INSIGHT INTO INSURANCE
Matt Ireland from our Financial Planning team writes about the importance of considering the right type of insurance for peace of mind, here’s a snapshot of his insight.
Is it time you had a look at life insurance?
Often the value of life insurance is difficult to understand. Life cover is a simple financial product that will pay your family a sum of money if you were to pass away. It can be hard to justify paying for life insurance as it’s ideally something that you will never have to use. However the security it provides can drastically improve the quality of life of your loved ones.
How does life insurance ownership work?
You can apply for life insurance both outside of super as well as within your super fund. Sometimes Super funds will automatically give members default cover. This is a basic level of cover that doesn’t require you to undergo any medical tests or health checks. These policies can be inexpensive and beneficial to some, however many have complex terms and conditions that you need to be aware of. You may also choose to apply for a customised level of cover and undergo a process called underwriting which involves medical checks and health questionnaires aimed at assessing the likelihood that you will make a claim on your insurance. These policies are often far more comprehensive however can sometimes result in extra charges or certain medical issues being excluded from the policy.
Total and Permanent Disablement (TPD) Insurance
TPD insurance is designed to help you meet one-off and ongoing living expenses if you were to become totally and permanently disabled. This cover can also assist in meeting additional medical costs associated with your condition. This cover can be difficult to claim upon unless you meet strict eligibility criteria. TPD cover needs to provide for you and your family in the event that you cannot ever work again and can be held inside or outside of super however the terms and definitions of each type of ownership can vary significantly.
Why you need Income Protection
Obtaining Income Protection is one of the most important financial considerations you will make. Many people who remain healthy throughout their working lives will never actually realise the benefits, however speak to anyone who has relied upon this cover and the message will be the same. Income Protection should be first and foremost on any financial checklist. We insure our cars so that we can drive to work and we insure our tools so that we can perform once there, but so few of us insure the actual source of income generation that matters the most. Ourselves.
What is Trauma insurance?
One of the lesser known insurances, Trauma cover provides you with a sum of money immediately upon being diagnosed with a specific illness or suffering a traumatic event. These conditions can range from different types of cancer, diseases or heart attacks. You are usually insured for a smaller sum of money when compared with life or TPD cover as Trauma is intended to cover the immediate medical expenses such as surgeries, home modifications or the purchase of mobility devices. It can be difficult to work out how much Trauma cover is enough and you need to take into account things such as your age, current insurance coverage and existing assets. Trauma is a very personalised type of insurance coverage that may be incredibly valuable depending on your situation.
For more detailed articles please visit our website or for advice specific to your situation contact one of our financial advisers for an obligation free conversation.