before where I've had not clients,
17:53
Speaker 3: but I have heard stories and met people where they
17:56
Speaker 3: have unfortunately been diagnosed with breast cancer and said that's
18:00
Speaker 3: it's okay, I'm going to go and claim on my insurance.
18:03
Speaker 3: And when they go to do that, their insurance is sorry,
18:05
Speaker 3: but that's a her editory thing for you. We're not
18:07
Speaker 3: going to be covering really yeah, which is heartbreaking. And
18:11
Speaker 3: I think that that's the issue here, and this is
18:13
Speaker 3: where a lot of insurance companies get painted in really
18:16
Speaker 3: bad lights. They're actually just following their product disclosure statements
18:20
Speaker 3: and the terms and conditions that were agreed upon by
18:22
Speaker 3: the person to take that. You're the insurance exactly, and
18:25
Speaker 3: you agreed to it, but we didn't put enough thought
18:28
Speaker 3: and time and effort into really truly understanding what that
18:31
Speaker 3: actually means. And every single product is different, like there
18:34
Speaker 3: is no one size fits all. It's not like I
18:36
Speaker 3: can put my hand up and say, hey, go and
18:38
Speaker 3: get the insurance that I have because that doesn't actually
18:41
Speaker 3: fit everybody and it doesn't make a lot of sense
18:44
Speaker 3: for a lot of people. So for me, it's about
18:47
Speaker 3: making sure that you understand your income, and your insurance
18:51
Speaker 3: company understands your income, and they also understand your medical history,
18:55
Speaker 3: and you have disclosed everything you need to disclose so
18:58
Speaker 3: that there are no surprises the time you need to claim.
19:01
Speaker 3: Because at the end of the day, if you are
19:03
Speaker 3: in a situation where you need to claim on insurance,
19:05
Speaker 3: you're not having a very good time, and this insurance
19:08
Speaker 3: should actually make your life easier, not give you more
19:10
Speaker 3: hurdles to jump over. So would you.
19:12
Speaker 2: Say that someone at the start of their career making
19:16
Speaker 2: a pretty low income would actually need to consider income insurance.
19:20
Speaker 3: In my personal opinion, absolutely yes. I think the earlier
19:24
Speaker 3: the better. At the end of the day, this is
19:26
Speaker 3: actually an investment in you, Like, we spend so much
19:29
Speaker 3: money on things that one we don't need, but then
19:32
Speaker 3: two that we think are protecting us. I'll jump up
19:34
Speaker 3: and down again about the car insurance versus the income
19:38
Speaker 3: protection comparison I made before and for me, if you said, Victoria,
19:42
Speaker 3: if you had to get rid of every single one
19:44
Speaker 3: of your insurances, including car insurance, health insurance, on my
19:47
Speaker 3: phone insurance, what would you keep. I would keep income
19:51
Speaker 3: protection any day of the week, So you'd go that
19:53
Speaker 3: I would go that above and beyond any other type
19:56
Speaker 3: of insurance because protecting my income to me is of
19:59
Speaker 3: very very large priority because for me, if my income
20:03
Speaker 3: is protected, it means that I can still achieve the
20:05
Speaker 3: things that I've been planning my whole life. So like
20:08
Speaker 3: right now, I'm twenty eight and I'm making some pretty
20:10
Speaker 3: big plans. You know, I'm probably going to purchase a
20:13
Speaker 3: family home at some point, I'm probably going to have children.
20:15
Speaker 3: At some point, I'm probably going to, you know, want
20:17
Speaker 3: to go on trips overseas. And for me, I think
20:20
Speaker 3: that ensuring the ability to still achieve all of those
20:24
Speaker 3: financial goals, whether or not I have the capacity to work,
20:27
Speaker 3: is essential. Like if I ride off a car, I'm
20:29
Speaker 3: not saying get rid of your car insurance and take
20:32
Speaker 3: this insurance up, But I just really want to highlight
20:34
Speaker 3: the importance to me of income protection, and that is
20:38
Speaker 3: I can buy another car with the income I'm creating
20:40
Speaker 3: each and every single month if I can guarantee it's
20:42
Speaker 3: still coming in. In terms of cost, it isn't prohibitive.
20:46
Speaker 3: I believe that there is a really negative stigma in
20:49
Speaker 3: society about how much it costs to get income protection.
20:53
Speaker 3: But at scales based on how old you are and
20:56
Speaker 3: what income you're making. So if you're really young and
20:58
Speaker 3: not making much money. So an example that I just
21:01
Speaker 3: pulled from the Canstar dot com dot au website for
21:05
Speaker 3: a twenty seven year old non smoker female, a monthly
21:10
Speaker 3: benefit paid out of thirty one hundred and twenty five dollars.
21:14
Speaker 3: For an accountant. There's a couple of examples here, but
21:16
Speaker 3: for an accountant is about fifty dollars a month in
21:19
Speaker 3: income protection. That's so that's what I'm not saying that
21:22
Speaker 3: that's exactly what it'll cost you personally, but it's a
21:24
Speaker 3: good example. And something to also take into consideration about
21:29
Speaker 3: income protection is it's tax deductible. So that sounds a
21:32
Speaker 3: little bit sexy. That's a little bit of my interest. Yeah, okay,
21:37
Speaker 3: just tax deductible. But when things are tax deductible, it
21:41
Speaker 3: means that you pay tax on it. So if you
21:43
Speaker 3: are making that three thousand dollars premium and that's being
21:46
Speaker 3: paid to you, you still have to pay tax on it.
