Insurance can make all the difference - it can help safeguard your loved ones from financial hardship if you become ill or injured, or if you pass away, giving you peace of mind that they’ll always be looked after.
How it works
You pay a premium to your insurance provider on a regular basis – for example, fortnightly, monthly, or yearly. The amount of this premium payment depends on many factors including your age, health, level of cover and even the premium structure you choose.
If you become terminally ill or pass away, then your nominated beneficiaries will receive a lump sum benefit from your insurance policy. They can use this money in any way they need – such as covering funeral costs, paying off your mortgage and keeping up with living expenses.
If you’re temporarily or permanently unable to work because of an illness, disability or injury, you may be able to claim on a lump sum benefit or ongoing financial support (depending on the type of cover). You can use this money to replace your lost income and cover any medical and rehabilitation expenses.
Types of cover
Different insurance policies offer different types of cover, which you might consider depending on your circumstances. Please check your current policy for the cover type that you currently hold. Here are the four main types of cover that may be available:
Death and terminal illness cover
Your beneficiaries can receive a lump sum benefit if you pass away or are diagnosed with a terminal illness.
Total and Permanent Disability (TPD) cover
You can receive a lump sum benefit if you become totally and permanent disabled and are unable to work.
Trauma cover
You can receive a lump sum benefit if you are diagnosed with a certain illness, as defined by the policy, such as cancer or a stroke.
Income Protection cover
You can receive financial support if you become temporarily unable to work due to injury or illness by replacing up to 75% of your income during this time.
How much is enough?
According to Rice Warner’s 2017 report, Underinsurance in Australia, when it comes to life cover Australians are underinsured to the tune of almost $5 billion.i
We can help you calculate how much you and your family will need to maintain your current lifestyle, based on a range of factors including:
- your mortgage and other debts
- the income you currently provide
- funeral expenses and legal costs
- the ages of your partner or spouse and your children.
Because your circumstances change over time, it’s a good idea to review your insurance regularly as well as when a major event occurs – for example, if you get married or start a family.
Talk to us if it’s time for a review of your personal insurance needs.
i Rice Warner, Underinsurance in Australia, 2017.
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