Today was the second deep dive into my personal finances, and I hated it. I had a throbbing headache halfway through, and to his credit my planner brought in chocolate and potato chips because he’s aware that concentration can be tough to hold. The reason for this need for sustenance, in the middle of a meeting, at 3pm? Insurance.
My only experience with insurance is pretty much on my car. I don’t have anything else insured. And with the car it’s a fixed thing – fully comprehensive for X, third party for Y, and it lasts for 12 months. It’s not complicated. I don’t have to think about it for another year until the letter arrives again, or I drive into a wall. If I was driving home from this second meeting, I may very well have done just that.
Talking about insurance when you’ve never considered it is a tough thing to do. It’s not that the terms are hard to understand – trauma is trauma, death or permanent disability is what it is. If you’ve watched 4 Corners recently you’re probably even more aware of what they all are than someone
who hasn’t.
It starts easily enough. How much do you want for permanent disability? I don’t know. How about $100,000? Okay. How much do you want for trauma? I don’t know, I’ve never thought about it. Well, [explanation ensues]. I still don’t really know. Let’s put $100,000.
Not dead yet
Fifteen minutes later and I’m considering if I should have a regular payout for my child to cover the cost of a nanny if my wife needs to work but it’s before the kid is at school and I’ve been incapacitated but I’m probably not dead but maybe I am.
Then I need to think about how many years I’d want to cover university for her. I hope she doesn’t set her sights on Medicine if I’m not around because some insurance provider is only going to cover three years of uni. Does that make me a bad parent? Do I already assume my daughter won’t be academically focused, like her dad? Maybe.
But the throbbing became too much. I looked at the two or three scribbles on my notebook and up at the adviser, and said: “I don’t know what’s going on with all this. I don’t know how it all interlinks; I don’t know if this will cover that and if I don’t tick a box then that won’t kick in until this happens and according to 4 Corners if there
isn’t enough of that stuff in my blood then the heart attack won’t count anyway”.
He said he knows how it feels. He explained that other planners have a much simpler way of ascertaining a client’s insurance needs but it often ends with them not having the cover they want, or really need. He was at pains to tell me that he will go to get cover options, and then we’ll work through them and he can explain how it all works. He seemed confident and I expect it will be fine, but I really struggled with it.
Mind boggling array of options
I know I need insurance, and I know that I need insurance now, while I’m healthy and earning good money, and not when I’m wheezing and struggling and can’t rub two pennies together.
The language makes it seem like yes, of course I want to lock in trauma that activates again after 12 months with no need for further medical documentation. But I don’t know.
The thing is that this journey down the road of financial planning is all still an expense for me and my family, and one that is new and relatively unplanned. As I’m answering the questions I have no idea if I’m adding zero after zero, so to speak, to what will be my premium.
And that’s worrying me, even though it shouldn’t. I should get the cover I need and whatever it costs, that should be acceptable. I don’t think the current expose on the life insurance industry is helping me, and I’m sure it’s not helping many other people.
I think there’s something to be said for helping the client with understanding how cover interlinks. Maybe that will come next time, with the Statement of Advice (SoA) I’m due to receive. Maybe I’ll get the gist of it then.
“Maybe” isn’t the word I thought I’d be using, though.