21:49
Speaker 3: And I think that that's worthy of pointing out because
21:51
Speaker 3: there are some insurances like trauma insurance that you do
21:55
Speaker 3: not pay tax on. But the reason you do not
21:57
Speaker 3: pay tax on trauma insurance is because you actually receive
22:01
Speaker 3: the full benefit payout instead of you know, getting one
22:03
Speaker 3: hundred thousand dollars and then having to pay most of
22:06
Speaker 3: it back in tax. Does that make sense? It does,
22:08
Speaker 3: so no cost isn't prohibitive, But it also depends on
22:12
Speaker 3: whether you're going down the retail pathway or you're going
22:15
Speaker 3: to see a financial advisor. A financial advisor has access
22:19
Speaker 3: to often cheaper and more complex, slash better products than
22:24
Speaker 3: retail because you just don't want an off the shelf
22:27
Speaker 3: income protection policy, like they do not cover you for
22:30
Speaker 3: the things that you need to be covered for, but
22:32
Speaker 3: they will still charge you through the nose for the
22:35
Speaker 3: grace of having that policy. So I think it's really
22:38
Speaker 3: important that if you're on an insurance comparison website and
22:41
Speaker 3: picking which income protection policy you need, you're probably in
22:44
Speaker 3: the wrong place, and in all honesty, have a chat
22:47
Speaker 3: to a financial advisor about this. And if you are
22:50
Speaker 3: only talking to a financial advisor about setting up insurances,
22:54
Speaker 3: it shouldn't be too expensive.
22:56
Speaker 2: You just touched on trauma insurance, Victoria, I did. Can
23:00
Speaker 2: you tell me a little bit more about that?
23:02
Speaker 3: I can trauma insurance is a standalone insurance policy that
23:08
Speaker 3: more often than not, you hold personally. This isn't one
23:12
Speaker 3: that is commonly found sitting inside your superannuation. Trauma insurance cover,
23:16
Speaker 3: or sometimes it's called critical illness insurance, provides alumpu payout
23:21
Speaker 3: to cover immediate medical expenses or other financial needs when
23:25
Speaker 3: a critical illness or an injury occurs. So that could
23:27
Speaker 3: be anything from experiencing a heart attack or stroke to
23:31
Speaker 3: being hit by a bus, various types of cancers, etc.
23:34
Speaker 3: So it is a really traumatic period in your life
23:37
Speaker 3: that you experience, but that's why we have trauma cover.
23:40
Speaker 3: So trauma pays an agreed amount of cover to you
23:43
Speaker 3: for many different things. And as I mentioned before, like
23:46
Speaker 3: the list is lessen it totally depends on which type
23:49
Speaker 3: of policy or which company you go through, because their
23:51
Speaker 3: pds will outline the things you are and aren't covered for.
23:55
Speaker 3: And it's very very important that if you're going to
23:57
Speaker 3: get an insurance you understand the breadth of cover as
24:01
Speaker 3: opposed to just going oh, well, I went with this
24:03
Speaker 3: insurance company because I liked their branding and marketing better.
24:06
Speaker 3: It's really important to get into the needy gritty of
24:08
Speaker 3: it because sometimes they'll exclude different parts of certain illnesses.
24:13
Speaker 3: So I know that for breast cancer or recently I've
24:16
Speaker 3: been looking into this for a client. Only some forms
24:19
Speaker 3: of breast cancer are covered, really, but more, more traumatic
24:23
Speaker 3: and more serious versions of breast cancer were not. And
24:26
Speaker 3: then genetic breast cancer wasn't covered, but standalone breast cancer was.
24:30
Speaker 3: So it's one of those things where you really need
24:32
Speaker 3: to understand the policy instead of just going, Okay, well
24:36
Speaker 3: i've got trauma, that's fantastic. So a serious illness or
24:39
Speaker 3: injury causes much more than just the physical issues. So
24:43
Speaker 3: you know, let's say that you were riding your bike
24:45
Speaker 3: to work and unfortunately you yesterday got hit by a bus.
24:49
Speaker 3: It's so much more than just physical and emotional turmoil.
24:54
Speaker 3: It has the potential to cause massive disruption to your
24:57
Speaker 3: income and to your lifestyle. And while income protection is
25:00
Speaker 3: going to help replace a portion of your income, and
25:03
Speaker 3: that is usually up to seventy five percent of your income,
25:06
Speaker 3: that is stands across the board. When you can't work
25:08
Speaker 3: due to illness or injury, it's useful to have a
25:11
Speaker 3: lump sum of money that can cover your medical needs
25:13
Speaker 3: and financial needs because often those are above and beyond
25:18
Speaker 3: what private health insurance covers for. So, say you need
25:21
Speaker 3: specialist plastic surgery, this is going to help you pay
25:24
Speaker 3: for all of those out of pocket expenses. It's going
25:26
Speaker 3: to help you pay for the travel and for all
25:29
Speaker 3: of the things that you need to get back to
25:31
Speaker 3: being your best self. This is where trauma insurance just
25:34
Speaker 3: comes to the party, so you can get on with
25:36
Speaker 3: recovering and get on with your life without having to
25:38
Speaker 3: worry too much about your finances. It's one of those
25:41
Speaker 3: things that a lot of people have, and it is
25:44
Speaker 3: actually a more expensive insurance. So if we compare them
25:47
Speaker 3: all for the levels of cover, trauma insurance is a
25:50
Speaker 3: little bit more expensive. And the reason for that is
25:53
Speaker 3: it's claimed on often, so it's not something that people
25:57
Speaker 3: have and don't use. It is something that does get used.
26:00
Speaker 3: And when insurance companies price insurance policies, they price that
26:05
Speaker 3: based on a heap of things, but the biggest thing
26:07
Speaker 3: they price on is a risk. So the more at
26:10
Speaker 3: risk you are, depending on your job or dexending on
26:13
Speaker 3: your lifestyle or your age or your lifestyle habits, the
26:16
Speaker 3: higher your policy is going to be priced at. So
26:20
Speaker 3: it's important to understand what isn't isn't covered, but then
26:23
Speaker 3: what it's going to cost you. And often my clients
26:26
Speaker 3: who do have family histories of significant and very serious illnesses,
26:32
Speaker 3: they want to be covered with trauma because it's kind
26:34
Speaker 3: of like, well, actually, I can pretty much guarantee at
26:37
Speaker 3: some point I'm going, yeah, I'm going to be hit
26:40
Speaker 3: with this situation, and I want to make sure that
26:42
Speaker 3: when that happens, I'm in the best possible position and
26:45
Speaker 3: I don't miss a beat financially.
