What is personal insurance?

Personal insurance provides cover against risks to your person including death, injury or illness. It is usually taken out to ensure your family is provided for if you die or are no longer able to earn an income. The following information is provided to help you decide whether you want or need personal insurance. Think about it as part of your normal financial planning, not just at deployment time.

Automatic protection for ADF members

As an ADF member you have statutory (legislated) entitlements that automatically entitle you to military compensation administered by the Department of Veterans Affairs (DVA) and death and invalidity cover through your superannuation (if you are serving full time or in certain other service categories, and/or have preserved superannuation entitlements).

Many ADF members find that their statutory entitlements are adequate to meet their needs. However, you may decide that, due to your particular circumstances, you and your family need extra cover.

Additional cover

To work out whether you need extra cover through personal insurance, you’ll first need to understand the cover you already have; and then work out what your dependants would need each year if you could not earn an income. If there is a gap, you might want to consider additional insurance.

For information on your current entitlements, visit www.dva.gov.au/benefits-and-payments and www.csc.gov.au.

Our videos on military superannuation (covering MSBS and DFRDB) and the new ADF superannuation arrangement also contain easy to follow explanations and examples of the cover provided.

War and warlike exclusions

If you decide that you need or want extra cover, be aware that most life insurance policies contain ‘war exclusions’, which usually apply more widely than just in war. This means that the cover may be void if something happens while you are on deployment or engaged in other activity defined as ‘war-like’, which may include military exercises or training in Australia. Even if you are applying for a new insurance policy that does not contain these exclusions, the insurance company might not agree to accept you because of the nature of your ADF duties. You may have to have cover in place before receiving a notice of deployment in order to be covered.

Life insurance policies available in Australia that are understood to be free of war exclusions include:

• Defence Health – which offers the Clearview Life Solutions life insurance policy issued by Clearview.
• Navy Health – which offers the Ezicover Life Insurance policy issued by Zurich Australia.

You should confirm this in writing before taking out a policy as the terms may change from time to time.

Where you have a policy you purchased prior to receiving formal notice of deployment, the insurance company may continue to cover you even if your policy contains a war exclusion. However, it is strongly recommended that you consider whether a policy containing a war exclusion is appropriate to your needs and if you find yourself with such a policy:

• disclose to the insurer that you are being deployed
• get written confirmation from the insurer (before you leave) that you will be covered.

Reservists

If you are a reserve member who is on duty, including continuous full-time service (CFTS), you may have superannuation arrangements outside of the ADF that include group life, invalidity or income protection insurance coverage. These may also contain war and war-like activity exclusions.

Check with your fund to find out how your service in the ADF will affect your insurance cover. If your fund (or insurer) agrees to continue to cover you whilst you are doing ADF service you should ensure that you get it in writing and inform your next of kin.

Action:

• For help in calculating your life insurance needs, use the Life insurance calculator, available on the MoneySmart website.
• Visit dva.gov.au and www.csc.gov.au to find out your current statutory entitlements.
• If there is a gap, consider applying for additional personal cover.