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Underwritten versus Default Insurance: Ensuring Peace of Mind

General Insurance

When you pay for life insurance premiums, you deserve the peace of mind and security that comes with knowing your policy will protect you and your loved ones when it matters most. The last thing you want is to face unexpected obstacles or a denied claim during a critical time. This is why having confidence in your Life Insurance, Total and Permanent Disability (TPD), Trauma, and Income Protection Insurance cover is essential. After all, you are investing in these policies to ensure you are adequately insured.

The Importance of Completing Your Underwriting Upfront

One of the key benefits of underwritten insurance is the upfront completion of the underwriting process. This means that from the start, you will know exactly what your policy covers. If you have any past health issues that could affect a claim, an underwritten policy will clearly outline any exclusions. This transparency allows you to understand your coverage fully and avoid surprises later on.

Once your policy is underwritten, any future changes in your health or occupation will not impact the original terms of your contract. This means that unforeseen circumstances will not negatively affect your insurance cover or premiums, providing you with long-term stability and security.

Timing of Claims Assessment: A Crucial Difference

The timing of the claims assessment is a significant difference between default insurance and underwritten insurance. With underwritten insurance, the assessment is done upfront. Your policy is either accepted with standard terms or with special terms, which are clearly outlined in your contract. This applies to Life Insurance, TPD, Trauma, and Income Protection.

In contrast, default insurance, often provided automatically through super funds, is assessed at the time of the claim. This can lead to uncertainty and potential difficulties when making a claim. If you are in good health and younger, it may be more beneficial to secure an underwritten insurance contract. This proactive approach ensures that you are not paying for insurance that might be challenging to claim or could be denied when you need it most.

Conclusion

Choosing between underwritten and default insurance is a critical decision that can impact your financial security and peace of mind. By opting for underwritten insurance, you gain clarity, stability, and confidence in your coverage. Understanding the terms and conditions of your policy upfront allows you to make informed decisions and ensures that you and your loved ones are protected when it matters most. Investing in underwritten insurance is a proactive step towards securing your future and avoiding the pitfalls of default insurance policies.

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General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Morgan Insurance Brokers, ABN 28 628 815 074, AFSL 327131

This article originally appeared on Underwritten versus Default Insurance: Ensuring Peace of Mind and has been published here with permission.