What do life insurance claims & bushfires have in common?

One thing that life insurance claims and bushfires have in common is that you don’t see them coming.

Bushfires are unfortunately a part of Australian life; and those who have suffered from the fatal 2009 Black Saturday bushfires will attest to the devastating effects of the bushfire on their lives and those of loved ones. The 2009 bushfire was the worst natural disaster in Australia's history, surpassing the 1983 Ash Wednesday fires. Not only were thousands of homes burnt, but over 200 lives were lost (1).

Of the 200 plus lives lost a mere 30 life insurance claims were made to life insurance companies (2). With these small numbers of claims made, only $1 million was paid out in life insurance claims (3). This is not to say that the life insurance companies were unwilling to payout claims, this was far from the truth as insurers are by law mandated to pay claims. The problem lies with the severe underinsurance problem in Australia; not enough of us have personal insurance.

Those of us that do have cover tend to fall short of the ideal amount which is usually up to ten times your income, depending on your situation.

Australian life insurance companies will pay life insurance claims when the cause of death is bushfire related.

What other personal insurance policies can protect you against the effects of bushfires?

While life insurance instantly springs to mind, many of us tend to forget about the importance of trauma insurance and total and permanent disability insurance (TPD insurance).

For example, (assuming you meet the trauma event definitions), a trauma insurance policy would typically pay a claim in the event of the insured person suffering from severe or major burns, loss of limbs or sight, major head trauma, and the need for intensive care.

If you have suffered from severe third degree burns and meet the definition as outlined in your product disclosure statement (PDS), you may be eligible for a trauma insurance payment.

If you become totally and permanently disabled and meet a life insurance company’s definition, again you may also be eligible for a TPD insurance payment.

Another personal insurance policy which may offer help is income protection insurance. If you were injured due to bushfire related circumstances (such as minor burns, smoke inhalation, falling branches/debris), and needed to take time off from work to recover, income protection insurance can pay up to 75% of your income.

Family life insurance & child cover

We would also like to remind all Australians that life insurance is not just for the working spouse. You should also look to cover the stay-at-home parent, and if possible your children as well.

Just like adult personal insurance policies, Child Cover also typically protects against severe burns, loss of limbs or sight and can help pay for intensive care.

How do I make a life insurance claim if all my records are burnt in a bushfire?

Life insurance companies have a record of your details on file and will give you a copy of your life insurance policy if you make a request. You will only be required to give your name and your address to do so.

If you have been dislocated from your home due to a bushfire, you can also request the life insurance company to send your policy documents to where you are currently staying, such as a friend, family or other temporary residence.

Natural disasters like bushfires do not discriminate

While we may not be able to avoid devastating natural disasters like bushfires, we can financially protect ourselves and loved ones should the worst happen.

Many of us have home and contents insurance, but how many of us have stopped to think about insuring our lives? xLife Director, Russell Cain warns of the risk of leaving your life at the peril of extreme weather.

“Don’t leave it too late to organise your life insurance, TPD insurance, and trauma insurance” says Mr Cain, “I urge all Australians to seek financial protection, particularly those in bushfire prone areas.”

For more information or to compare life insurance policies for free, please call xLife on 1300 135 205 or visit http://www.xlife.com.au.

References:
1. www.heraldsun.com.au/news/special-reports/death-toll-by-area/story-e6frf8zo-1111118869307
2. www.insurancenews.com.au/analysis/simplicity-the-key-to-life-insurance-growth
3. www.moneymanagement.com.au/news/understanding-risk-insurance