Today, we’re going to talk about a difficult topic. Death. While average life expectancy has almost doubled over the last 100 years, the rate of death remains the same – we get one each. So, death is something that we need to think about and we need to plan for. It is never if. It’s when.
Exercise much, eat well, drink little and smoke nothing. If you do these four things, then you give yourself every chance of avoiding what is known as a ‘preventable death.’ As the name implies, a preventable death is one that could be avoided if different lifestyle choices had been made.
That said, many deaths are unpreventable. People develop illnesses such as motor neurone disease, for which we do not yet have a cure. Or they fall victim to a traumatic accident, such as a car crash.
Either way, deaths are often tragic. This is especially so if the person who dies is a financial provider for other people. It might be a parent, a partner, or even an adult child caring for older relatives. But most of us have somebody else who depends on us providing for them financially.
If you’re one of those people, then you should seriously consider death cover. Death cover is a form of life insurance that pays a benefit to your loved ones or other nominated people if you die during the period of the policy. While there can be some waiting periods on certain types of death, typically the policy pays if the insured event occurs. Put simply, if you have death cover and you die, a benefit is usually paid.
The only time a benefit would not be paid is if there is an ‘exclusion’ on your policy. Exclusions can be put on policies if the risk of you dying prematurely from a particular cause is known to be high at the time you take out the policy. For example, if you are being treated for cancer when you take out a policy, then cancer as a cause of death will almost certainly be excluded from your policy. This makes sense: no insurer would agree to issue a policy when it is highly likely that a payment will need to be made. That is why insurers make an assessment of your situation when you first take a policy out.
As a result, it usually pays to take out death cover earlier in life. This is before illnesses have had the chance to make themselves known to you. Virtually all death cover is known as ‘guaranteed renewable.’ This means that if an insurer issues you a policy in one year, it is obliged to continue to renew the policy each year thereafter – even if your health starts to deteriorate after the policy commences. So, if you take out cover and then experience an illness such as cancer, the insurer cannot exclude cancer as a cause of death in future years.
This means that the state of your health when you first take out the cover is very important. If you are in good health, your premiums will be relatively low and there should be no exclusions on your policy. You can then continue with this insurance in future years, even if your health becomes compromised. Obviously, younger people tend to be in better health – which is why commencing death cover while you are young and relatively healthy is a good move.
So, if there are people who depend on your good health for their financial well-being, talk to us today. We can assist you to arrange an appropriate level of cover with a quality insurer.