26:47
Speaker 2: Also, Victoria, I work in TV and in a variety
26:51
Speaker 2: you do.
26:52
Speaker 3: Thanks so much exciting trauma insurance. So we're just going
26:54
Speaker 3: to go completely to talk about as a twenty five
27:00
Speaker 3: year old who works a relatively pushy office job, I.
27:04
Speaker 2: Guess yes, girl, How does that compare to someone who
27:07
Speaker 2: works in say, construction of somewhere where there's a lot
27:10
Speaker 2: higher risk of injury? What do we need to be
27:13
Speaker 2: considering that? Do I still need.
27:14
Speaker 3: It's all taken into consideration. So it's one of those
27:17
Speaker 3: things where you actually need to have a nitty gritty
27:20
Speaker 3: conversation with a financial advisor to make sure that one
27:22
Speaker 3: you can be covered because there are some industries that
27:25
Speaker 3: aren't covered. So I have a new client. She is brilliant,
27:28
Speaker 3: she is an air traffic controller.
27:30
Speaker 4: Cool.
27:30
Speaker 3: Well, we can't get some insurances for her because of
27:33
Speaker 3: the risks associated with her job, and so we've had
27:35
Speaker 3: to sit down and explain those things because it's often
27:39
Speaker 3: a very complex situation or where are my client sits
27:43
Speaker 3: down and goes But I could just go buy this
27:45
Speaker 3: policy off the shelf. Yeah, well, actually you'd be paying
27:47
Speaker 3: for a policy that you could never trigger and just
27:50
Speaker 3: understanding what that means, and as her financial advisor, making
27:54
Speaker 3: sure that I am essentially overcompensating in some other areas
27:58
Speaker 3: because there are some things that she can't actually set
28:00
Speaker 3: up for herself, so it's important to work out what
28:04
Speaker 3: that means. But yes, if you are in a job
28:07
Speaker 3: that has more risk associated with it, you are going
28:10
Speaker 3: to either have increased premiums or you are maybe not
28:14
Speaker 3: going to get some cover for some spaces that you
28:16
Speaker 3: might have wanted cover before. And that actually leads really
28:19
Speaker 3: well into a chat about Total and Permanent disability insurance
28:23
Speaker 3: PPD insurance. Yes, girl, you were calling it, what was
28:26
Speaker 3: it before? You're calling it TPG internet? Yeah, apparently an
28:30
Speaker 3: internet provider. But you can use the internet to find
28:33
Speaker 3: a financial advisor, so now sure if that's bad advice anyway.
28:37
Speaker 3: Total and permanent disability insurance cover a lot of you
28:40
Speaker 3: might already have it inside of supernuation. And if you
28:42
Speaker 3: are listening to this podcast and you're like, what are
28:45
Speaker 3: you talking about, Victoria, I don't have insurances inside my
28:48
Speaker 3: super check, make sure that they are not there. This
28:51
Speaker 3: is something that I jump up and down about all
28:53
Speaker 3: the time, because your insurances inside superannuation they're kind of special,
28:59
Speaker 3: like they are insurance is that whilst I often don't
29:02
Speaker 3: love the policies and I don't love a lot of
29:04
Speaker 3: the terms and conditions associated with them, often they were
29:08
Speaker 3: established really early on, which means you don't have any
29:11
Speaker 3: exclusions associated with them. So if you've gotten older and
29:14
Speaker 3: something has happened to you, or you've found something out
29:17
Speaker 3: about yourself medically, these insurances often make sure that you're
29:21
Speaker 3: covered for those things, and a financial advisor will help
29:24
Speaker 3: sit you down and explain why we might keep some
29:27
Speaker 3: of that insurance and top it up in another area
29:30
Speaker 3: with a different policy to make sure that you're always
29:32
Speaker 3: covered for the things that you need to be covered for.
29:35
Speaker 3: And for me, this is vital that you don't just
29:38
Speaker 3: go in and roll your superannuations together into one fund
29:41
Speaker 3: and go cool. Well I did my superme in one fund.
29:43
Speaker 3: But you've actually missed a whole heap of opportunities to
29:46
Speaker 3: ensure that you have the right insurances in place for you.
29:49
Speaker 2: Cool story, Victoria. But you were meant to be telling
29:51
Speaker 2: me about TPD.
29:52
Speaker 3: Excuse me back to the point. No, that is true.
29:56
Speaker 3: I get a little bit randy when we.
29:57
Speaker 2: Talked to you your passions and I'm loving it.
