I’m passionate about making sure my clients are financially protected if something unforseen happens.
Although people generally think of life insurance as just that – insurance which covers your life in the event of death – there are actually several types of life insurance policies:
Life Insurance – pays a lump sum on your death or the diagnosis of a terminal illness. So when the worst happens, your foresight will pay off the mortgage and other debts, provide for your children’s education, obtain child care and secure your family’s lifestyle. This will allow your family to focus on supporting each other, not worrying about paying the bills. As the years pass they will continue to be thankful you thought ahead.
Trauma Insurance (Critical Illness Insurance) – pays a lump sum on the diagnosis or occurrence of one of a list of specific illnesses such as heart attack, cancer or stroke. That payment gives you choice and flexibility at a time when you need it most. You will be able to reduce your working hours, spend time with your family, get treatment or rehabilitation and pay for a carer and any number of unexpected things.
Income Protection Insurance – provides a replacement income of up to 75% of your current income if you are unable to work due to illness or injury. Also known as ‘Income Replacement Insurance’, ‘Disability Income Insurance’ or ‘Salary Continuance Insurance’, it can cover you for short or long periods and offer various waiting periods to suit your needs. Depending on the policy, payments may continue right up to the age of 65 if the disability is ongoing or permanent.
You might find it interesting to calculate just how much you’ll earn from now until you reach 65 years.
Total and Permanent Disability Insurance – pays a lump sum if you become disabled and are unable to ever work again. You can use this lump sum to pay off debts, cover medical and carer costs and invest so that you have an annual income to help maintain your lifestyle.
Business Expenses Insurance and Key Person Insurance– business expenses insurance covers the ongoing costs of your business if you are self employed and cannot work due to illness or injury. Key person insurance covers the losses incurred when a person essential to the success of your business is injured, becomes sick or dies.
Despite the fact that we live in the best country in the world, Australia is one of the most underinsured of all developed nations.
But what does that mean?
According to research by IFSA in 2005, only 4% of the total population with dependant children have adequate levels of life insurance cover. Only 4%! What would happen to the other 96% should they face a tragic death, disability or major illness?
You could rely on your savings, the extra you’ve paid off your mortgage, help from your family or the government. Well the government have just announced the National Disability Insurance Scheme (NDIS). While I fully support the idea of greater funding and assistance for those with a disability – it is not enough. Personal disability insurance is still necessary to assist with things like living expenses, mortgage repayments and education costs. It’s also going to be 2018 by the time the NDIS is fully implemented.