Imagine you are out on your morning training ride. There is plenty of traffic passing but it’s no big deal, as you’ve ridden along the same road so many times before. But today a passing truck cuts a little too close and clips your right hand side throwing you into the back of a parked four wheel drive. This was exactly what happened to Michael Forbes in mid-2008.
Michael was on a training ride along Beach Road in Melbourne preparing for the state time trial championships. The accident broke his cervical spine at the C4 level making him a quadriplegic. He was transported to the Alfred Hospital and then on to the Austin Hospital intensive care unit. A tracheotomy was inserted so he could breathe and a nasal gastric tube so he could be fed. He underwent a number of operations to fuse his spine in two places and pins were inserted to mend his broken jaw. He spent three weeks in intensive care, another three weeks in the spinal unit and it would be seven months before he checked out of hospital and went home to his wife and daughter.
The physical and emotional toll on his family was enormous and the rehabilitation continues today. What Michael and his family didn’t have to worry about however was how they would cope financially. Prior to his accident Michael had put complete protection in place for his family so they could cope should the unexpected occur. “My insurance coverage has throughout been a godsend to our family that has allowed Monica to have time off work to help me through the most difficult stages of rehabilitation particularly whist I was in hospital” Michael says.
So what did having insurance in place mean for him in terms of their home, finances and also his recovery? “I was able to set up a pension fund that provides our family with cash flow enough to pay the family bills and enjoy life as best we can. Any money we earn on top of my pension allows us to have holidays and treat ourselves. I’ve been able to purchase a new home that more adequately meets my accessibility needs as well as a motor vehicle with modifications that will allow me to drive. We have no mortgage.” Michael says.
What would have happened to Michael and his family had they not had any insurance in place? Michael’s says “At the time of my accident we still had a mortgage. My wife would have had to go back to work full-time in order to meet our family bills. With the insurance cover that we had she was able to put her work on hold and be with me in hospital. The mortgage was taken care of so we did not have to worry about the financial impact of my accident. We were able to focus solely on my recovery”
Depending on how serious it is, an accident on the bike could leave you off work for an unknown period of time. In Michael’s case” I didn’t work at all for the first four years after my accident. I then began doing some volunteer work just one day a week (spread across the whole week). Now I work about a day and a half week as well as being an active part of committees at my daughter’s school. I have no financial need to work.”
If this sounds like something that only happens to other people, take a look at the statistics. According to the Amy Gillett Foundation, in 2011 there were 35 bicycle riders killed and a further 9,577 injured. And while membership of Cycling Australia, MTBA or BMX Australia includes some basic insurance, it is just that – basic. Don’t think you can rely on it to cover your mortgage or rent, living expenses for long let alone medical or rehabilitation costs.
What type of cover should you be thinking about to make sure you and your family are protected?
Income Protection Insurance – provides a replacement income of up to 75%-80% of your current income if you are unable to work due to illness or injury. It provides a monthly benefit, can cover you for short or long periods and offer various waiting periods to suit your needs. Depending on your policy, the payments may continue until age 65 if the disability is ongoing or permanent.
Life Insurance – pays a lump sum on your death or the diagnosis of a terminal illness. So if the worst happens, you can ensure that your mortgage and other debts will be paid off, provide for your children’s education and maintain your family’s lifestyle. This will allow your family to focus on supporting each other, not worrying about paying the mortgage and other bills.
Total and Permanent Disability Insurance – pays a lump sum if you become disabled and are unable to ever work again. You can use this lump sum to pay off debts, cover medical and carer costs and invest so that you have an annual income to help maintain your lifestyle.
Trauma Insurance (Critical Illness Insurance) – pays a lump sum on the diagnosis or occurrence of one of a list of specific injuries such as major head trauma or illnesses such as heart attack, cancer or stroke. It provides you with choice and flexibility at a time when you need it most. You will be able to reduce your working hours, spend time with your family, get treatment or rehabilitation and pay for a carer and any number of unexpected things.
As Michael says “my insurance coverage allowed Monica and Ashley to be with me during the most difficult and trying times of my injury and continues to benefit me to this day. This is how it should be.”
You can read more about Michael’s journey here http://michaelforbes.org/
Dave Rae is a CERTIFIED FINANCIAL PLANNER® and passionate cyclist who specialises in life, disability, trauma and income protection insurance for cyclists – road, MTB, from weekend warriors to the serious.