Income protection without medical questions
As a tradesman you probably don’t have a lot of time for filling out forms or sitting on the phone, let alone undergoing a medical.
For this reason, the idea of quick and easy income protection or life insurance without having to answer any medical questions is very appealing.
But is it too good to be true? Is the ‘quick and easy’ option just as good as the traditional way of taking out insurance?
There are some BIG differences, and in this guide we’ll be taking a closer look at the differences which are of particular importance to tradespeople.
Existing medical conditions
We’ll start here because this is one of the biggest issues when it comes to income protection with no medical questions.
How it works is that the insurance company won’t require a medical test, and may not even ask any medical questions at all.
But they also completely exclude any existing medical conditions you have, no matter how minor they may seem.
For example if you have suffered any back issues in the past, as many tradies have, the insurer may completely exclude any claim that involves you back.
A proper income protection policy taken out through a financial adviser will be different however.
You will have to answer questions about your back issues, and may need to get a medical report, but the insurer will agree upfront what cover they will offer for your back.
They may determine that the problem is specific to one part of your spine, and only exclude that part from your policy.
Ultimately the big difference is that with a ‘no medical questions’ type of policy you won’t know what’s going to be excluded until you need to make a claim.
But with a traditional policy through a financial adviser you will have it in black and white exactly what (if anything) is excluded.
Cover options
Most of the income protection policies you can take out without medical questions will be fairly basic policies.
This means they miss out on some of the features that we have found are most beneficial for tradies.
For example the ‘day 1 accident’ option is very important for manual trade workers, however only the good quality income protection policies have this option.
Another important one for tradies is the ‘specified injury benefit’. This is also only available on better quality policies, and not the ones available through call centres.
There are many other options which are not available on these quick and easy policies, and unless you receive professional advice you may never know what they are.
And that leads us onto the next point…
Advice
When you take out a basic income protection policy over the phone or via a website you will not have any access to personal advice.
The cell centre consultant will be able to provide you with quotes and factual information about their own policy, but they won’t be able to provide you with any advice that is specific to your needs.
When you take out insurance through a financial adviser however, they are fully qualified and licensed to analyse your needs and provide personal advice.
Conclusion
There is no doubt that taking an income protection or life insurance policy via a provider who asks no medical questions is a very quick and easy way of getting covered.
It’s also true that having some cover is better than having no cover, even if the quality of the cover is lesser.
But if you’re a tradesperson who really cares about protecting yourself financially, then the preferred option should be a good quality policy obtained via a qualified financial adviser.
