Two Insurance policies that, on the surface seem pretty much the same. Both for Income Protection for a payout of $5000 per month. Two very different outcomes and a difference of more than $50,000.00.
This is something that I never would have considered before- they seem the same so I just choose the cheaper option right? Policy 1 pays the standard $5000 per month for say six months that I am off work. So I get $30,000. Helpful, yes, absolutely.
Policy 2 costs a little more per month in premium but has some extra ‘bells and whistles’ built into the policy. When it comes to claim time, Policy 2 actually pays me my income of $30,000, plus it pays me a the value of one month income ($5000) lump sum in the first month to cover additional medical costs, it pays extra for child care costs I may require if I cannot look after my child due to my illness, it pays extra for my partner’s lost wages to stay home and care for me, it even pays my employer a ‘Job Security’ incentive for them to keep my position for when I can return to work. Policy 2 can pay me out a maximum of $80,000.
That’s a difference of $50,000. When I think about the difference that would make to my life during my illness, it’s massive. It could mean the difference between me being able to afford to simply keep paying the rent and buying food or being able to do that, focus of my recovery, get quality treatment, not put my family under pressure and ensure I can return to work and continue on with my life once I am better.
I wanted to share this simply to highlight how different insurances can be and to encourage you as a consumer to ask questions and understand what you are really getting, and to compare apples with apples. A cheaper policy may be so because it has substantially less features, so it’s always best to do your homework and be well informed before you purchase.
By Karlee McBroom.