She's On The Money - How Being a Woman Changes Your Insurance (and Why We End Up Claiming More)

Starting point is 00:00:00 My name is Natasha Bamblett, I'm a proud First Nations woman, and I'm here to acknowledge country. Tii, gilinyan ganya, nianakaka yao yinbina waka, nianakai nianbina yakarumja, duminyagumiga dumiga ithawaka nirawamundamun imalan. Mumu bangada boma ininyalan waka, gaunan yakarumja, wutunarana. Hello beautiful friends. We gather on the lands of the Aboriginal people. We thank, acknowledge and respect the Aboriginal people's land that we're gathering on today. Take pleasure in all the land and respect all that you see. She's on the money podcast acknowledges culture, country, community and connections, bringing

Starting point is 00:00:41 you the tools, knowledge and resources for you to thrive. She's on the money. She's on the money. Hello and welcome to She's On The Money, the podcast that helps you build the kind of financial safety net you'll thank yourself later for. Imagine this, you've woken up one morning and you genuinely can't go to work anymore. You can't push through it like you normally would, you are out for the count. You call in sick thinking it's going to be just a couple of days, but seven days of your sick leave is gone. And before you know it, two weeks has

Starting point is 00:01:33 become six and you still have no idea when you're going to be able to return to work. Your pay, it's dropped to zero. Your partner has also burned through all their leave, taking you to appointments and keeping the family afloat. Meanwhile, the bills keep landing exactly on time. The mortgage, the groceries, the utilities, the childcare direct debit that does not care if you haven't worked in 42 days. At that point, the problem isn't even a health issue anymore. It's a financial disaster unfolding right around you. And you realise your entire safety net was built on one assumption, that you'd just stay healthy forever. If hearing this has made your stomach drop a little bit. It did for mine. Sorry, but that's actually my intention. But the good

Starting point is 00:02:20 news here is that I have brought in a person who can help you make sure that you never end up in that position. I'm Victoria Devine, and with me is our go-to for everything women need to know about protecting themselves properly, Mr. Phil Thompson from SkyWealth. Welcome back to the show. Thank you for having me. I am very excited about this. I feel like I was relatively dramatic with my introduction though. yes but you see where i was going with it i saw exactly where you're going and we have clients who have felt that experience as well do you think i like landed on the point i didn't say any specific illness but i feel like i've dramatized it enough for you to understand this can literally happen

Starting point is 00:02:58 to anyone and it does exactly feel your entire career is personal insurance like everything you do work wise is about making sure that people are protected and i love it because if you guys have been listening to my show for a while. I also love it. But you work in the space of income protection, life insurance, trauma insurance. We are talking about the types of personal insurances that aren't health insurance. And I am very vocal, I would say, about how important these things are. I obviously have them. And thankfully, they so far, Phil, have been the biggest waste of money. Like I've never claimed on them. How good is that? Yeah, yeah. Same with me. I've yet to claim and hopefully never will.

Starting point is 00:03:41 Life win. But we've done whole episodes on exactly what these insurances are and why they are so important for your financial security, which I'm going to link into show notes because this episode is not about explaining what life insurance is compared to TPD or what your trauma insurance could provide for you. So we are going to dive into this episode because, I don't know, I want to do this episode because being a woman is fun, I suppose. And you don't have any experience with being a woman, but you deal with women every single day and you insure them every single day. And when you are a female, it comes with a whole extra layer of financial risk that literally nobody warns you about. We have far more health events. We have more time away from work,

Starting point is 00:04:28 more chronic and reproductive conditions. We have more mental health claims and we then get this, we live longer, which means our risk profile when it comes to insurance is completely different to men. So no wonder this stuff feels, I would say, relatively confusing and overwhelming at the same time as making me a little bit mad. So this episode is all about making insurance make sense properly for women specifically. So if you're a male listening to this, welcome to the education series if you're a female listening to this this one was for you and if you're a male listening to this and you have a partner keep listening exactly or you just are interested slay king yeah i wanted to start by asking phil in your experience of helping people

Starting point is 00:05:13 over literally how many years you've been doing this i'd say like 20 this is crazy i'm not that old thank you i've been an advisor for over 15 now over 15 because it's not not 20 oh come on I'm not that old. No, but you could have been. I'm sub 40. Like I've been in finance for 10 years and that was my second career. You could have started at 20, but you were literally running away with the circus. Yeah, exactly. This is kind of my second career as well, but that's okay. But you experience helping people get these insurances every day. When are women most likely to look at insurance and be prompted to actually do something about them? There's some normal triggers getting insurance. So one of the big ones is, hey, we're pregnant.

