Life Risk Insurance
There are many different risk insurance products out there and with industry jargon, finding the right product for you can be a difficult task. Here we list four common types of risk insurance and some characteristics of each that may be worth considering.
Income protection- protects you if you are unable to work as a result of suffering an illness or injury. Most policies will allow you to claim up to a certain percentage of your income (often up to 75%) so it is vital to understand what you will be able to claim if you need to access the income protection. When deciding whether you need income protection, consider how much you rely on your income and whether you could cope financially without it for any period of time. Note: many superannuation funds also offer income protection.
Life cover- a lump sum will be payable to your beneficiaries at your death or diagnosis of a terminal illness. This can be used by your family members to pay off debts and for other associated costs, such as a funeral. Two important considerations are what the maximum payout amount could be and the level of debt that you currently have.
Trauma- payments that you will receive if you suffer a covered trauma (such as cancer, stroke or heart attack). Trauma cover can provide peace of mind that if the worst were to happen, you will be financially supported and can focus on the most important thing, your health. Insurance policies may cover different traumas and allow you to claim up to different amounts.
Total and Permanent Disability (TPD)- pays you a lump sum if you become permanently disabled and are unable to work again. There are different features of TPD insurance that can be included in a policy, such as accident, illness and sports cover. You may like to think about what the definition of TPD is with respect to the specific insurance policy and whether the premium is tax deductable.
Further things to consider before choosing which policy is most suitable for you include:
- The amount of time that you will be covered for
- Waiting period before being able to claim (such as 21 or 28 days)
- Maximum claim amount
- Policy exclusions (some types of illness or injury may not be covered).
As always, it is imperative that you consider your own personal situation in order to ensure that you are adequately protected with cover to suit you and your family. One insurance policy that is perfect for one person or family may be inadequate for another person or family.
For further help in finding the right policy for you, speak with our Senior Financial Planners on 1300 654 193 or by emailing firstname.lastname@example.org.
General Advice Warning:
This information does not take into account your objectives, financial situation or needs. Therefore you should firstly consider the appropriateness of this information and refer to the Terms and Conditions and Product Disclosure Statement (PDS) before acquiring a product. These documents are available by contacting us on 1300 654 166.