Personal insurance explained
There are a number of personal insurance options that are available to financially protect you and your family should the unthinkable occur. Several of these come under the umbrella of life insurance, which provides financial compensation in the event of death or the diagnosis of a terminal medical condition.
Term Life Insurance
Life insurance is designed to pay a lump sum to your nominated beneficiary if you die. You will set the amount that you want to be covered for. When nominating an amount, it is important to consider any debts you may have, education expenses for your children and your family’s general living expenses. You want to know that your family will not be under financial pressure if something happens to you. Your age, lifestyle and health will affect the cost of your premiums.
This may be an alternative to term life insurance for some individuals who may have difficulty obtaining affordable life cover. Funeral insurance is designed to pay a lump sum to your family to help cover funeral costs if you die. One of the advantages of this type of insurance is that you usually do not need to give medical information but the main drawback is that by comparison with life insurance, the premiums can be high for the level of benefit involved.
How would you provide for your family if you were forced to cease employment through sickness or injury? Income protection provides a solution. With a suitable policy in place you can receive a regular payment as a replacement for your lost wages. Income protection will generally only provide up to 75 per cent of gross wages.
Total and Permanent Disability Cover
TPD offers financial protection in the event that you suffer injury or illness so serious that either you can never go back to work, or (depending on the policy you choose) you can never work again in your current occupation. TPD can help pay for rehabilitation costs, and future living expenses.
Also called critical illness cover, this type of insurance is designed to pay a lump sum if you suffer a serious illness. Trauma insurance can help pay for medical expenses, living expenses and debt repayments.