Women Avoiding Trauma
Sun Herald
Saturday May 25, 1996
FOUR months after an insurance agent talked her into trauma insurance, Tania Sharp, 35, was diagnosed with advanced breast cancer.
Her insurance payout meant she could keep her home even if husband Rod, 31, had to give up his council job to look after their two toddlers. Also, she vowed, it would help her beat the cancer.
Women worried about such illnesses and family care are among many small business proprietors taking out trauma and disability insurance.
Studies show 45 per cent of men will also suffer a serious illness before age 60, prompting advisers to warn that income protection is just as important as a financial plan.
Defiant about her cancer, Mrs Sharp, of Brisbane, also has a warning.
"Your life is just as important as a car or a house and it should be insured as well," she said.
Experts agree.
AMP risk products manager Frank Freeman said: "At least if you're earning money at the time you can replace stolen items. If you are not earning any money then everything stops.
"Obviously the big motivator for women in the home is to leave money around to look after the family.
"About 40pc of policies that we issue are to women. And an extraordinarily high percentage of the claims that we are paying for women are related to breast cancer."
MLC Protection operations general manager Graham Morrison said about half of the trauma policies purchased with MLC were by women. About 25pc to 30pc of all claims were for breast cancer.
Nearly 900 Australian women die of breast cancer every year.
And the Institute of Actuaries says men between 20 and 60 have a 14pc chance of dying.
"Only about 15pc of the population have income protection insurance," said Mr Morrison. "Only 2pc to 3pc of the population has trauma insurance. And it's estimated only 10pc of the adult population has any individual term insurance policy."
The average sum insured of $120,000-$130,000 was not sufficient to meet most needs, he said.
Choosing the best policy however, is not made easy by the fact that no two are the same.
Trauma policies pay a tax-free lump sum if a life-threatening condition is suffered. More than 90pc of claims are for heart attack, cancer and stroke. The premiums are not tax deductible.
Definitions on conditions can vary between companies. For example, some cancers may be excluded in some policies.
National Insurance Brokers Association executive director Noel Petterson says people should check the definition of disability in a policy.
Premium costs vary depending on age, sex, occupation, salary, medical history and whether you smoke.
Some companies offer policies that include death and total permanent disability cover.
While income protection insurance is also gaining popularity, insurance companies warn that premiums will soon rise.
"I think there's an understanding that governments can't afford to look after you any more," Mr Freeman said. "There is more self sufficiency out there."
Income protection insurance is tax deductible and covers up to 75pc of income paid regularly over a nominated period if you're prevented from working, get sick or have an accident.
"Women do purchase a lot of this insurance because there are a lot of women getting involved in small business," Mr Freeman said.
Women constitute about one-third of the nation's 1.25 million small business operators.
There are three types of income protection. Personal accident insurance covers a disability by an accident and benefits generally cut out after two years. This costs $100 to $200 a year.
A personal accident and sickness policy costs between $200 and $300 and benefits usually end after two years.
Long-term disability insurance which provides a monthly income up until normal retirement age or afterwards usually costs between $400 and $1,500 a year. The price for each premium will depend on age, sex, occupation and if the insured person smokes.
WHAT YOU PAY EACH YEAR
$3,000 Income Protection $100,000 Trauma
30yo f 45yo m 35yo f 45yo m
AMP $673 $688 $340 $788
COLONIAL $563 $716 $329 $675
FAI $749 $840 $367 $995
L & G $672 $757 $263 $611
LUMLEY $758 $798 $284 $732
MERCANTILE $945 $853 $308 $732
MLC $547 $696 $471 $1,001
NATIONAL $848 $1,010 $319 $851
MUTUAL
NORWICH $935 $1,015 $275 $688
PRUDENTIAL $628 $799 $313 $657
SUN $652 $741 $315 $633
ALLIANCE
NOTE: Applies to non-smokers only; premiums indicative only
Source: Life Research Pty Ltd
© 1996 Sun Herald
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