I have looked at Choice’s articles on TPD however they seem only to relate to Superannuation TPD. My husband and I were advised to change our insurer for Life & TPD to Asteron by a financial advisor in 2012. As the premiums climbed I received independent advice from QSuper on finding a less expensive insurance retailer and also went back the local financial advisor . Both, after investigating alternatives, advised us to stay with Asteron. The monthly premium is now becoming beyond our means and could be described as ridiculous considering the small payout figure of $130 000. I just received a letter informing me that my MONTHLY premium is going from $525.80 to $677.55. I am a part-time govt employee and this equates to one week’s wage in the hand for me per month. My husband, who is a 63 casual farm labourer pays significantly more per month and is digging into his savings to pay as the wet weather means he cannot work. I have gone to my doctor to have a thorough health check as after decades of having TPD/Life I ironically have to give it up at the very time I am most likely to require it. I have spoken to Asteron to ask why I would have such a high premium as I am a non-smoker, a non-drinker with no chronic illnesses and have only been in hospital to give birth to children. They simply suggested I halve the payout figure so I could halve the premium.
It would be very helpful if Choice could investigate retail insurers & do a “Best Buy” re: TPD as well as the investigations done on Super insurance.
Welcome to the community @Switzerland1959
My experiences cover 2 decades of self employment. Initially I took out a high value life policy with TPD. We had teenage children and all the other costs of a large family. I travelled often and worked in an industry noted for certain risks. Very rapidly the reasonable monthly cost started to grow almost exponentially. Age drives the risk and premium tables. They also seemed to go up for other reasons. Eventually I realised the superfund I was contributing to and industry specific was a better option. The maximum cover available was less, but the premium far more affordable.
For the savings, there was far greater value in contributing more to super than wasting it on policies we were unlikely to ever call upon. We decided that our super would provide the longer term security. It’s important to note that it’s possible to access super at 60 or earlier under certain conditions. Ceasing work or transitioning to retirement are two. I’ve assumed that may be possible for you or your partner.
It would certainly be enlightening to see a review by Choice. A review of the independent products combined with life insurance might require considerable effort. One for the Choice staff to respond to.
In the interim have you looked to CanStar for their advice and comparisons.
‘https://www.canstar.com.au/life-insurance/total-permanent-disability-explained/
CanStar appears to offer similar advice to what I received many years previously. It is more cost effective to have bundled insurance with super than to purchase independent cover.
If you have looked at Choice articles on TPD insurance, you will see that they consider this type of insurance to be ‘junk’. You are paying for something you in all likelyhood will not be able to claim on due to definitions.
Life insurance, funnily enough, is something that as the probability of a defined event gets higher, ie death, the premiums go up for a given payout. You need to evaluate why life insurance is needed at all. Are there financial dependants? Debts that would need to be paid?
As an aside, I would be pretty certain that your ‘financial advisor’ was pocketing a commission from the insurance company. Always something to keep in mind when dealing with insurance unless you deal direct.
Yes, I did see those articles. They seemed relate to insurers chosen by Super funds and had the Activities of Daily Living caveat which seemed to eliminate anyone who wasn’t comatose. I wasn’t sure if that applied to Retail policies too.
I did pay QSuper $1200 for independent advice about 5 years ago. I don’t think they offer that service anymore. I thought they would suggest we buy more of their units but they told us to stick with Asteron. Thank you for your comments.
We are mortgage free with no dependent children however as pensions are getting further and further into the future we were concerned that we would be caught in that twilight zone of a sudden illness and pension age. When I went to QSuper I thought they would suggest buying more of their units however they told us to stick with our current insurer. Getting other opinions helps. I am now thoroughly convinced to let it go but this will help convince my husband to stop paying his premium which is about $900/month as we have both been nervous about letting go of this “safety net”.
I haven’t looked at the site you suggest but I definitely will. I guess we have been too compliant and not confident enough to go against the advice of the “experts”. Thank yo very much for your suggestion.
My experience with advisors and insurance has not been positive. On top of paying ongoing commissions (which I had to ask to be ceased after I fired the advisor for other reasons), I found out (much) later that the advisor had ticked all the boxes for the extra cost options, most of which were useless (for example a childless person is covered for a childcare benefit). These extra costs of course increased the commissions for the advisor.
The insurer also failed to mention or show the extra costs of these options - the annual policy statements simply stated “extra benefits” were included - implying they were generously including them at no extra cost. I only found out while talking to the insurer about another matter when they accidentally revealed the extra costs existed. Even then, they didn’t reply to my written enquiries about these costs and what they were for. After 9 months with no response at all, I had to put in a complaint to AFCA to even find out how much extra I was being charged. It turned out that these useless extra options were about 1/3 of my premium…
Wow…it is such a concern. These policies are complex and the trust we place in the advisor is significant as we are paying them to act on our behalf. I have just been on the phone to a number of insurance companies trying to gather the information to make the best informed decision. My head is about to explode however I now realise that with tweaking (losing some of the cover that, as you say is not necessary for our time of life and circumstances), I can still get good cover and halve the premium per month.
