We would all prefer not to think about illness, injury or death. However, putting in place the appropriate insurance can provide you and your family with peace of mind and help protect against the 'what ifs.'
Payments from a life insurance policy can be used to pay living expenses, debt repayments, your children's education costs and assist with medical and rehabilitation costs.
The four main types of personal insurance include the following:
Life Insurance – pays a lump sum on the death of or the diagnosis of a terminal illness of the life insured. The lump sum that is received by your beneficiaries such as your spouse, partner or surviving children, can be used to pay mortgages, credit cards and personal loans. The lump sum often seeks to provide enough for the long term financial needs of your loved ones.
Total and Permanent Disability Insurance (TPD) – pays a lump sum if you suffer an illness or injury that makes you totally and permanently unable to work. You can purchase TPD cover together with your life insurance or take it out as a separate policy. The lump sum payment can be used to pay mortgages, credit cards, personal loans and provide an ongoing income stream to help with living costs.
Trauma Insurance (also known as Critical Illness Insurance) – pays a lump sum on the diagnosis of a defined specified trauma listed in the insurance policy. Specified traumas such as cancer, heart attack and stroke are typically covered together with other specified defined traumas in the insurance policy. You may suffer a serious illness or injury, but you are not totally and permanently disabled, and therefore are not eligible to claim against the TPD insurance policy. If you’re diagnosed with a defined trauma covered under the insurance policy this can help pay for medical expenses, modifications to your home and assist with income needs while you recuperate. Trauma cover is not dependent on your inability to work, it aims to provide a payment on the diagnosis of the defined critical illness regardless of your working status. Trauma insurance can be taken out as a separate policy or as part of a life insurance policy.
Income Protection Insurance (also known as Salary Continuance Insurance) – should you be unable to work due to a sickness, injury or disability, an income protection policy will typically pay you up to 75 per cent of your earnings for a specified period.
Income policies typically pay out monthly payments to replace your income. You can usually choose how long you will need to wait before the benefit payments commence and how long it will be paid for.
Your adviser is in the business of helping families prepare for the ‘what ifs.’ They are there to help families make the important decisions before anything happens.
Your adviser will look at your individual circumstances and assist you to put the most appropriate cover in place to provide you with peace of mind.
For help putting your family’s personal protection plan in place, contact one of our Specialist Risk Advisers for assistance.