Starting point is 00:05:53 we're now going to have little ones that we're going to look after and so that's when a lot of people think about getting insurance in place I feel like it's always life event focus like you don't just wake up one day go should just really get my stuff together Phil I'll just give Phil a buzz he'll he'll set it up for me like I am so evasive of everything and that just feels like an admin task I don't want to play with as an insurance expert I need to know when would you say is the worst time for women to go and start looking at their insurances? Yeah. So, I mean, there's no bad time. If you're getting insurance at any time, then that's the best time to do it. But there are times where getting cover becomes harder. So, you know, if you've had a health event,

Starting point is 00:06:36 it can be harder to get insurance in place. If you are, you know, pregnant and having time off work, there can be difficulties getting some cover in place at those points in time. So, no time's a bad time to get insurance or think about insurance, but they're probably the hardest in terms of underwriting? So from an underwriting perspective, and for those that don't know, underwriting is the process when an insurer kind of looks at you as an individual, they look at your health, your lifestyle, your medical history, and then they make a decision individually. You don't just apply and get put into a bulk lot. They individually assess every single application. They decide what cover they can actually offer you as an individual and on what terms.

Starting point is 00:07:16 Why is pregnancy such a specifically tricky time? There are health events that happen after pregnancy and some additional risk when it comes to pregnancies. During pregnancy, there are a lot of additional health concerns, but it's also time off work. So things like income protection or disability cover is protecting your income and being at work. So if you have an extended period off for maternity leave, insurers will then, depending on the timeframe of when you're getting cover, they may not offer income protection until

Starting point is 00:07:45 you're back at work. Which kind of feels rude, not going to lie. So when should women, especially those who are planning a pregnancy, they're not pregnant right now, but they're planning to be pregnant in the future, look at personal insurances to put themselves in the best position or best position to have a favorable outcome? Really, as I said, today is the best time. But if you are planning a family, a part of that conversation and discussion is, you know, how much time are going to have off work? How are we going to fund this time? And as a part of that, you should be looking at personal insurance as well, thinking about getting that in place. So pre-pregnancy is ideal, but that doesn't mean that if you're pregnant, you can't get insurance covered. There

Starting point is 00:08:24 are lots of options. It just means that there may be limited insurers that we can use. So some insurers will cover you all the way up until birth for income protection. Some will say, okay, you've got to be in the first two trimesters before we'll offer income protection. Yeah. And that's where we've got to have good conversations with our financial advisor, when setting that up about our life intentions. I always say that being a financial advisor is such an intimate job. I think it's more intimate than being someone's doctor. I mean, not physically intimate, don't get the wrong idea, but you get to know so much about people like beyond what your GP or what your accountant gets to know. Like I need to know, hey, Phil,

Starting point is 00:09:03 so you're setting up these insurances, you're planning on having children. What does that look like? Have you got any health history there? You know, what's your partner like? what's their income like? We're not just asking like doctor questions. We're asking everything and putting it all in one bucket, which is why it's so important to have these conversations. And then on the flip side, I also wanted to caveat when I was planning on getting pregnant with Harvey, my husband and I were like, we need to look at our health insurance, which is a completely separate conversation. But because maternity wasn't covered in the standard, there was like this big 12-month wait, but a massive loading. So my health insurance absolutely doubled. I would

Starting point is 00:09:42 say just over doubled because it then needed to include obstetric care and maternity and more hospital cover. It's not like that with personal insurances, is it? Yeah. So no, you aren't getting 100% loading if you are pregnant getting income protection, depending on the individual, but you're going to be charged a standard rates. An individual, same occupation, same income, same health history, whether they're pregnant or not pregnant, will be charged the same premiums. And disappointingly, which to you and I is not a surprise, but to everybody who maybe isn't insured, women are more expensive to insure than men, aren't they, Phil? Yeah. For income protection and trauma insurance, everything else being equal,

Starting point is 00:10:23 the premiums will be more. And for life insurance and disability, men get charged more. I used to always caveat that with clients and be like, hey, I'm going to do all these apps, but just know the quotes that come back, even though you're basically the same age you met at high school, neither of you have had health events, her insurance is going to be more expensive than his. And it's just the way it comes out of the wash. Because I'd had a few conversations prior where I was presenting an SOA to a client and they're like, well, why is his cheaper? And I'd be like, oh, honestly, misogyny. But in reality, you are more risky. So when it comes to women, what is the main thing insurers are looking at? It's claim statistics. At the end of the day,