29:59
Speaker 3: Yeah, raising my hands about my head and like very animated. Yeah. Okay, anyway,
30:04
Speaker 3: TVV all right, to those playing along home, total and
30:06
Speaker 3: permanent disability insurance cover it pays you a lump some
30:10
Speaker 3: if you become totally and permanently disabled. So the definition
30:14
Speaker 3: of total and permanent disability actually really varies between insurance companies,
30:18
Speaker 3: so it can mean one thing to one person and
30:20
Speaker 3: a completely separate thing to someone else. So again I'm
30:23
Speaker 3: harping on this, but understand your pds. Understand the definitions
30:27
Speaker 3: that your insurer puts in front of you. It can
30:30
Speaker 3: mean that you are disabled to the extent that you
30:32
Speaker 3: probably will be unable to work ever again in your
30:35
Speaker 3: occupational job, or it could mean something a little bit
30:38
Speaker 3: lighter than that, but again, please look into making sure
30:41
Speaker 3: that you understand what you are covered for and what
30:45
Speaker 3: you are not. So TBD is an insurance that I
30:47
Speaker 3: often talk to my clients about to make sure that
30:50
Speaker 3: you have enough money to continue life. So, as I said,
30:53
Speaker 3: income protection is something that will help replace a portion
30:56
Speaker 3: of your income when you're unable to work due to sickness, injury,
30:59
Speaker 3: or illness. But if you are permanently disabled and unable
31:04
Speaker 3: to ever return to work again, it's also really useful
31:07
Speaker 3: to have a large lump of money that covers your
31:09
Speaker 3: immediate medical needs but also makes sure that you're clearing
31:13
Speaker 3: any outstanding debts or the mortgage that you have, or
31:16
Speaker 3: help set up, you know, any changes that you need
31:19
Speaker 3: to make to your house. So say something happens and
31:21
Speaker 3: you are seriously disabled, or you're probably going to need
31:25
Speaker 3: to make some pretty serious modifications to your house. Maybe
31:27
Speaker 3: you need to ramp at the front to help the
31:29
Speaker 3: wheelchair cut up, Maybe you need modifications to your bathroom,
31:31
Speaker 3: and that's it's really expensive. And I never want any
31:36
Speaker 3: of my clients, or you know, want any of my
31:37
Speaker 3: community to be on the back foot when it comes
31:40
Speaker 3: to that. So as much as I jump up and
31:42
Speaker 3: down about having income protection, having other insurances in place
31:46
Speaker 3: to make sure that you're able to make the most
31:48
Speaker 3: of that income is really really important. So TBD really
31:53
Speaker 3: hard to calculate how much cover you need. The appropriate
31:56
Speaker 3: amount of cover again depends on your family situation, life
32:00
Speaker 3: stage that you are in. It's one of those things
32:02
Speaker 3: that is really flexible. As you're going through a period
32:05
Speaker 3: in your life where you have dependence and a mortgage,
32:07
Speaker 3: you need a lot more. And when you get out
32:09
Speaker 3: of that life stage, you've paid off the mortgage, the
32:11
Speaker 3: kids have gone and they've set up their own homes,
32:14
Speaker 3: and you're probably in a position, hopefully, you know, in
32:16
Speaker 3: thirty years, when you've been listening to the Cheese on
32:18
Speaker 3: the Money podcast for a really long time, you're in
32:21
Speaker 3: a really financially independent position. You're going to need a
32:24
Speaker 3: lot less because you become what's called self insured, and
32:27
Speaker 3: that's where you have enough money in investments that are
32:30
Speaker 3: producing income, so you don't actually need insurances because you're
32:33
Speaker 3: able to self sustain. But that's pretty cool. That's like
32:36
Speaker 3: my ultimate goal, yep, for those playing along at home.
32:39
Speaker 3: But TBD primarily exists to make sure that any of
32:43
Speaker 3: your immediate medical needs that you have and getting rid
32:45
Speaker 3: of debt. So it's one of those things that it's important.
32:48
Speaker 3: But keep in mind that there's so much more to
32:51
Speaker 3: disability than just medical need.
32:56
Speaker 1: Hi.
32:56
Speaker 2: There, you've breached the shoes on the money mailbox. Do
32:59
Speaker 2: you have a money problem you want to help solving.
33:01
Speaker 2: Do you have a money to learn me you just
33:02
Speaker 2: want to chat about? Victoria is here to help. Every
33:05
Speaker 2: week we'll be playing your questions to help make sense
33:08
Speaker 2: of a money mess you may have found yourself in.
33:10
Speaker 2: Make a quick recording on your phone and send it
33:12
Speaker 2: through to podcast at chooesothemoney dot com dot au and
33:15
Speaker 2: you might find yourself on the show. But for now,
33:17
Speaker 2: here's today's listener question.
33:19
Speaker 4: Hi guys, my name's Chloe and I'm currently in the
33:22
Speaker 4: process of reorganizing my finances. One element I'm having some
33:26
Speaker 4: trouble with is insurance. I'm twenty seven with no dependents
33:31
Speaker 4: and I currently have private health insurance, but I'm getting
33:34
Speaker 4: really confused by all of the insurance options. If I
33:37
Speaker 4: set up all of my personal insurances properly, does that
33:41
Speaker 4: mean I can cancel my private health insurance or do
33:44
Speaker 4: I need to keep it? Thank you.
33:46
Speaker 2: I kind of have the same question too.
33:49
Speaker 3: Actually, well, yeah, I think it's a good question. Though
33:52
Speaker 3: it's something that comes up all the time. It's absolutely
33:54
Speaker 3: something that is warranted to discuss, yep. And I think
33:57
Speaker 3: that it is really important to point out that private
33:59
Speaker 3: health health insurance only covers certain bills related to medical treatment,
34:03
Speaker 3: and it often doesn't cover a lot else. See the
34:07
Speaker 3: standards like dental, Yeah, the standards, and like if you've
34:10
Speaker 3: got really high levels of private health insurance, amazing, but
34:14
Speaker 3: there are still gaps in what's going on. And hospital
34:18
Speaker 3: policies generally cover treatment as a private patient in either
34:21
Speaker 3: a public or a private hospital. And like low key
34:24
Speaker 3: off the side, if you are going to have private
34:26
Speaker 3: health insurance, make sure that you are treated as a
34:28
Speaker 3: private patient in a private hospital. Because I know a
34:31
Speaker 3: couple of people have got stung where they have hospital
34:35
Speaker 3: policies and they have their private health insurance all lined up,
34:38
Speaker 3: but it's so that they get treated as a private
34:40
Speaker 3: patient in a public hospital. And if you're going to
34:43
Speaker 3: be paying for private health insurance, I'm assuming that you
34:46
Speaker 3: just thought that meant you could go to a private hospital.
34:48
Speaker 3: When in actual fact that's not the case, and it's
34:50
Speaker 3: definitely something that she probably needs to look into as well,
34:53
Speaker 3: assuming she's not going to cancel her private health insurance.
