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Myth 8 - ``What's The Point Of Having Life Insurance When Insurers Don't Pay Up?``

Truth:

It’s a common belief among many people that you can spend years paying life insurance premiums, only to have your claim knocked back in the end.

As with many myths the truth is quite different. According to the Risk Store, which published yearly payout figures from the major life insurers, says an average of $12.18 million per working day was handed over to support Australians in 2008.

This totalled up to over a massive $3,000,000,000.00 (3 BILLION DOLLARS) in pay outs across the different types of personal insurance cover.

PRODUCT TERM LIFE COVER TPD COVER TRAUMA COVER INCOME PROTECTION TOTAL
DOLLARS PAID $1,642,888,640 $370,116,644 $334,649,889 $697,677,939 $3,045,333,112

This enormous amount would have not been paid at all if it wasn’t for the foresight of consumers and their advisers in protection families, lifestyles, assets and businesses from the devastating effects of illness and injuries.

The Risk Store goes further to point out that their survey of claimant(s) showed that not one of them expected to make a claim on their insurance.

This gigantic total payout isn’t a one-off statistic if you’re wondering:

  1. In 2006, 10 companies PAID OUT $2,003,000,000 (2.03 BILLION DOLLARS)
  2. In 2007, 11 companies PAID OUT $2,100,000,000 (2.10 BILLION DOLLARS)
  3. In 2008, 13 companies PAID OUT $3,045,000,000 (3.05 BILLION DOLLARS)

There’s a lot of people who never expected to claim – but had to. How glad do you think the claimants and their families were to have believed and planned for the unexpected that life does throw at us.

As for the old wives tale that life insurance companies don’t pay up, well the proof is in the pudding!

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