Avoid worrying about your loved ones. Setup cover for your finances if you are not able to. Don’t leave your finances at risk.
Take the time to talk to an adviser while you are able, so that you are covered later in life. The right level of life insurance cover for you will depend on your lifestyle and at what stage of life you are at.
Recover your health
In the event of major health problems you want to cover unexpected illness. This is often called recovery insurance which supports you in the event of a major health problem. These policies cover you during major illnesses or injuries that will make a significant impact on your life, such as cancer or a stroke.
Trauma insurance provides a lump sum (paid to the policy owner), upon the confirmed diagnosis of an insured condition e.g. being diagnosed with cancer or a heart attack.
The number of conditions covered varies widely between providers, with cheaper policies often covering fewer medical conditions. Premiums are not tax deductible and thus the proceeds are generally not taxable.
Your life covered
Life insurance is set in place to assist your loved ones if you die. You can select who you want to be supported when you are not able to.
Life Insurance covers: Provides your beneficiaries with a lump sum payment in the event of your death and terminal illness. It can also replace some of your income should you be unable to earn any.
Covers the cost of rehabilitation, debt repayments and the future cost of living if you are totally and permanently disabled. This insurance is often coupled with your life cover.
Total and Permanent Disability Insurance
Total and Permanent Disability insurance (TPD) is a cover designed to pay you a lump sum should you suffer sickness or injury to the extent that you are unlikely to be able to return to work insecure and extreme reasons (e.g. quadriplegia).
There are generally two definitions of being unable to return to work within TPD insurance:
- Any occupation: where you are unable to recommence work in any occupation suited to you by education, training and experience; and
- Own occupation: where you are unable to recommence work in your own occupation. Premiums for this type of insurance are more expensive than for any occupation insurance and can generally not able to be paid for through super.
Your income protected
If you are suddenly not able to work, you can protect your family with income protection. This replaces the income lost through your inability to work due to injury or sickness.
Income Protection Insurance
Income protection insurance is designed to assist in covering your expenses in case you are temporarily or permanently incapacitated, through sickness or injury, and therefore unable to work.
It can pay up to 75% of your salary for a specified period of time and premiums are tax deductible when held personally. If you were to become injured and eligible to receive a payment under your income protection plan, the monthly amount received would be assessable as taxable income.