Starting point is 00:11:00 insurance companies are just the math geeks called actuaries at insurance companies. They're real cool. They're real fun. They are the cool guys. And sometimes the sales team ignore all their numbers and just choose whatever numbers they want to get sales in the door. But the actuaries are the ones that go, based on our claims data and who's claiming on these policies more. And so the reason income protection and trauma insurance is more expensive for women is because the claim supports that. There are more claims and so therefore if you're going to use that policy more, you know, you're going to be charged more.

Starting point is 00:11:34 Just like a 23-year-old young man getting car insurance, statistically more likely to crash his car. His is more expensive. His is more expensive than, you know, me as a sub-40-year-old. I didn't say at any point you were over 40. I just said that you could have nearly 20 years' experience. I'm turning 40 next year and I couldn't be happier. 40 is the pinnacle.

Starting point is 00:11:57 Yeah, the best. 40 is the new 30. Anyway, I want to know, what are the most common health conditions that can impact an insurance application? Because we know that there are some health conditions that they'll look at and be like, oh, that doesn't mean anything at this point. So what can that look like? And then on top of that, what can that then mean for things like exclusions and loadings and all of that fun stuff? Yeah. So every insurance application will look at every individual's health history. things that are specific for women are things like pregnancy complications. So things like

Starting point is 00:12:30 preeclampsia, we're talking about like gestational. Oh, I did that one. Yeah, yeah. Yeah, I did that one. You ticked your bingo card. Tick. I'm so good at this. But I didn't get to claim income protection. Rude. Yeah. Yeah. And then there's like things like gestational diabetes. Some of those things will impact a future application. Whether it has no impact at all, there will be questions about those things. But other specific health events for women are things like endometriosis, PCOS and so there are specific women's health events that may impact an insurance application yeah now some people may have this you know history but it has no impact on the application some may have different experiences so the same diagnosis but different experiences will have a

Starting point is 00:13:12 different outcome I know it also covers things that I think are more obvious so like female specific cancers like breast cancer or cervical cancer or ovarian cancer and then I had a lot come up way back when because I'm not an advisor anymore and that it feels like yesterday but also like six million years ago and the insurance industry has changed so much but we used to have a lot of conversation about the BRCA gene when it came to breast cancer and them testing for that and if you had a history of that so they do go very deep they're not just going you got sick and then you go nah and then they go all right. All good bro. All good bro. Like that's not how it works. Like they actually will go very deep. And I would say like that medical

Starting point is 00:13:55 questionnaire, any medical questionnaire for any insurer, she's pervy. She's real pervy. So be prepared for that. And what we do at Sky is we basically replicate all those questions because we know there's a massive difference between insurance companies based on a whole bunch of health histories. So, we actually ask all those questions up front so we can get a really clear understanding because, you know, the BRCA gene, some insurers view it differently, but even family history of cancer, if you've never experienced it or you don't have the BRCA gene, but your mother had breast cancer, that will impact your insurance with different insurers at different times. And so, all of those things, we try and find as much detail as possible.

Starting point is 00:14:36 So, at Sky, we're very pervy when it comes to your medical history. And that's why I'm like, Hey guys, just warning you, this is going to be a pervy experience, but that's why you want someone that's trusted. And to be honest, I'd prefer you to ask all of those questions upfront because the reality is if you went ahead and some financial advisors will actually go, great, I'd never want to invade on your personal space. So what I'm going to do is you can do the telly questionnaire and you can call the insurer yourself and just do the whole questionnaire yourself. Sorry, I need to control it a bit more because if you disclose something on that phone call that I wasn't aware of and would have been one of the reasons I would

Starting point is 00:15:11 never have sent you to that insurer, I need to make sure that I'm sending you in the right direction. And you might not think, oh, well, that's a bit of a waste of time. That's not the biggest deal. But if you get a decline from an insurer, it makes it very hard to go to other insurers. So we want to just like cover our bases. So let your financial advisor be pervy. And I would say, don't DIY because you don't know what you're stepping on. Like you disclosing, oh yeah, my dad had a back issue and you don't think it's an issue, that particular insurer might. And this is why it's super important. You're talking about advisors knowing a lot. Like, you know, if you're a wealth advisor doing superannuation advice, you just need to know

