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When the default is damaging | Is your life insurance policy set in stone?

Posted by Sean O'Kane on 18 June 2019
When the default is damaging | Is your life insurance policy set in stone?

Trivial pursuit question what does guaranteed renewable insurance mean?

Guaranteed renewable means that once you've taken up a life insurance policy and have been officially accepted and received your policy document, the life insurance company can't cancel your coverage for any reason. Providing you've been honest in your dealings with the life insurer, you've disclosed everything required by law, and you pay all future premiums when they fall due, guaranteed renewable means your policy is locked in.

Why is this important? Aren't all personal insurances like this I hear you ask?

Well no, actually, as all those people who have default QSuper income protection cover in place will have found out recently. For full details on all the changes click here, but two of the major changes are:

  • change in waiting period from accrued sick leave plus 14 days to 90 days or accrued sick leave, whichever is greater; and
  • reduction in benefit period from three years to two years.

On the plus side, this means the cost of the cover has reduced, but it's not hard to see from these two changes that for younger doctors with minimal sick leave the change puts them in a significantly worse position.

We wrote a blog in March about the problems of default cover in super, so this major change by QSuper is quite timely. What I think will surprise people is that QSuper can just automatically do this.

I've been advising clients on personal insurance since 1995 and have only ever recommended and put in place guaranteed renewable policies. The result being that the conditions of these policies can only ever be improved, benefits can never be taken away, and they can't be cancelled by the insurer, unless the premiums aren't paid.

If you haven't looked at your insurance for a while, or only have default cover in place, talk to an experienced financial adviser who can recommend and implement comprehensive guaranteed renewable insurance, to ensure you're always protected.

Author: Sean O'Kane Connect via: LinkedIn
Tags: Financial planning Insurance

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The information on this site is of a general nature. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.

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