Engineers are trained to find the fault in the system before the system fails. But according to Marcello Bertasso, Head of Underwriting and Claims Management at PPS Mutual, there is one category of risk that consistently escapes that analytical rigour: the personal financial fallout from a serious health event.
“Engineers are highly trained to identify, quantify and mitigate risk – structural, operational, project-related,” Bertasso said at a recent Engineers Australia webinar. “But there’s an area where even highly analytical professionals consistently underestimate their exposure, and that is the personal financial risk linked to health events.”
The reason the stakes are so high comes down to what most engineers have actually built. A 35-year-old earning $95,000 today will earn approximately $3.9 million before retirement, adjusting for CPI increases. A 45-year-old on $105,000 is tracking towards roughly $2.7 million. That income stream is, as Bertasso put it, the biggest asset most professionals own – more significant than their property portfolio, more significant than their super balance at any given moment. And yet it is the asset least likely to be formally protected.
Where the safety net has holes
Cancer affects around 17 per cent of Australians in any given year, musculoskeletal conditions affect around 13 per cent, and cardiovascular disease around 12 per cent.
What few engineers have modelled is what one of those events would do to their income, their retirement and the people who depend on them.
The default assumption – that Medicare and private health insurance will cover a serious illness – is where Bertasso started his reality check.
Almost 50 per cent of non-government healthcare spending is paid out of pocket by individuals. Those costs have risen by roughly 50 per cent per decade, and healthcare inflation has outpaced CPI by approximately 57 per cent. Hundreds of thousands of Australians now delay or skip treatment because of cost alone.
Part of the problem is structural. Medical advancement moves faster than the Medicare Benefits Schedule. Experimental drugs, newer imaging, specialist consultations and follow-up scans for conditions like cancer can fall outside what either Medicare or private health will fund in a given year. A quarter of cancer patients in Australia face out-of-pocket expenses exceeding $10,000 every two years.
Private health insurance compounds the confusion. It addresses hospital costs and some specialist fees – but not lost income, the financial drag of long-term reduced capacity or the retirement savings quietly eroding in the background.
“A diagnosis of a significant medical event can become a financial one, not just a medical one. You may survive it – but live longer with the financial consequences.”
The financial reality of a diagnosis is starker than most people have calculated. The average time off work following a cancer diagnosis is around 30 weeks. Over a lifetime, the combined healthcare costs, lost productivity and broader burden of a cancer event have been estimated at $1.3 to $1.5 million.
Underwritten cover: why the process is the protection
Sabrina Sequeira-Walmsley, NSW/ACT State Manager at PPS Mutual, said every week she was asked the difference between insurance held through superannuation, bought direct, or obtained under professional advice.
- Group cover: the default insurance most Australians hold through their super fund. It is easy to access and requires little or no medical assessment. That accessibility comes with a trade-off: it is not tailored to your individual circumstances, benefit levels may be capped, and coverage can cease under fund rules, often at the worst possible moment.
- Fully underwritten cover: This goes through a medical assessment at the time of application. Bertasso acknowledged that underwriting can feel like a hurdle, but reframed its purpose.
“Underwriting is often seen as a painful part of obtaining insurance. But the reality is it delivers certainty when it’s performed upfront. My underwriters are trained to look for reasons to accept cover – and when they do, you know exactly where you stand before you ever need to make a claim.”
Without that upfront assessment, insurers still have to manage risk – they simply do it through standardised terms, restricted conditions or decisions made at the point of claim, when the policyholder is least equipped to negotiate.
A blueprint for your blind spot
Sequeira-Walmsley closed with a practical checklist – a starting point for engineers to pressure-test their own position.
- Know what you have. Many engineers cannot name what insurance they hold, how much cover they have, or when it ceases. Start there.
- Check ownership structure. Cover held inside super means any claim is paid to the fund first, not directly to you or your family. Mismatched beneficiary nominations can delay payouts by months or years.
- Consider self-insurance. Emergency savings and retirement contributions are part of a resilience framework, not a substitute for it. Sequeira-Walmsley encouraged engineers to treat both as complementary.
- Get advice. Direct and group pathways don’t offer personal advice and don’t assess individual circumstances. A qualified adviser looks at structure, suitability and long-term fit – and, critically, manages the claims process so you don’t have to.
“Just like engineering, everything in life carries risk, and we must manage that exposure with robust frameworks,” Sequeira-Walmsley said. “
Personal financial systems are most vulnerable when life throws us curveballs – and the best time to build resilience is before it’s tested.”
To find out more about the importance of life insurance for Engineers, visit ppsmutual.com.au/engineers