Starting point is 00:15:51 the financial outcomes. What is your life goals? And we can kind of do that. But when it comes to life insurance, we've got a, it's like a puzzle that we're putting together with each individual person based on the individual health history and then picking the insurer that's best suited to someone's health history. Yeah. So going back to all of these women's specific health conditions, what happens if these things are pre-existing or you have already experienced them? Can you still get cover? Yeah. So, I mean, two examples. I was about to ask you, can I have some interesting examples? Yeah, yeah. Let's talk about it. I thrive on being able to understand an

Starting point is 00:16:29 example. I don't want to read a textbook. So something like endometriosis, very, very common. And so someone who has a diagnosis, but it's very well treated and it doesn't lead to any time off work, you're going to be covered generally at standard rates, depending on how recent that diagnosis is. If it's recent, then there may be an exclusion, but you could probably get it removed in the future fairly easily. If someone is having more severe pains and maybe some time off work, then there may be an endometriosis exclusion. If it is really severe and a lot of time off work and it has a really significant impact on your lifestyle, your work situation, they may actually decline cover outright. So it's not so much what are you

Starting point is 00:17:13 diagnosed with? It's more what is your actual experience as an individual? So endometriosis diagnosis can lead to no impact at all on your insurance or to a decline on your insurance. Yeah. And that's really important to understand because sometimes you might have chats at brunch with your girlfriend to be like oh I didn't get insurance because like I had my endo and then you just assume that that would apply to you as well and that is not the case exactly and then you said before you can get exclusions removed and I think that's important to talk about as well because I got my insurance when I was pretty young because I was a financial advisor and I was like oh my goodness like it's always the plumber that has a leaky tap I've got to get my stuff together

Starting point is 00:17:52 and when I first got my insurances I had a mental health exclusion because when I was a teenager I had an eating disorder, was hospitalized for it. I'm happy to talk about it. But like, that was one of the reasons why I was still seeing a psychologist to like, you know, deal with all of those issues. And they were like, look, we'll cover you, but like not for eating disorder related health issues. And I was like, okay, cool. Accepted that. Five years later, I gave them all the documentation to say, I don't see a psychologist. I'm not struggling with this anymore. I have gone to the doctor and everything is good. And now I don't have a mental health exclusion at all on my policy. So I think that that's really important to kind of

Starting point is 00:18:31 reiterate as well, that exclusions could be forever. Like there might be really big ones where you've had lung cancer because you were a smoker and they're like absolutely never lifting any exclusion related to that. But if it's something that you no longer struggle with and you might not, or assuming you won't relapse into, they're pretty good at making sure that they tick all the boxes and make sure that their clients are in the best possible position. Exactly. And the other example about cancer is mainly family history of cancer. So if your mother had breast cancer, when your mother was over 40, but under 50, two insurers will look at it and go, we will offer you cover without any exclusions. Everyone else on the market will say,

Starting point is 00:19:14 we'll either offer you an exclusion or we'll charge you a higher premium if you want that covered. They didn't give me that option. I just said, nah, no bueno. No bueno? No bueno. And then I was like, ha ha ha, now I want it back. But there are other ones like, if your mother was actually over 50, then you've got a lot more options. And that's back to your point about this is why we find out all this information upfront, because we want to know how old was your mother when she had breast cancer, even though that's not your experience. We want to know that because that can lead us to recommend a more expensive product, but it's going to cover breast cancer because given that you've had that family history and it's been a part of your

Starting point is 00:19:51 family, we want to make sure we're covering that. You're more likely to experience that and I actually want you to be covered for that. Yeah. And it's more important to you because you've seen the impacts of it. Yeah, absolutely. All right, Phil, let's go to a really quick break because when we get back, I want to talk about my favorite type of insurance. Only cool people have favorite types of insurance and that is income protection because the stats show us a lot about how women experience illness, how they experience time off work and recovery differently to men. And I would say it's really important but also really eye-opening so guys don't go anywhere all right phil we are back and we're talking about my favorite type of insurance do you have a favorite type of insurance