34:56
Speaker 3: If you have an extras policy that might cover you
34:59
Speaker 3: for things that go and beyond like optical and dental
35:01
Speaker 3: and other treatment for non medical or allied health services,
35:05
Speaker 3: but private health insurance isn't going to pay you for
35:09
Speaker 3: any loss of income you sustain while you're in hospital
35:12
Speaker 3: or recovering, or if you've broken your leg and you
35:14
Speaker 3: can't go to work for a while like that often
35:17
Speaker 3: impacts people really significantly and financially. And whilst private health
35:22
Speaker 3: insurance means that you're going to have access to the
35:24
Speaker 3: best medical care that we have available in Australia, it
35:28
Speaker 3: doesn't mean that you're not going to get stung for
35:30
Speaker 3: having a private anethetist. It doesn't mean that you're not
35:33
Speaker 3: going to get stung. It's still going to be extra expense, yeah,
35:36
Speaker 3: for you know, a really particular cancer specialist that you
35:40
Speaker 3: know isn't actually covered by the system. So I think
35:43
Speaker 3: it's important that during the time that is probably going
35:46
Speaker 3: to be the most traumatic event in your life, you
35:49
Speaker 3: are actually covering your normal expenses and commitments as well
35:53
Speaker 3: as the private health costs that are going to be there.
35:56
Speaker 3: So unless you have really significant amounts of savings set
35:59
Speaker 3: aside or a really life full of leave entitlements with
36:01
Speaker 3: your employer, this could actually have a pretty devastating impact
36:05
Speaker 3: on your family and your friends if you're then thrown
36:08
Speaker 3: into a position where you don't have an income. So
36:11
Speaker 3: the policies that I was talking about earlier in the
36:13
Speaker 3: pod before the question, it's really good in collaboration with
36:16
Speaker 3: your private health insurance. So it's not something where I say,
36:19
Speaker 3: all right, well you can just get rid of it,
36:21
Speaker 3: and they are absolutely certain. There are absolutely times that
36:25
Speaker 3: I just say to clients, yep, get private health insurance.
36:27
Speaker 3: For example, if they earn over the Medicare threshold, and
36:30
Speaker 3: they earn more than ninety thousand dollars, you probably should
36:33
Speaker 3: have private health insurance because otherwise you're paying the Medicare levy.
36:37
Speaker 3: But then it is definitely down to personal preference, because
36:41
Speaker 3: as we all know, Australia is known as the Lucky country,
36:43
Speaker 3: and our standard of living and our climate and our
36:45
Speaker 3: health care and social systems are so amazing that we
36:49
Speaker 3: are supported. So it literally comes down to what you
36:53
Speaker 3: value as a person. But I also want to touch
36:55
Speaker 3: on something that I love and this is actually by Zurix.
36:58
Speaker 3: So shout out to my friend down at Zurich, Emily,
37:01
Speaker 3: I love you. You're my favorite lovely. But they recently did,
37:05
Speaker 3: and I think it was in twenty eighteen they released this.
37:08
Speaker 3: It was the Zurich Cost of Care white Paper, and
37:11
Speaker 3: that white paper actually outlined the cost of medical care
37:16
Speaker 3: in Australia and insurance claims and was this super in
37:19
Speaker 3: depth white paper. If anyone's interested, they're probably not better,
37:22
Speaker 3: I'll just abound it for a little longer kind of interested.
37:25
Speaker 3: But it essentially outlined how much a cost to be
37:29
Speaker 3: sick in Australia and what covers what and when and
37:32
Speaker 3: where and how, And I absolutely loved it. And it
37:35
Speaker 3: was just one of these things that you know, the
37:38
Speaker 3: facts and figures in that were amazing.
37:40
Speaker 2: Don stick out to Yeah.
37:42
Speaker 3: Yeah, So the cost of burden was estimated at thirty
37:45
Speaker 3: billion dollars in upwards each year and it falls on
37:49
Speaker 3: tax payers for those who don't have cover and those
37:53
Speaker 3: that are ill and incrippitling situations. So it was one
37:57
Speaker 3: of those things where I was like oh, well, actually
37:59
Speaker 3: this is massive, and they actually found that in twenty
38:01
Speaker 3: sixteen and twenty seventeen there were seven hundred and seventy
38:04
Speaker 3: seven thousand hospitalizations due to injury or poisoning, and this
38:09
Speaker 3: year alone, there are going to be one hundred and
38:11
Speaker 3: thirty thousand new diagnosises of cancer. So I guess the
38:15
Speaker 3: key takeaway from this conversation and talking about personal insurances
38:19
Speaker 3: and talking about you know, making this a priority is
38:22
Speaker 3: unsexy as it is, is we all think that this
38:25
Speaker 3: stuff isn't going to happen to us. Absolutely, we all
38:28
Speaker 3: think that this isn't our problem. And I'm healthy and
38:31
Speaker 3: I'm okay. But all too often do I see those
38:34
Speaker 3: people who thought that they were healthy and okay actually
38:37
Speaker 3: have pretty significant health concerns or you know, just run
38:40
Speaker 3: into injury that really knocks them off the bandwagon. And
38:43
Speaker 3: I would never want someone to be in a position
38:45
Speaker 3: like that. So today, guys, we are joined by my
38:51
Speaker 3: good friend Emily Cosennani, who works in the life insurance
38:54
Speaker 3: industry and has done for many, many years. And I
38:57
Speaker 3: thought that I would bring her along today instead of
38:59
Speaker 3: a diary, because I thought she had a whole heap
39:02
Speaker 3: more value to provide you guys with in terms of
39:04
Speaker 3: experiences and examples that we can all learn from. So Emily,
39:08
Speaker 3: thank you for joining us today. And let's just jump
39:12
Speaker 3: straight in. Why don't we tell me a little bit
39:14
Speaker 3: about yourself? What do you do? How do you work
39:17
Speaker 3: in the insurance industry?
39:18
Speaker 4: So?
39:18
Speaker 1: I work in the life insurance industry and work at
39:22
Speaker 1: a life insurance company more specifically, have done for a
39:24
Speaker 1: little while now, but before that, I worked for a
39:27
Speaker 1: financial planner who specialized in giving life insurance advice, and
39:31
Speaker 1: so it's definitely become a passion of mine.
