Updated November 12th 2013


I was recently having a discussion with my wife over the dinner table about life insurance policies (I know, we are a riveting couple!). My wife is a life insurance specialist for a large financial planning firm, and comes across interesting scenarios on a regular basis.

Just recently, she saw an existing client of the firm who had held an Income Protection policy for many years. It was only through casual conversation that the client disclosed that he had been diagnosed with Prostate Cancer in 2007. When my wife asked if he made a claim under his policy, he stated that he did not think he could claim for this condition under an Income Protection policy, given that the length of time he had off work did not exceed his waiting period.

However, this particular policy included a Trauma benefit as part of the Income Protection cover, and my wife advised him that he was actually entitled to claim under this additional benefit – resulting in a $130,000 payment from the insurer within a matter of weeks.
This made me ponder the question “Why don’t people know what they are covered for?”
After all, many of you have been paying significant premiums for your Life, TPD, Trauma and Income Protection policies over a number of years, and are most definitely entitled to the benefits of holding such policies.

I came to the conclusion that it was a combination of factors that could cause such a scenario. Insurance policies are complex these days and often require specialist knowledge to interpret them. Contributing factors could also be a lack of education from the original adviser, a number of years passing since the policy was put in place or reviewed, or simply a lack of interest.

For any of you that have already used our services to establish a personal insurance policy, you would be aware that we go to great pains to ensure that you know what the policy does and does not cover you for. I am also aware that a lot of CIB clients hold existing policies that were put in place many years ago, and time may have faded your memory of the detail of these policies, or it may have been a number of years since you have reviewed how the policy definitions stack up.
Regardless of which insurer you are with, or who currently provides your insurance advice, I am happy to offer the service of sitting down with you to go through the details of any contracts that you hold, so that you can fully understand the nature of this valuable protection.

As in the case of my wife’s client, some policies are extremely comprehensive and have excellent definitions and included benefits, whilst some policies are very basic and cover an industry minimum only.
So the message here is ‘scratch’ the detail of your insurance policy – it may not mean that you ‘win’ a large sum, but you may discover that your current policy does not provide the level of protection that you thought it does, or indeed justifies the premium that you are paying. At the very worst, you will be better informed about what your policy actually covers.