Personal Insurance Policies: Get the Right Advice

Insurance Policy

Personal insurance policies can prove to be extremely important, not just for yourself, but anyone else who is financially dependent on you; illness, injury, accident, and even unexpected death could leave you or your family unable to pay debt repayments and everyday living expenses, leading to serious financial difficulty without the proper cover in place. However with so many personal insurance options on the market, it can be difficult to understand which policies you do need to take out. 

Income protection, whilst suitable for anyone, is most recommended to small business owners and self-employed individuals. An income protection policy ensures that you will receive up to 75% of your estimated income, if for whatever reason you are unable to work; this type of policy is only designed to cover your living expenses and regular debt repayments – by not offering a higher payout, the policy encourages those who claim to return to work sooner.

Trauma insurance is designed to offer you temporary cover towards medical bills and living expenses in the event you are injured or diagnosed with an illness you are likely to recover from; as it is expected you would return to work after a period of time, this loan is not designed to cover large debt repayments, but rather provide peace of mind that you will have some income until you can return to work.

Total and permanent disability insurance is designed to protect you in the event you become totally or permanently disabled as the result of injury or illness; this particular plan is designed to pay off your mortgage, as well as any other debts or education expense, and an income stream to cover living expenses and medical bills for a specified period of time. A total and permanent disability policy is paid out on the assumption that you will never work again as a result of your disability. Whilst it is a good idea to have this kind of insurance in place, it can typically be deducted from your superannuation to avoid having it in your own name and paying for the policy outright.

A life insurance policy is put in place to cover your financial dependents in the event of your death, and needs to cover all of your debts, as well as education fees and living expenses for your dependents for a set period of time, and your own funeral expenses. This policy is designed to lift the financial burden from your grieving dependents. Whilst life insurance can be deducted from your superannuation, it is advised that you discuss this with an insurance advisor, who can discuss with you if it would be beneficial to take out a life insurance policy in your own name, ensuring your family has the cover they need.