Families can rapidly fall apart when the breadwinner dies without enough life insurance to take care of debts and other commitments.

Andrew, a state sales manager, lived with his wife, Jenny, and children Daniel and Isabella, in a leafy Adelaide suburb.

Andrew’s family was devastated when he suffered a massive heart attack and died suddenly late one night while getting a glass of water.

Like so many Adelaide couples, Andrew and Jenny’s finances were highly geared, including a substantial mortgage. Wanting the best for their children, they’d enrolled Daniel and Isabella in reputable private schools close to home.

With Andrew’s substantial salary no longer there to support the family’s former lifestyle, Jenny was forced to make some drastic decisions. She sold the family home, took the kids out of private school and relocated to rent in a more affordable suburb in Adelaide’s North – a long way from their former neighbourhood and support networks.

Some options and issues to consider

• No-one copes too well with the sudden transition, least of all Jenny. Having lost the love of her life and without friends close by to lean on, a black cloud descended over Jenny.
• The three biggest shocks families face when the breadwinner dies.
  1. Becoming Emotionally stranded.
  2. The financial shock
  3. The reorganisational shock
• Much of this stress could have been avoided had Andrew died with enough life insurance to support his family’s lifestyle.
• "Life insurance is a gift that with any luck is never given."
• Life insurance can mean the difference between a family getting on with life after the death of a parent ~ OR seeing a family disintegrate.
• Don't leave your family’s future wellbeing to chance.

As a self-employed architect, Mike viewed tight deadlines and long hours as just another part of his job. By age 40, he had worked hard to reach his position and was proud of both his achievements in the industry and the quality of lifestyle he was able to provide for his family.

Mike preferred to think about his next challenge rather than the pressure he was under. He didn’t consider his eating-on-the-run, lack of exercise, early starts / late finishes to be worthy of concern. These, however, were the reasons given for Mike’s heart attack at age 41.

Mike had protected his income against disability. So the four weeks spent in hospital were covered, but only by 75% of his normal salary. Where normally his mortgage had accounted for 30% of his income, it now required 40% of his income. He had other expenses that had to be met as well.

Given what had happened, the financial strain imposed on Mike was the last thing he needed and was detrimental to his recovery. His family’s savings were eroded by numerous bills and funding the gap between normal income and the lesser income Mike’s insurance provided.

Some options and things to consider:

• Mike could rush back to work when not medically fit to do so and subject himself to a possible second heart attack.
• His family could start selling assets and reduce their living standards.
• Trauma Insurance would have provided Mike with a lump sum payment to clear his financial concerns and allow him to commit all his efforts to recovery.
• Trauma Insurance would have maintained the family’s lifestyle and given them opportunity to be debt free. Mike could then have had the opportunity to take as much time as needed before returning to work, including the option of changing to a less stressful career.

Mary is 42 and owns her own hairdressing salon. Her husband is a branch manager for a tyre company. They have a 5-year-old daughter who starts primary school next year. Like many people, they have a mortgage and business overheads to cover, as well as expenses and bills.

Mary finds a lump in her breast. Tests establish the tumour to be malignant and an operation is required. The extent of the growth is small and only requires a partial mastectomy.

Hospitalisation is only nine days, but recovery, both physical and emotional takes much longer. Mary is still tender and emotionally down after six weeks but the bills are mounting up and her apprentice is struggling at the salon, with a resulting downturn in business.

Mary is forced back to work.

Some options and things to consider:

• Trauma Insurance would have provided a lump sum payout on the diagnosis of malignant cancer, giving Mary the opportunity to be free of money worries and use her energy to recover properly. The lump sum could have been used to pay out the mortgage, hire temporary help at the salon or take a recuperative holiday to recover fully from her trauma.
• Income Replacement and Business Expenses Insurance would have provided an income stream and covered most of Mary’s business expenses whilst she was too sick to work.
• Breast Cancer is more likely than any other cancer to affect women at early ages. It is the most common and single largest killer of women aged 30–60 in Australia.
• Every day in Australia almost seven women die of breast cancer, however more than 50% of cancers are cured

Rod is a prominent barrister. His courtroom techniques and success make Rod very popular which helps justify his high fees.

Rod is a family man and ensures that his wife and children have the best of everything. They have a large home in a good suburb plus a beachfront holiday home. He takes the family on an overseas holiday each year and the children are educated at private schools.

Rod recognises the need to protect the lifestyle he provides for his family and takes out Trauma Insurance and Income Replacement Insurance.

Two years later, Rod suffers a catastrophic haemorrhage in the brain - a stroke, which leaves him with a speech impediment and restricted movement in one leg.

Rehabilitation and speech therapy is a slow process, but in any event Rod will never be the same in any courtroom again. His thought process may still be quick, but tragically, his speech is now very slow and slurred. His chosen career is finished.

Trauma Insurance provides the funds to pay out his two mortgages, cover the negatively geared exposure, and provide a residual amount to invest. Income Protection Insurance provides him with an income stream.

In time Rod may return to work doing less prominent legal tasks, but at least he can rest assured his children can continue their private education. Their family lifestyle has also been protected.

• Salary continuance through superannuation covered 75% of Rod's salary for up to two years, allowing the children to continue on at private schools.
• An Income Protection policy (the premium is tax deductible) has covered Rod for up to 75% of his own occupation for periods up to age 65, ensuring a reasonable quality of life as he is unable to carry on working as a barrister.
• Without this cover, not only is the quality of their children's education put at risk, but also their lifestyle right through until retirement and beyond.
• Trauma Insurance has maintained Rod’s family’s lifestyle and given Rod the opportunity to be debt free.