This week marked the tenth annual R U OK Day, dedicated to raising awareness of mental health and empowering the Australian community to have more open conversations on the subject and reach out for support.
As someone who had suffered clinical depression for several years in my late 20s I am all too familiar with the challenges.
So today I will share with you some tips about how to manage your finances in a way that can help protect you and your loved ones during tough times.
Step 1. Review your income protection cover
Income protection is one of four types of life insurance (the other three being Life, Total and Permanent Disability and Trauma insurance). It pays you up to 75% of your salary while you are off work due to sickness or injury.
If you don’t already suffer from symptoms of depression or anxiety, I strongly urge you to review what cover you currently have in place to make sure it’s adequate or consider taking out an income protection policy if you don’t already have one.
This is because mental health is one of the leading causes of income protection claims, which means that if you take out cover after you have already experienced symptoms or sought treatment, you will likely face a mental health exclusion – meaning that the insurance will not pay your claim if you are off work due to mental health.
Given that the experts estimate 45% of the population will suffer from a mental health condition in their lifetime, it is important to have a financial backup plan in place.
Because life insurance is a notoriously complex area and not all insurance policies are the same, I strongly recommend you seek professional advice. Here are just a few tips about what you need to know when it comes to shopping for life insurance.
Step 2. Preserve your cover
If you are already experiencing symptoms of depression or anxiety, and don’t already have income protection insurance, it is worthwhile talking to your employer and super fund. You may find that you actually do have some form of income protection/salary continuance cover in place. If this is the case, and especially if the cover commenced before you fell ill, be careful not to close this super account, so that you don’t lose the valuable insurance.
If you are taking extended time off work due to maternity leave or another reason, check with your employer and super fund whether the cover will remain in place. In some cases, if no super contributions are received for an extended period of time, this can cause the insurance policy to lapse, unless you or your employer continue to make a contribution to cover the premiums.
Step 3. Understand the fine print and make a claim
Depending on the severity of your depression or anxiety, it may be necessary to take some time off work to take care of yourself and recover.
Before making an insurance claim be sure to talk to your doctor about taking time off work and letting them know you intend to make an insurance claim, and talk to your super fund or the insurance company so you have a good understanding of the claim process and what the terms are of your cover.
It is important to know:
- Waiting Period: how long do you have to be off work before you can make a claim?
- Benefit period: What is the maximum time you can be on claim for?
- Additional terms:
- Partial Disability – Will your insurance compensate you for loss of income if you have to reduce your work hours? (eg if you drop from full time to part time hours)
- What is the maximum number of hours you are allowed to work without affecting your claim?
- Do you have to use up your sick leave before your claim can start?
Keep in mind that depending on whether or not you were medically assessed at the time of taking out the cover, the claim process can take some time (weeks or even months). This is because the insurance company will likely require you, your employer and your doctor to each fill out forms to confirm details such as your employment details, the diagnosis, treatment, time required off work, etc.
Read our blog here on more tips on making an insurance claim.
Step 4: Be kind to yourself and seek support
The process of making an insurance claim can easily feel overwhelming, especially when you’re already not feeling your best. Try not to put it off for this reason and instead reach out for support. Your spouse or a friend, super fund, HR department, insurance company and financial adviser are all sources of support to help you along the way.
I know that when you are in the midst of it, it can be hard to see a way out, but try to remember that you are a strong, intelligent, capable woman and that this is only temporary. You have what it takes and you WILL get through this and the WWC community is here to back you every step of the way.
Natasha Janssens
Natasha Janssens is a Certified Money Coach (CMC)® and founder of Women with Cents. She is an award winning finance expert with a passion for supporting women to transform their relationship with money. If you don't know what you don't know when it comes to money and financial matters, her book Wonder Woman's Guide to Money is for you. If you would like to work with Natasha, take the Money Type Quiz and book a quick get-to-know you call.