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Case studies

What would happen if you couldn't pay your mortgage?

Towards the end of last year, John*, who's in mid-40s found out he had prostate cancer.

Under his Life Mortgage protection policy he had cover which meant that he had some money coming in while he was having treatment in hospital.

The standard Mortgage Protector cover is designed to pay out a lump sum (usually to pay off balance of the insured person's outstanding mortgage balance), upon the event of a death.

But John had chosen to buy extra benefits under his Mortgage Protection policy. he had done that in the form of Income Protection cover, which meant that if he was to get ill and unable to work for an extended period of time he'd still receive an income.

Which is exactly what happened. The money that the family received while John was ill was a lifeline, which meant that after the stand-down period, they had enough money to pay some outstanding bills, and keep the 'wolf from the door'.

John also added the waiver of premium benefit. This meant that once his Mortgage Protection claim had been placed, any premiums paid during the assessment period were refunded when the claim was accepted.

While John received the Income Protection benefit, the insurance company continued to pay the premiums.

Now, John is back at work, and his consultant has told him that the cancer has been excised completely.

*Names and personal details changed to protect privacy.

Benefits of Life Care come when needed most

About three years ago, Lorraine* (who now is in her mid 60's), found out she had colon cancer. Fortunately, her Life Care policy paid out a lump-sum payment as a result.

15 months later Lorraine received a second cancer diagnosis, and made a second claim on her Life Care policy and within a month she was paid another lump-sum.

Just over a year after the second claim was settles, Lorraine's doctor gave her the devastating news that cancer had spread and was terminal. This meant that Lorraine was entitled to a further lump-sum benefit under her Life Care policy, when she needed it most.

*Names and personal details changed to protect privacy.

You just never know when the unexpected will strike

Dave* and Anne* had a full financial needs analysis conducted with their financial adviser at the beginning of June. The analysis highlighted that although they were doing extremely well financially, with both earning excellent salaries and their home nearly paid off, their financial plan would be derailed if they were unable to work or suffered a major event.

Their financial adviser recommended they transfer this risk by adding appropriate trauma, total and permanent disability and income protection insurance to their existing life covers which would cover a range of risks and scenarios that could severely affect their lifestyle.

The recommended insurance cover included:
  1. Life insurance: Lump sum payment if either of them died, which would be enough to pay for their children's education and clear and outstanding debts.
  2. Trauma and Total and Permanent Disability insurance: A specified lump sum would be paid if either of them suffered a trauma event or became totally and permanently incapacitated - and therefore unable to earn a living - through injury or illness.
  3. Income protection: A plan that would pay a monthly income should they be sick or disabled, in this case to age 65. 
Five weeks later Dave had a stroke. Unfortunately even though they agreed with the final report and wanted to take out the suggested covers, they had procrastinated and had not put the insurance in place. It was now to late!

Now not only can Dave not work but Anne's work is also severely affected as she has to travel a long distance to hospital to be with her husband. If they had purchased the insurance cover that their adviser had recommended to them weeks earlier, they would have had a lump sum trauma payment immediately, then a regular income under the Income Protection insurance.

*Names and personal details changed to protect privacy.
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Futureproof Life is a family owned business specialising in risk management & lifestyle protection solutions for businesses & families.
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Phone 09 413 6070