Starting point is 00:20:31 or is it just me i actually think trauma is my favorite why is it just cooler it's more novel uh no because it's it's it's quite easy to get a claim yeah i like that too but like i just love the income protection protects your income and that's like low-key very sexy yeah it's cool it's cool but like trauma trauma is like we've had this horrible diagnosis of cancer here's a bunch of cash here's some cash in your bank account see I love that but I want cash forever you know not that income protection is forever it's usually to the age of 65 just to be very clear you're not going to get it forever but like to me that feels like a long time I can still achieve my financial goals and you know what the beauty is you can have both okay I love this for

Starting point is 00:21:12 us. Let's talk about income protection because I've got some stats and I want to read them to you. You probably already know them, but as women, we have higher rates of mental health issues, especially around pregnancy. We have more autoimmune conditions. We have more chronic conditions as we hit our thirties, our forties and our fifties. We have more pregnancy and postnatal conditions that only women deal with. And what this means is it can result in women being more likely to lodge an income protection and trauma insurance claim than men. So we should be insured. So with all of that in mind, what do you think are the most important things women need to know about income protection? Yeah. So there's really two most important times when you think

Starting point is 00:21:57 about income protection. It's when you're setting up the policy and when you're making a claim on the policy. So when you're setting up the policy, what does your work actually look like at that point in time and when you claim on the policy. Now, no one knows when they're setting it up, when they're going to claim, but it's really important, especially for women to be understanding how the policies work, because some of the clauses with income protection is at the time of claim, they'll look back at the last 12 months and will cover you for your last 12 months of income. Now, if you haven't had an income, there are some features where they'll, if you're on, you know, maternity leave, they'll look back a bit further, but you know, generally speaking, it's the last

Starting point is 00:22:34 12 months. And so it's really important because men generally have the more linear working relationship. You start work and you may have some time off work, but women, it's much more broken up in terms of mat leave, part-time work. What does that look like? When it comes to income protection, it's really important to make sure every time you have a work change, if you're going on mat leave, you're reaching out to your financial advisor or you're looking into your policies that you have and going, will this cover me for this period of time? And so that's super important because again, we don't know when we're going to claim, but if we do claim, these are the things that everyone will read every, every line of a PDS when they need to claim to see if they're

Starting point is 00:23:11 eligible or not. What happens when it is time to claim? And is there anything specific we need to be aware of if we're like pregnant? So obviously like the PDS and making sure that it ticks all of the boxes, but like, should I be updating my insurer regularly or like what's the claiming process like? Yeah. So we have a lot of conversations with people going through this process and it's really just about understanding what is your plan over the next few years. Do you plan to be off work for five years because you're going to have kids in quick succession? Are you planning on taking three months off and going back to work straight away? Those two things will have a very differing outcome on what we do with your insurance. So if you are planning on going back

Starting point is 00:23:51 to work within 12 months, generally you don't need to worry about your income protection if you've set up properly in the first place, because we'll still be covered at claim anytime within that 12 month period. If you are planning on a long period of time off work, then there's a lot more questions about, okay, have you had any health events since when we took out the cover? And today, because even though at claim time, you may not get paid out a claim, you still may not want to cancel it because you may be uninsurable because of those health events that happened after the policy was in place. So again, it's a puzzle. Like it's all about putting this, you know, intricate puzzle together based on everyone's unique situation. I also want to touch on here how genuinely easy

Starting point is 00:24:28 it is to claim because I think people go, oh my goodness, I'm going through all of this and then you expect me to claim not if you have a financial advisor. So what would that look like? Like let's say I experience a very significant health event. I just call you, don't I? Yeah, pretty much. Not everyone set up their policy through a financial advisor. No, but they should have. Sorry, I mean we can't give advice. But if you have, then you reach out to your financial advisor. You know, in our business, we've got a claims team and someone who manages claims full-time. That's their job. Because unfortunately, we've got a lot of clients claiming on their, on their policies. Which is like good and bad. Like I don't want anyone to experience that, but like to prove

Starting point is 00:25:07 that it is necessary. Phil has a full-time individual that works on the claims of his clients, which tells you, unfortunately, claiming is more common than you think, even if you don't see it day to day or your friends or family have never claimed on insurance. Yeah, exactly. So in terms of like the process, just let's just get to the nitty gritty, obviously claiming on insurance, no one wants to do, but our process is reaching out to our team and we kind of just get a rough understanding of what's happened and then we'll understand, okay, is this a income protection claim? Is it a trauma claim? You know, if it's a life insurance claim, then there's a whole bunch of different forms that we need to fill in. So it depends on

