Over the past year, we have had five clients who were injured during sport and recreation pursuits who were assisted with claims under income protection and specified injury cover.
In the previous two years there were a similar number of footballers both locally and outside of this area, very grateful for the insurance cover that I arranged for them.
Some of those players had young families and it was their wives who said “You go and see Jono and get some insurance or you’re not playing!”
More particularly, those who are self-employed, because they don’t have sick leave to call on, so without cover can be in dire straits financially.
The trap for the unsuspecting, is that the very basic cover held within the “MySuper” products such as Industry Superannuation Funds, offer cover up to 75-85% or pre-disability income. However there is no capacity to pay a lump sum for specified injury for cover held within a superannuation fund.
If the superannuation fund insurance has a 30 day wait period before being able to claim, it is generally 60 days before money is forthcoming. The immediate out of pocket medical expenses then becomes a challenge for most young people.
What is the solution?
I generally arrange a combination of income cover within super with about 20% of the premiums to be paid outside of superannuation, to fund cover such as accidental injury and specified injury.
This allows for a lump sum to be paid almost immediately outside of superannuation, while the wait period for income cover ticks over.
With the bulk of the premiums still coming from superannuation, this doesn’t mean you have to change superannuation funds, the out of pocket premiums, to give protection while playing sport, is affordable.
The risk is too great not to have cover and I liken the insurance cover as a price to pay to play sport or enjoy other active pursuits, in the same way that there are registration costs or other fees to be met before you can play.
I have also found, that writing decent cover on level premiums, ends up saving money in the long run when compared to what the cost of inferior cover is within many superannuation funds.
Example of a Claim
I have permission by a client to describe how insurance helped him.
“Jock” (not his real name), is a truck driver, employed locally who is a keen sportsperson.
A knee injury on a weekend meant that he could not climb into the truck cabin or safely operate the vehicle.
He lodged a claim on insurance immediately on his income cover which included specified and accidental injury.
Knee reconstruction followed.
For a white -collar worker, while there would be no issue with return to work fairly soon after surgery, for a truck driver, return to work becomes more complex.
Because of the liability risk to the insurance company, they have been insistent on “Jock” having the cost of occupational therapists and an intense rehabilitation program all covered, in addition to the income cover he was receiving, to ensure that Jock could operate as a truck driver at 100% capacity before returning to work.
Footballers on Claim
There have been quite a few footballers on claims after sustaining and injury playing.
One standout, is a self-employed tradesman who over the past year, needed emergency surgery due to non -sport related illness but after recovering, returned to football training.
His season was then shortened by a fracture which required rehabilitation for many weeks.
Without cover, he and his family would have been in financial difficulty.
In his case, business expenses cover was included, so the cost of lease payments and other business expenses were met as well as the salary of his spouse who does the bookwork for the business.
His business survived because he employed someone to carry out the contracts to which he was committed.
The insurance cover allowed the claimant to supervise the contract work and ordering materials.
The business expenses cover was an add-on that I suggested when putting together the quote.
That type of cover, I suggest is not used often enough and when there are rented business premises and high staff costs, that cover can be the difference between a business failing, should there be an injury or sickness to the business owner and a viable business when they have recovered and back at work.
Your Heritage Financial Planning Pty Ltd(330480)
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