39:33
Speaker 3: As nerdy as that might sound, it's totally not. I
39:36
Speaker 3: love it, Like you come into our office and whiteboard
39:38
Speaker 3: out client scenarios like nobody I've ever seen. So when
39:42
Speaker 3: this topic came up, I was like, Emily has to
39:44
Speaker 3: be involved. So I guess jumping straight in. Obviously this
39:48
Speaker 3: episode is about talking about insurance and to so many
39:51
Speaker 3: young women and women in general, insurance is never the priority.
39:55
Speaker 3: Do you think that that's probably an accurate depiction of
39:58
Speaker 3: what I believe people's value. Yeah, I think you're spot
40:01
Speaker 3: on there.
40:02
Speaker 1: I think anecdotally not that I have a piece of
40:04
Speaker 1: research that I can kind of refer back to. But anecdotally,
40:07
Speaker 1: what you hear is that, yes, less women have any
40:11
Speaker 1: kind of life insurance compared to men, which is quite
40:14
Speaker 1: scary because we're all becoming these really good breadwinners, right,
40:19
Speaker 1: and we're becoming just as important in that family unit,
40:21
Speaker 1: and yet we've got less protection than our male counterparts.
40:26
Speaker 3: Why do you think that is? I just think we're.
40:29
Speaker 1: Undervalued, right, And we undervalue ourselves so much anyway, So
40:33
Speaker 1: it's about this. Yeah, yeah, it's just part of the
40:36
Speaker 1: vicious cycle of thinking, well, what we don't need it,
40:39
Speaker 1: like I'm fine, it's you know, I've got someone else
40:41
Speaker 1: you can take care of me, and that's more important.
40:44
Speaker 1: And you know, we often put people in front of
40:46
Speaker 1: ourselves and I think that is reflected in what we
40:48
Speaker 1: do with life insurance and even just financial planning advice
40:52
Speaker 1: in general.
40:52
Speaker 3: Yeah, I agree. And whilst we don't have solid stats
40:55
Speaker 3: on male versus female getting insurance, you know, I definitely
41:01
Speaker 3: see it in my office as well, where a husband
41:03
Speaker 3: and wife or partners will come in and if the
41:06
Speaker 3: female is a stay at home mum, she would just say, oh,
41:08
Speaker 3: I don't need insurance, like I don't work. I don't
41:11
Speaker 3: generate income, And to me, that's so wildly dangerous because
41:15
Speaker 3: her job is worth so much, and you know, to
41:18
Speaker 3: replace her in that role is going to cost upwards.
41:20
Speaker 3: I think the stats are ninety thousand dollars a year
41:23
Speaker 3: to replace a state home mum. Yeah, so like she
41:25
Speaker 3: often actually needs a little bit more insurance than her
41:27
Speaker 3: partner actually does. It's so scary because you're one hundred
41:30
Speaker 3: percent correct.
41:30
Speaker 1: If you think about what a stay at home mum
41:34
Speaker 1: is doing for her husband to be able to go
41:36
Speaker 1: and work the hours that they work, or travel as
41:39
Speaker 1: much as they do, or whatever it is, and be
41:41
Speaker 1: as passionate as they are about whatever it is they're
41:43
Speaker 1: passionate in. She's given up so much to do that,
41:47
Speaker 1: and so the actual dollar value attached to that seems
41:50
Speaker 1: like it's not anything, but is in reality huge.
41:53
Speaker 3: How is that valued in the industry? How do you
41:56
Speaker 3: measure anything right a piece of string?
42:00
Speaker 1: I mean, even if you're talking about someone who actually
42:03
Speaker 1: works full time, what you come up with is the
42:06
Speaker 1: right amount of cover for that person versus what another
42:09
Speaker 1: financial planner comes up with, they can actually look completely
42:12
Speaker 1: different because it's it's all up to that person and
42:17
Speaker 1: the discussion that's taken place between you and that person
42:20
Speaker 1: to get to that figure in the first place.
42:22
Speaker 3: So that was actually something that I used to jump
42:24
Speaker 3: up and down about when I entered the industry. And
42:27
Speaker 3: I think you've heard this from me before. Actually, Emily,
42:29
Speaker 3: I've called you a number of times. I'm like, cool,
42:31
Speaker 3: so what's the methodology? How do I value this? And
42:34
Speaker 3: You're like, that's not how this works. And I've called
42:37
Speaker 3: so many other insurers to get just an outline of Okay, well,
42:41
Speaker 3: where's the metrics? How do I measure things like what
42:44
Speaker 3: standard practice? And across the industry that doesn't seem to exist.
42:47
Speaker 3: It's more in the hands of advisors to use their
42:50
Speaker 3: initiative and understanding.
42:51
Speaker 1: Of the cost of life to val the values of
42:54
Speaker 1: the person that you're talking to, because you'll talk to
42:57
Speaker 1: a client and that client might value something their lifestyle
43:01
Speaker 1: more than something else, and if you can bring that
43:04
Speaker 1: out of them, then that's what usually then drives forward.
43:07
Speaker 1: Will when I'm calculating how much insurance you need, you
43:10
Speaker 1: told me this was really important to you, and so
43:13
Speaker 1: when I've come up with these figures, that's how I
43:15
Speaker 1: got there.
43:15
Speaker 3: Yeah, absolutely, yeah, absolutely, everybody listening to this episode of
43:20
Speaker 3: Sheese on the Money knows that my favorite type of
43:22
Speaker 3: insurance is income protection. I know that's a shared love
43:26
Speaker 3: of ours, though, So can you maybe, like we've defined
43:30
Speaker 3: already on this episode what income protection is, so we
43:33
Speaker 3: don't need to talk about that, but can you maybe
43:35
Speaker 3: talk a little bit more pragmatically to the value of
43:38
Speaker 3: income protection and how you see that implemented across the board,
43:42
Speaker 3: probably more specifically for women.