Starting point is 00:25:48 the claim experience, but yeah, reach out to your financial advisor. They'll guide you through the whole process. And if you don't have a financial advisor or you don't have a relationship with them, you can reach out to the insurance company directly, but they're much less helpful. And in fact, we've had a client who reached out directly to them and the insurance company told them something that was not correct. And we got involved and that client now has $1.6 million in the bank. Oh, okay. I would love to be lied to by an insurer in that case. Before we get ourselves in trouble, let's pivot. And I want to talk about your favorite type of insurance, trauma insurance. And I think a lot of people are relatively confused about what trauma insurance

Starting point is 00:26:28 actually is. I think a lot of people think because they have like private health insurance or they already have their income protection set up that they don't need trauma insurance. So Phil, what is, and I know we've done a whole episode on this, but recap, what is trauma insurance and how is it very different to having private health insurance and income protection? Yeah. So trauma insurance is otherwise known as critical illness. Different insurers use different terms, but it basically covers like 40 odd diagnoses or conditions. So the main ones are things like cancers. That makes up 50% of females claiming is on cancer, all types of cancer. And depending on the policy, there may be different levels and stages of cancer. You may be able to get partial claims or you may be able to

Starting point is 00:27:12 get a full claim. One of my girlfriends just got a partial claim actually. And like, this is not me being like, yay melanoma, but she had a melanoma cut out of her arm, tested it. It was cancerous, but they'd gotten rid of all of it. Like very, very lucky situation. And I was like, do you have insurance? And turns out she did and got a nice lump sum payment for that inconvenience. Yeah. And this is the funny thing. Most people don't really think about like things like that. They would have just gone to their GP and gotten it cut out. She did. And super easy. And so you don't really think that, oh, maybe I can claim on these. So again, that's why it's super important to have a relationship with an advisor. Just send them an email. Hey, I had this. Can I claim on

Starting point is 00:27:54 anything? I love the claims that are like, not like your life hasn't changed at all. I want to give you cash for that. It's so fun in comparison to obviously things being a lot more dramatic. like those are the ones that I'm like, oh, this feels a little bit larger. Everyone wins out of those ones because there's no downside from a health point of view. And so, yeah, cancer is the majority for trauma or critical illness. Other things like heart conditions, strokes, MS, where it leads to a, you know, degenerative diseases like MS or Parkinson's, but you need to be pretty significant down the road with those things. But that's what trauma covers. Any major diagnosis, not every major diagnosis,

Starting point is 00:28:33 but a lot of major ones. And I've got a list in front of me because when I knew that you were coming in, I was like, I'm going to be stats queen again, because like you're the professional, but I can bring some stats to the table. So when you look at the data for women, I would say it gets incredibly clear why it's so important for women in particular to prioritize trauma insurance. So first step, one in eight women will get breast cancer. 80% of autoimmune conditions occur in women. MS is three times more common in women. Thyroid cancer is also three times more common in women. And cancer rates mean women in their 30s and 40s are one of the highest trauma claiming age groups, which a lot of you are going to be like, oh my God,

Starting point is 00:29:20 like I'm in my 30s or I'm in my 40s and I've never seen my friends or family do that. That doesn't mean it's not happening. You just haven't seen it. And thank God, that is a good thing. So what do women specifically need to understand about trauma insurance? The Australian way of living is she'll be right. It's not going to happen to me. And I think that you don't actually need to look too far. If you just spend a bit of time thinking, do I know anyone in my life who has had cancer, has had a diagnosis or a scare in some regard? I'm going to guarantee almost every listener over the age of 30 will have someone in their life close to them who is under age 60 who has experienced that. It is so prevalent in Australia. And this trauma insurance is,

Starting point is 00:30:06 as you said, women are claiming on it more than men are. And it's super important that we have this policy in place. Income protection being your favorite insurance is super, super important. Cool people have favorite insurances, Phil. Don't say it like that's not your entire career. And the reason why trauma is my favorite is because it is generally the simplest. You pay a premium. If you have a diagnosis and we can prove it, which the doctors will prove it anyway, because they want to diagnose it, then we get a check. You know, we don't actually get checks. It just gets deposited in your bank account. But like old school, it used to be a check. It used to be a check, but it's just money in your bank account. And the relief that people

