Paying out insurance premiums each month can feel like a waste of money, particularly when you’re carefully managing your budget and may not be getting anything back in return. So it’s understandable that many peopled are tempted to cancel their insurance policy to pocket the extra cash. However when you suffer an event that could result in an insurance claim, having cover in place can bring a huge sense of relief, both financially and emotionally. Take for example Wendy1, from NSW, who took out an income protection policy, offering her financial protection should she not be able to work due to illness or an accident for up to two years.
Wendy is a teacher with a demanding job working with young primary school children. She had been feeling uncomfortable and unwell for a while, and then in late 2013 she was diagnosed with Dystonia, which is a progressive neurological movement disorder, and since starting treatment for Dystonia, she has been further diagnosed with PANS and Hashimotos. All in all she has been diagnosed with two neurological disorders, two autoimmune diseases and two movement disorders wrapped up in these three illnesses.
The impact of these three illnesses has meant that Wendy’s body is becoming contorted and she is suffering from chronic pain, involuntary movements, tics and fatigue, making it impossible to work or even drive. Her illnesses have also impacted her socially, as her movement disorders are very uncomfortable and easier to manage when she is alone.
Wendy has now been off work for a couple of months and has invested a lot of time and money in treating her diseases. Whilst Wendy had accrued 80 days sick leave, it is estimated that her recovery time will take more than a year, so fortunately for Wendy, she has income protection insurance.
On a practical level Wendy was able to rely on her sick leave whilst she served her 90 day waiting period. Whilst her policy only covers for 75% of her lost income, having income protection insurance has meant that she has been able to budget to cover her day to day expenses like her mortgage and her personal loan as well as being able to spend some money on alternate health treatments, that are not covered by Medicare, but are proving to help her condition.
Knowing her cover will pay her for up to two years, has provided Wendy with a sense of security and comfort, which is helping her heal as there is no pressure or stress to return to work immediately. Without income protection insurance, Wendy would have either had to move out of her home or return to work after her sick leave ran out, which could have further impacted on her health with little chance for a full recovery.
Even once Wendy has recovered it looks unlikely that she will be able to return to teaching, so Wendy is going to use her time recovering to also work out what her options are, including retraining for another job, with the aim to once again become financially independent.
What does Wendy say is the best part of having income protection? “It’s such a blessing to know that I have time to heal and time to restructure my life and career.”
- Name changed for privacy reasons.
These articles are provided as reference material to allow more informed decision making, but are not intended as being a complete source of information on any topic. All readers should make their own independent analysis on the topic to make sure they have considered the aspects that are important to them.