43:43
Speaker 1: But what does that look like to you? Yeah, I
43:46
Speaker 1: mean income protection. You're right, it's like my most highly
43:50
Speaker 1: valued insurance as well with such nerds. Yeah, to the
43:55
Speaker 1: extent that you know, I've had my income protection poler
43:58
Speaker 1: SIN since I was twenty one and and that's a
44:00
Speaker 1: really long time ago now, but if you spoke look
44:03
Speaker 1: at guys, if you spoke to most twenty one year olds,
44:07
Speaker 1: they don't have income protection, right.
44:09
Speaker 3: So, but there's so much value in getting it early.
44:12
Speaker 1: Right, absolutely. You know, I got my policy when I
44:16
Speaker 1: was young. I had no health events that had happened
44:19
Speaker 1: to me at that point, so it was really easy
44:21
Speaker 1: to get I locked away my premiums on something that's
44:25
Speaker 1: called a level premium, and I am absolutely reaping the
44:28
Speaker 1: rewards of that today because I am definitely much older
44:32
Speaker 1: than I was back then, and even though my income
44:35
Speaker 1: has changed a few times over those years, it's been
44:38
Speaker 1: really easy just to increase it as I needed to,
44:41
Speaker 1: because the bulk of it had already been taken care
44:43
Speaker 1: of when I was so much younger and healthier than
44:45
Speaker 1: I am right now. I actually had a conversation with
44:48
Speaker 1: my friend.
44:50
Speaker 3: She's a school teacher.
44:51
Speaker 1: She's a secondary school teacher, and when she got her
44:53
Speaker 1: full time position at her first school, I sat down
44:56
Speaker 1: with her and I said, look, you know that I
44:58
Speaker 1: work in this industry.
45:00
Speaker 3: This is how the.
45:00
Speaker 1: Products work, and I am going to tell you, as
45:03
Speaker 1: a friend, this is something you should consider and it's
45:06
Speaker 1: up to you whether you want to do something about it.
45:08
Speaker 1: But I want to have this conversation with you now
45:11
Speaker 1: so that I can feel rest assured that we had
45:13
Speaker 1: this conversation at some point and she said to me, oh,
45:16
Speaker 1: you know, but I've only just started working and that's
45:19
Speaker 1: the point exactly. And I said to her, I was like, okay,
45:23
Speaker 1: let me rephrase this for you. You haven't lived at
45:26
Speaker 1: home now for how long do you think you could
45:29
Speaker 1: live at home with your mum again? And she just
45:32
Speaker 1: looked at me and went nuh. And I said, would
45:35
Speaker 1: that be the option if something happened at this point?
45:38
Speaker 1: And she went yeah, OK.
45:39
Speaker 3: And that's what did a force to think, right. I
45:43
Speaker 3: have had clients come into the office and they're saying, look, Victoria,
45:46
Speaker 3: it's now a priority to me. I've had this back issue.
45:49
Speaker 3: I don't want to be I don't want to be
45:51
Speaker 3: at risk again. It's like, oh, it's a pre existing
45:54
Speaker 3: back issue. I can't cover that. I can't give you
45:57
Speaker 3: insurance for something that's already happened. And it's often heartbreaking
46:01
Speaker 3: because the issue that they are experiencing is quite debilitating
46:05
Speaker 3: and they're just trying to do the best thing for them,
46:07
Speaker 3: the best thing for their family, but that ongoing issue
46:10
Speaker 3: is now no longer able to be covered, and that's
46:13
Speaker 3: just really terrible. Yeah. So I was watching one of
46:16
Speaker 3: the morning shows the other day.
46:18
Speaker 1: I don't remember specifically which one, but there was a
46:21
Speaker 1: little piece they were doing on go fund me, and
46:24
Speaker 1: how people use go fund me now is a way
46:27
Speaker 1: to essentially fundraise for themselves to do things. The unfortunate
46:32
Speaker 1: thing I think I see all too often in my
46:34
Speaker 1: Facebook feed is people they're sick that have got go
46:39
Speaker 1: fund me pages so they can try and get through this.
46:43
Speaker 1: If you've got trauma cover in place, you don't need
46:46
Speaker 1: to worry about go fund me.
46:48
Speaker 3: Yeah, you don't need to reach out.
46:50
Speaker 1: To your family and friends and say, look, I'm experiencing
46:52
Speaker 1: this really horrible time and I need your help. You
46:56
Speaker 1: don't have to rely on the generosity of others to
46:59
Speaker 1: try and help you through that period of time because
47:01
Speaker 1: you've got things taken care of.
47:03
Speaker 3: I know someone who has recently had a heart attack,
47:06
Speaker 3: and that sounds terrible, and it absolutely was. It was
47:10
Speaker 3: an incredibly traumatic experience. However, they had their trauma insurance
47:14
Speaker 3: in place. They were also in the CBD when this
47:17
Speaker 3: hard attack happened, so they got to the hospital really
47:20
Speaker 3: quickly and they were actually in and out of hospital
47:23
Speaker 3: in twenty four hours. They were back at home and
47:25
Speaker 3: they were literally back at work. I did not advise this,
47:28
Speaker 3: but they were back at work in three business days.
47:30
Speaker 3: And so for me, that would have been a death
47:32
Speaker 3: sentence even ten fifteen years ago. But now we are
47:36
Speaker 3: surviving these things. And he got his full trauma payout,
47:38
Speaker 3: which was a couple of one hundred thousand dollars when
47:41
Speaker 3: he was back at work by Friday.
47:43
Speaker 1: And that's not the first story I've heard of that
47:45
Speaker 1: exact thing. I've heard more than one story where clients
47:49
Speaker 1: have had something significant happen to them like that, and that, Yeah,
47:54
Speaker 1: when these products were designed, you would have to crack
47:57
Speaker 1: someone's chest open to fix that problem. You can have
48:00
Speaker 1: it done in a day procedure now literally.
48:03
Speaker 3: Yeah, And it's something that our Facebook community has been
48:06
Speaker 3: talking about more recently. We had a lovely woman post
48:11
Speaker 3: this week actually and talk about how she'd broken her
48:14
Speaker 3: leg but had specific event insurance on top of her
48:18
Speaker 3: income protection, and she broke her leg and she walked
48:21
Speaker 3: away with twenty five thousand dollars paid off her car
48:24
Speaker 3: loan and was still going to work with a broken leg.
