Personal insurance – do you have enough?

I am mostly a glass half full type of person. However, last year my resolve was severely tested. The first half of the year was spent losing weight, exercising more than I had in the previous five years, and feeling healthy. The second half of the year was spent battling a deadly tumour that had been quietly growing inside me for the last few years.

So I cannot recommend personal insurance highly enough but how do you know if you have enough?

You don’t need to get your money back

Insurance is something you don’t need until the day you do, and often you can’t predict when that day will be. It doesn’t matter whether it is private health insurance, car insurance, home contents insurance, life insurance or income protection insurance. You don’t need any of it except for if something goes wrong.

I often hear people say they are going to cancel their insurance because they don’t use it. Insurance isn’t something you should be looking to get more out of each year than you pay in premiums. It is there to give you better choices when something really bad happens.

Insurance is priceless

For the last 30 years I have been paying into private health insurance. Sure, I get some tax benefits from it, but I have never really understood the value of it. I always thought it was about going into a nicer hospital with better food and more staff. It’s not. It’s about being able to choose your own doctors and get the right care when you have something out of the ordinary.

Last year, at one stage I was seeing my GP, a cardiologist, an endocrinologist, and a surgeon – not to mention the four anaesthetists! The tumour I had was rare, hard to diagnose and often fatal – scaringly, around 50% of cases are diagnosed when they do the autopsy.

It was only by actively working together that my doctors found out what it was and were able to fix it. Without being melodramatic, if I went through the public system and didn’t have the same doctor all the time, I am pretty sure they wouldn’t have found it until it was too late.

Someone asked me recently whether I got more money back from my private health fund than I have paid in over the last 30 years. The answer is probably (given they paid out more than $250,000 for my care), but I don’t really care. To me, private health insurance is priceless.

You are your families most valuable asset

Often people insure their car and their furniture but miss out on their most important asset. Themselves. Too many people I see don’t have the right personal insurance. If they can’t work for an extended period of time, they would not be able to pay the bills. If they died prematurely, their family would be in dire straits financially. Having the right personal insurance is about making sure you and your family are protected financially if the worst happens. It gives you choices.

It is worth asking yourself if you:

• Are diagnosed with cancer and need extended treatment, can you afford to take time from work?
• Cannot work for an extended period of time, how would your family live?
• Have a child who gets sick and needs to go into hospital for an extended period of time, how would that impact your income?
• Died prematurely, what would your family do? Sell the family home? Move to a town where house prices are cheaper?

I specialise in helping people make the most of their money, and part of that is making sure they have the right personal insurance. If you want to discuss yours, book a chat via the button below or contact us on 0417 034 252 or at office@constructwealth.com.au.

About the Author
Phil Harvey is an independent financial adviser. In 2017 Phil set up his company Construct Wealth to help clients best manage their finances so they focus on what is important to them. He is a founding member of the Profession of Independent Financial Advisers and a tax financial adviser, registered with the Tax Practitioners Board.

General Advice Warning
This advice contains general information. It may not be suitable to you because it does not consider your personal circumstances. Phil Harvey and Construct Wealth are authorised representatives of Independent Financial Advisers Australia (AFSL 464629)

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