WorkCover: A substitute for Life Cover?

Most employees are protected with WorkCover, which compensates employees in the event they sustain injuries or become ill because of their occupation. Employers pay the premiums and the policy usually comes with specific medical benefits. With the availability of WorkCover, most employees do not see the need to insure themselves further with a life cover policy, which can be more comprehensive. This perception exists because a layperson usually does not understand the difference between WorkCover and life cover. However, there are a number of reasons standalone life cover can be a good addition to WorkCover.

WorkCover is limited to work-related injuries

WorkCover only compensates employees for work-related injuries. In other words, should a person encounter or develop medical or health problems that are not due to the job, he or she is not entitled to make a claim for all the medical benefits available under WorkCover.

Life cover becomes even more relevant when you consider the statistics demonstrating that occupational hazards contribute to only approximately 25% of injuries a person could suffer. Most people sustain injuries during recreational activities, sports and when at home. Therefore, you are more likely to get hurt from other activities in places other than the workplace. In view of this, life insurance that provides reasonable compensation for injuries sustained due to accidents and undesirable events that may occur anytime and anywhere is a worthwhile consideration.

Limited claims avenues

WorkCover compensation differs between states. Some states provide cover that includes all medical expenses for job related injuries, while other states may limit the reimbursement. Payment of claims would generally be subject to a capped value, which may not be enough should an employee’s medical condition require very costly treatment and long-term financial commitment.

An employee who depends only on WorkCover is depriving him or herself of better, or even adequate medical treatment that would make the difference between recovery and being constantly ailing. For this reason, salaried employees who already have WorkCover should consider buying trauma insurance as an investment to protect his or her health. When needed, the policyholder will receive a lump sum benefit that can be used to settle medical bills and expenses. Adequate compensation is important so that a sick person can concentrate on recuperating without worrying about work or financial problems.

WorkCover only applies to work

A salaried employee who works an average of 40 hours per week will be estimated to have spent 20% of his or her life on the job. Twenty percent is not a very long span of time to insure when you consider the mischief people can get up to outside the office!

The more financial obligations a person has, the greater the need for insurance other than WorkCover. The effect of health problems, injuries or disabilities is immediate, as you will lose your source of income/ability to work. Life cover is a complement that can compensate for cover that WorkCover does not provide. Most working individuals have financial commitments such as mortgages, loans, children’s education, and monthly bills.

During these times, disability insurance, income protection insurance or trauma insurance can help a policyholder meet various financial needs. The bills will be paid, and the person can maintain their lifestyle with their life cover benefits. Life insurance also extends to family members through term life insurance. Death cover will take care of dependents’ financial needs in the event of the policyholder’s untimely demise.

Lack of personalised options in WorkCover

WorkCover cannot be customised according to personal needs, as it is a statutory scheme with limitations. When you purchase a life insurance product though, you get to decide on the waiting period, benefit period, agreed value benefit and other benefits according to your budget and financial standing. These options are not possible with WorkCover, limiting an employee’s benefits and access to better compensation.

Difficulty in getting compensation

There have been accounts of employees failing to receive due compensation from WorkCover. As WorkCover compensation also takes into account factors like management, there is a chance that employees might not be compensated solely based on medical condition. There are also cases of employees taking their case to court for claim disputes against WorkCover. This provides added physical strain to an existing medical condition, and costs money and time to resolve.

With regard to these limitations, WorkCover is not a substitute for life cover. A person’s life is worth more than WorkCover can manage. Life insurance provides comprehensive coverage that helps a person out when they are most in need.