Let's break it down!
Who needs it:
Nearly everyone that is working needs at least Income Protection insurance, and ideally this should have a benefit period which runs until age 65 to fully protect you until retirement.
Most people also require TPD and Trauma insurance unless they have significant amounts of wealth to rely on in the event of a disability or serious illness.
Most people need Life Insurance if they have dependants (such as a spouse or children) who rely on their income for living expenses and to help pay the mortgage.
What is it:
There are four main types of Life Insurances:
Life Insurance: If you pass away, your family/beneficiaries receive the insurance lump sum.
Total and Permanent Disability (TPD) Insurance: If two doctors sign off that you are TPD and unlikely/unable to work again, you are paid a lump sum.
Trauma (also called Critical) Insurance: You are paid a lump sum if you develop a specified critical illness condition (for instance, cancer, a heart attack, a stroke and many more).
Income Protection Insurance: You are paid a monthly benefit for as long as you are medical unfit to return to work, up until the benefit period expiry duration to replace a portion of your salary.
Where can you get Life Insurances:
Most super funds provide a very small amount of 'default' insurance (typically Life & TPD, and sometimes also income protection). Default Insurance means it has been provided without having to complete medical questions. In most cases, these 'default' amounts are much less than the actual amount of insurance someone needs to protect their family and lifestyle.
You can also get retail insurance through a Financial Planner. This typically means you have to answer some health questions however, the cover is usually:
A higher quality on a like for like basis
Cheaper on a like for like basis
Allows more tailoring and flexibility - for instance to also cover you for trauma insurance or opt to pay for income protection premiums personally which can provide a higher tax deduction.
Why do I need life insurance:
As a Financial Planner, it is a blessing and a curse that we are often involved in insurance claims for clients. It is a curse because it is sad when someone's health requires an insurance claim, however, it is a blessing that we can relieve the financial pressure from families who are already dealing with the emotional toll of an illness.
If you don't have an adequate amount of insurance in place, not only could your future goals be at jeopardy, it could also mean:
Having to ask family members for money
Selling your home
Changing your lifestyle
Your spouse needs to work more than you would like to cover your lost income
How do I get my insurances organised:
Book in an obligation free initial appointment with us today! We help clients with the following:
We calculate how much Life Insurance, Total & Permanent Disability, Income Protection and Trauma insurance that you need based on your individual variables such as age, income level, mortgage size and number of children.
We analyse the cost and quality of your current insurer against a range of insurers to find you the best product.
If you have any pre-existing health conditions, we can source the best insurer and structure for you.
If you ever need to make a claim, we will support you through the process and act as your representative in processing the claim with the insurer.
Through this four step approach, we can provide peace of mind that you have the right amount of cover whilst also typically saving you money and/or providing you with a better quality policy.
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