The Barefoot Investor has been described as the "Biggest Finance Cult" by Mammamia! For the most part, Scott Pape's advice is incredible however there are five key things he has missed when it comes to personal insurance.

Before you follow Scott's advice of just calling your super provider, check out these five key gaps and make sure you are making the best decision for you based on all the facts.

Where is the Trauma Insurance?

I love Scott's mantra of "not insuring for anything that doesn't kill you financially"

For this reason, the fact that he doesn't discuss the risk of you having a heart attack, being diagnosed with cancer or having a stroke really surprises me as statistically, it is the most likely of any of the insurance events.

In fact, about 1 in 3 women and 1 in 2 men will suffer from one of the events listed in a Trauma Policy in their lives!

Here is a quick video for you to see what other "everyday" things have the same likelihood of these claims.

Unless you have $250,000 or more in your Mojo Account AND you are prepared to spend this on doing whatever it takes to get better, not considering Trauma Insurance is a massive gap in having a solid backup plan.

Income Protection before kids and debt IS required!

This question came from a reader "Ro", I find it hard to believe that even before kids, there is no need for Income Protection.

Considering that lifestyle is one of the most important things to protect, the only solution to not having to alter your lifestyle is to either continue to get paid or have a massive pot of money that will cover you for the rest of your life.

The most common thing I see for people who don't have Income Protection is a massive change of lifestyle and a dependence on family eg moving back home with parents.

Not something you want to do? Didn't think so. be selfish and protect your lifestyle by considering Income Protection as part of your backup plan even before kids.

Certainty of Agreed Value Income Protection

There are two ways to have your Income Protection structured. Depending on the way you earn money, this can have a massive impact on your ability to claim should the need arise.

If you are an employee and your income is really consistent then an indemnity contract is fine for your needs.

If however, you are an employee who has bonuses or commissions that fluctuate or you are self-employed, an agreed value policy is crucial to give you to the confidence you will be entitled to claim the benefits you have been paying for.

A premium structure that saves you thousands

One of the beliefs that I have is to plan for the long-term where it makes sense.

The way to plan for the long term when it comes to your insurance is to consider how long you are likely to hold each of the different types of cover for and whether the need for the insurance is likely to increase or decrease over time.

How long are you going to hold the insurance? For Income Protection and Trauma, these policies which are typically needed for most of your working life.

On the other hand with Life Insurance & TPD, the needs typically spike earlier and reduce over time.

The reason this is important is that you can save thousands of dollars over the long-term by setting these different policies up factoring in these details.

Check out this video here for more info about this.

Own vs Any Occupation TPD

TPD claims are some of the most difficult to achieve. I have successfully helped only four people in the last 14 years with their TPD claims (ridiculously low compared to the other types of insurance).

Truth is, you can significantly improve your ability to claim on TPD by making sure you have the correct policy in place for you.

Generally speaking, you will have an "Any Occupation" TPD policy. To claim on this, you need two Doctors to confirm you will never work again in any occupation you are qualified by education, training or experience

"Own Occupation" TPD policies though require two Doctors again to confirm you will never be able to perform the duties of your current occupation.

I am sure you can see how this could significantly impact on your ability to claim.


I love Scott's sentiment of only protecting the things that can kill you financially.

From my experience, not considering some of the points I have mentioned can put massive pressure on you financially when not considered.

If you want to know exactly how much insurance you need, I have built a ChatBot that will get you a personalised report. This will take you less than 5 mins to complete.

Click here to get started.

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