Starting point is 00:30:44 feel of just going, I don't need to stress or worry about going to work or going into debt or does my private health insurance cover me or not? People often think I've got private health insurance. That covers cost. Trauma insurance just gives you money in the bank account. You can spend it on whatever you want. There is no obligation to spend it on medical bills. You could do whatever you want. You can pay down your mortgage with it. Yeah. And that is very sexy. But the thing I've liked about it historically is that that's that initial lump sum payment that you often get before your income protection kicks in. So like in a more dramatic situation where you have been diagnosed with a cancer and you do require

Starting point is 00:31:25 ongoing treatment. That is the parking at the hospital. It is those awful hospital sandwiches and being able to pay for them and not going further into debt and not being stressed about your mortgage repayments or, you know, the kids' school fees or whatever's coming out. And then your income protection will kick in after that. And hopefully because it was such a good lump sum payment, you've got some leftover to kind of have a little bit more financial freedom, which honestly, in those circumstances, I wish everybody would have because no one should be going into debt when they're unwell. That's the most stressful time to do it. If a woman is listening to this and they're thinking, cool story, guys, like you guys are losers. Who has

Starting point is 00:32:05 favorite insurances? And they're thinking, I don't, I don't need to worry about this. Like I'm in perfect health. My family, they're fine. And do you know what? I'm pretty sure I have insurance in my superannuation. So it's fine. What do they need to know? Well, trauma insurance will never be in your superannuation. Yeah, you don't have that one. If you think it's in your super, you're wrong. Yeah, pretty much. The superannuation insurance is amazing. We've got an incredible super system. And as a part of that, the trustees need to consider insurance for their members. And so a lot of them will have default cover. Most of those default covers will not have income

Starting point is 00:32:41 protection. So your favorite insurance is often not included. Which is low-key rude because it's like the coolest kind. And they will never have trauma insurance. That's the other thing. So trauma insurance has to be paid out of your bank account. It can't be funded through super. And so the coolest thing about insurance is most of the premiums can actually be funded through super except for trauma cover.

Starting point is 00:33:00 That has to be paid personally. And the reason for that is, and the benefit of that, is it goes into your bank account when you claim and there's tax-free. I was about to say it's tax benefit. So it's not just paid through superannuation. it's the structure of the insurance. So for example, with income protection, that would take over your income and the ATO would look at it as your income and then tax you as they deemed fit. Whereas trauma, completely isolated, all the cash is all yours and it's

Starting point is 00:33:28 just a lump sum payment. You don't claim it on tax. Taxman can't touch it. Many times we get a trauma claim and they send me an email saying, oh, how much money do I need to set aside for tax? None, it's all yours, baby. It's just the best email. It's all yours. You keep it all. I love that. The other thing about having income protection inside superannuation is you might go, well, Phil, I don't want trauma. I don't have any free cashflow. I actually just checked. I have life insurance and I have income protection. You need to read the PDSs. Sometimes that income

Starting point is 00:33:56 protection policy is not going to see you through to retirement if needed. It's usually a two-year policy, which I go, great, but what happens after year two? Like what happens in year three and four if I'm still unwell and can't return to work? And that's a really important consideration because I know that a lot of people could struggle through the first two years without any insurance and it's when life gets real serious and you're like, wow, I'm not going to achieve my financial goals. Now I'm having chats with my partner about selling our house because we genuinely can't keep trying to pay the mortgage. That's when I think if you have a long-term illness, income protection really needs to kick in at that point. So for me, just make sure you're checking them and getting in

Starting point is 00:34:43 the right situation and seeing someone like you, Phil, it doesn't mean that we take it out of your insurance. It can stay there. You just tweak it to make it work better. Exactly. Yeah. It's not a setting up through a financial advisor. It has to be paid all through cash. We can set it up so you're super fund. We don't move you super fund. You can stay with Australian Super, with ART, wherever you are, it doesn't actually matter, but they can still fund the good policies and we can set it up properly. That's tailored for you. You don't even have to touch your super. As life changes, as you become pregnant, as you do family planning, as you take a few years off work or take three months off work, whatever that looks like, we can adjust and mold it as you go

Starting point is 00:35:21 along. Yeah. You've just said taking time off work. And I think that's also an important thing to touch on when it comes to insurances that a lot of people don't know. So some superannuation funds will automatically cancel a woman's insurances that she holds inside superannuation after 16 months of inactivity inside her super fund. So if you've gone off work for 12 months and then you're like, oh, I really don't want to return yet. And you and your partner have decided maybe we'll make it two years and you don't update your super fund and you have default insurances, they are very likely to cancel those because they go well she hasn't been making super contributions for 16 months like legally they have to cancel your insurances and you will just get a note to

