Personal Insurance
"It'll never happen to me?" Think again!
No one expects sudden death, accident or illness. But when such unfortunate events do strike, they can be devastating for you and your family. If something does happen, it may be difficult to cope financially. Household Finance & Insurance can provide you with a choice of cover from a range of leading insurance companies to maintain those things you work so hard to protect.
How much protection does a family need? That's a difficult question because it depends on so many factors that can't be predicted - like how long you will live. A simple approach is to plan for the worst case scenario and decide how much money surviving family members and loved ones will need.
Life Insurance
With life insurance, the life you’re really insuring is everyone else’s! Life insurance that pays out upon death is to all intents and purposes death cover. You won’t be around to enjoy any benefits. But your family will. And that’s why it’s important to have some kind of cover. As the major breadwinner, who would look after the rest of your family when you die? Do you really want to be beholden to someone else to look after your family? And what if they need to go on welfare?
Life Cover - Provides a lumps sum benefit payable upon your death. The policies are generally renewable each year, meaning that the premium is calculated each year and will normally increase as you get older. This form of insurance is rather flexible in that the sum insured can be altered to suit your financial circumstances without incurring any financial loss. When the benefit becomes payable, it is normally paid to your dependents or your estate. This lump sum could be used to pay back debts and/or provide a lump sum that can be drawn upon to create income, and so help your family maintain their current lifestyle. In addition, it will help you keep your families plan on track and pass on an investment asset to your family.
Total and Permanent Disability (TPD) - This form of insurance is normally available as an optional benefit on a Term Life or Trauma policy. The benefit is a lump sum paid if you become Totally and Permanent Disabled. You must be disabled to such an extent that you are unlikely to ever egage in:
OWN occupation - This definition is by far a more beneficial policy to be assessed under, however it is likely to be the most expensive.
ANY occupation - This definition is much more restrictive in that it includes "any occupation" to which you may have been suited by education, training and/or experience.
Many of the features of Term Life will apply equally to TPD. The sum insured is payable in the event of TPD and s generally restricted to being no more than the death benefit. The lump sum could be used to help pay for debt reduction/elimination, income generation and all other facets of permanent disablement.
Income Protection Insurance
While life cover will look after your family when you die, what happens if you can’t work because of illness or an accident and it’s going to take months to recover? Or maybe you can never work again and you’ve got school fees to pay, food to buy and a mortgage hanging over your head.
This is when you need income protection insurance, otherwise known as disability insurance. It’s estimated that you will earn something like $4 million over your working life, so it would be fair to say that your income needs protecting a lot more than your home and your car. This is even more so given that at the age of 35 you are 10 times more likely to be disabled then die.
Income Protection - This form of insurance is available from a wide range of Life offices, normally as a "stand alone" policy. It provides you with a monthly income should you become Totally Disabled, however, the disablement need not be of a permanent nature. Each company defines Total Disablement, but generally speaking, the benefit is paid if you are not working and are unable to earn your normal income due to illness or injury. The benefit paid could be used for living expenses, regular investment and other costs, thus keeping yours and your families’ lifestyle and plan on track.
Trauma Insurance
If you’re diagnosed with a critical illness or crisis, trauma insurance can relieve your financial difficulties. Unlike income protection insurance, which is dependent on your inability to work, trauma cover is paid out on the diagnosis of a defined critical illness regardless of your working status.
Instead of receiving a monthly income stream, you are paid a lump sum that you can spend on whatever you like- medical bills, your mortgage, an overseas trip, even a new car. The insurance company makes no demands on how you spend the money. Trauma insurance is often an adjunct to term life policies.
Trauma - This form of insurance is available as an optional benefit on a Term Life insurance policy or as a stand alone policy. A trauma payment is likely to be paid should you suffer any of the covered conditions. This could include, but is not limited to: heart attack, stroke, cancer, paraplegia, multiple sclerosis, Parkinson's disease, chronic liver, lung and kidney disease and many more. The lump sum could be used to cover debt reduction/elimination and to cover costs related to making lifestyle adjustments, necessary home and/or car modifications, medical treatment costs, work alterations and peace of mind etc.
Business Expense
Business Expenses Insurance - Is available to certain self-employed persons who wish to cover their business expenses should they be unable to work because of illness or injury. Payments are generally made on a monthly basis and can reimburse up to 100% of approved business expenses. The payments are generally limited to 12 months.
Authorised Representative for Professional Investment Services Pty Ltd – ABN 11074608558 – AFSL# 234951