48:28
Speaker 3: And whilst that's awful, I think that we don't actually
48:31
Speaker 3: think of the events that could happen to us that
48:33
Speaker 3: we could actually claim on that put us in a
48:34
Speaker 3: better financial position. And whilst you don't get insurance to
48:38
Speaker 3: be in a better financial position is to maintain it.
48:40
Speaker 3: It's also well, why wouldn't you want to be in
48:43
Speaker 3: a position or if something pretty terrible happens to you,
48:46
Speaker 3: at least you're not stressing about money. Absolutely, So, Emily,
48:50
Speaker 3: you mentioned at the start of our chat that you
48:52
Speaker 3: work in the life insurance space and we haven't even
48:55
Speaker 3: spoken about life insurance yet. So as much as life
48:59
Speaker 3: insurance is very straightforward, there are a heap of things
49:03
Speaker 3: in this space that we should be talking about. So
49:05
Speaker 3: tell me a little bit more about your experience of
49:08
Speaker 3: life insurance.
49:08
Speaker 1: Yeah, so, I guess the first thing I have to
49:10
Speaker 1: say is that although it's called life cover or death cover,
49:15
Speaker 1: it's got lots of different dramatics. It is right, you
49:18
Speaker 1: can actually still be alive when it gets paid.
49:21
Speaker 3: Yes, but it has to be very serious yet to
49:24
Speaker 3: be paid.
49:24
Speaker 1: So yeah, so if you're deemed to be terminally ill,
49:28
Speaker 1: you can have it paid to you before it gets
49:31
Speaker 1: to the point where you're not around anymore. Now that's
49:33
Speaker 1: different to again when it was first designed, because you
49:37
Speaker 1: got it paid when you died and it was left
49:39
Speaker 1: to your beneficiaries. But now it can actually be there
49:42
Speaker 1: to help you on that journey of getting to that
49:46
Speaker 1: point with your friends and family. So, Emily, when getting
49:49
Speaker 1: life insurance, what is the most important thing to tell
49:51
Speaker 1: your advisor or insurance company.
49:53
Speaker 3: It's so so.
49:54
Speaker 1: Important that when you're going through that process to disclose
49:57
Speaker 1: everything you know about what they're asking about, because it's
50:01
Speaker 1: important why they're asking those questions, because once that insurance
50:05
Speaker 1: contract is in place, you want the safety. That's what
50:09
Speaker 1: you got it for, and you want the security of
50:11
Speaker 1: knowing that if something happened to you, you're going to
50:13
Speaker 1: be okay. But if for some reason you went weah,
50:16
Speaker 1: they don't need to know that even though they asked
50:18
Speaker 1: me about it. All of a sudden, when you should
50:20
Speaker 1: be having lots of peace of mind because you've taken
50:23
Speaker 1: care of this early on, it's now becoming a burden
50:27
Speaker 1: and you're sick or injured or something's happened to you.
50:30
Speaker 1: That's quite significant.
50:31
Speaker 3: Yeah, And if they find out that you haven't disclosed
50:34
Speaker 3: something that you had a pre existing history of, they'll
50:37
Speaker 3: just cancel your cover. They won't actually pay out on
50:39
Speaker 3: any of that. So you're not putting yourself in a
50:41
Speaker 3: better position by saying, oh, I am a smoker. I
50:44
Speaker 3: probably don't want to tell them I'm a smoker and
50:47
Speaker 3: I tick the wrong box on purpose. They'll never know.
50:50
Speaker 3: They will know they find out that's it exactly well.
50:53
Speaker 3: This has been incredibly insightful I love talking about insurance.
50:57
Speaker 3: As you already know, I was so excited to sit
50:59
Speaker 3: down with you today. What is one thing that you
51:02
Speaker 3: would want people listening to this episode of She's on
51:05
Speaker 3: the Money to walk away with knowing about insurance. Oh,
51:08
Speaker 3: that's a really tough question.
51:10
Speaker 1: I am so passionate about insurance because I have heard
51:16
Speaker 1: too many and seen too many situations where people didn't
51:19
Speaker 1: have it, and just what kind of an effect not
51:21
Speaker 1: even just financially, but emotionally that can have on perhaps
51:25
Speaker 1: the people around you or even the people you left behind.
51:29
Speaker 3: So if there's anything it's that.
51:31
Speaker 1: You should absolutely consider it that if you can get it,
51:35
Speaker 1: you should get it and get as much of it
51:36
Speaker 1: as you can possibly get as early as you can
51:39
Speaker 1: possibly get it, because you just don't want to be
51:42
Speaker 1: that person who's another statistic that needed help and didn't
51:46
Speaker 1: have it and now they're stuck in a rut.
51:51
Speaker 2: Sadly, that is all we have time for on the
51:53
Speaker 2: podcast today, But just before we head off, let's wrap
51:56
Speaker 2: the boring but important stuff. The advice shed on She's
51:59
Speaker 2: on the Money is general in nature and does not
52:01
Speaker 2: consider your individual circumstances. She's on the Money exists purely
52:05
Speaker 2: for educational purposes and should not be relied upon to
52:08
Speaker 2: make an investment or financial decision. Oh and yes, don't worry,
52:12
Speaker 2: we promise. Victoria define is an authorized representative of Consultant
52:16
Speaker 2: Financial Advisors Propriety Limited ABN sixty five double zero six
52:20
Speaker 2: three seven three double nine to five AFSL two three
52:23
Speaker 2: zero three two three. And thank you to our friend
52:26
Speaker 2: Ryan John for helping us produce this episode.
52:28
Speaker 3: We would love it if you joined our Facebook group,
52:30
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52:34
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Speaker 3: on Instagram at She's on the Money.
52:43
Speaker 2: Thanks so much for listening, guys, See you next week,
52:45
Speaker 2: See you next week.