Starting point is 00:36:04 say hey we cancelled these they're not going to be like hey phil did you still want these they actually just cancel them and they're often very hard to get back which i would say disproportionately affects those on extended leave which are usually women 100 yeah i mean this is this is protecting your super legislation that was brought in you know 2019 and it says that super funds are legally have to can your insurance policies if you don't contribute within 16 months some super funds actually make it even 12 months because if they go over 16 months then they bridge their obligations so they've gone let's actually create safety net for us as a super fund and we'll cancel it 12 months yeah and they can do that because it's in your terms and conditions it's

Starting point is 00:36:49 in your PDS for your insurance, which let's be honest, you and I read because that's really fun nighttime reading, but nobody else is reading their PDS or the terms and conditions of their super fund. They just go, I've got money in there. I've got insurance. Great. Tick box. Let's go. But then nobody's thinking about their insurances once you're 11 months into your mat leave. Like it's just not your priority. Yeah. And they own the contract. They get to say whatever they want. You just are an insured person within their contract that they control and adjust. And so again, you know, I'm glad we've got another three hours to talk about insurance inside Super because they can adjust it and change it as they see fit. Can we just continue this over lunch?

Starting point is 00:37:28 Last question. Last question. I'm hoping that most of our audience is now thinking, oh, I probably need to sort my insurances out. What's the best next step? So reach out to a financial advisor. Just going to tell you to go see him. You can come to Sky for sure, but I would recommend speaking to a financial advisor who specializes in this space. And this sounds like a big sales pitch for sky but it's it's not i pipe this junk all the time i'm like even if you want to go see a financial advisor for wealth creation go and see sky first set up your insurances and this is not me because i like you it's because it's actually the best like the most financially viable option because any other financial advisor will see insurances as a

Starting point is 00:38:09 hygiene factor they will see it as go tick all of those boxes but they'll charge you a couple of grant on top of your SOA to include insurances and Sky's fees are usually under $500. Yeah. And the reason why using a specialist firm really matters is because, you know, we get discounts for our clients. Like insurers can give us benefits, but they can't give me any additional benefits. They have to pass it to our clients. So we get like loading waivers, we get discounts for our clients, but that's not actually the benefit. They can't even take you out to lunch anymore legally. Yeah. I mean, they can, but it's, yeah. You have to go to Macca's basically because no fine dining. No fine dining, that's too much of a benefit for financial advisors.

Starting point is 00:38:48 But a specialist firm will know, will ask the health questions. That is fundamentally what I believe the most important thing for anyone getting insurance is start with having an understanding of your health history first before recommending a product. If anyone that you go to is saying this product's the best because it's the cheapest or because it's the easiest for us to work with, for me, that's not the right answer. The right answer is this is the right insurance company for you based on your individual health history. Because, you know, two individuals having the same occupation, same age, same everything else may have a different health history and same diagnosis may still get a different outcome. And so, yeah, working with a specialist firm who

Starting point is 00:39:26 really investigates your health history first is super important. Agreed. Like literally couldn't agree more. Now, our community has been listening to us, Yap, for I would say about 40 minutes now. And I reckon that's their cap on insurance conversations. It is not our cap. So we're to continue this offline and maybe brainstorm some other ways we can get Phil back on the pod this year but Phil thank you for joining us again today thank you for letting me talk insurance what our favorites were drop that you used to be in the circus literally no one breaks it down as well as you do and our community absolutely loves you for it so I'm very grateful and guys obviously a very shameless plug if you want to chat to Phil or the team at Skywealth about getting your own safety

Starting point is 00:40:08 net sorted. I'm going to make sure that all of the links are in the show notes for you. It's all going to be very clean and clear. You can just stalk them on socials as well. That's a good idea. And if you've learned something today, please make sure that you hit subscribe so that you never miss an episode. All right. Thank you, Phil. And goodbye. We will see you guys on Friday. Thank you. the advice shared on she's on the money is general in nature and does not consider your individual circumstances she's on the money exists purely for educational purposes and should not be relied upon to make an investment or financial decision if you do choose to buy

Starting point is 00:40:49 a financial product read the pds tmd and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN 321 649 27708 AFSL 451 289.

She's On The Money - How Being a Woman Changes Your Insurance (and Why We End Up Claiming More)

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