Insurance in Australia is commonly divided into three categories: personal insurance, health insurance and general insurance. Personal insurance encompasses a variety of products, including policies that provide payment upon death, continuous disability or trauma.
The importance of personal insurance
Protection against life’s uncertainties is sensible financial management. Investing in personal insurance will ensure that you and your family can continue to enjoy the quality of life that you want.
Having insurance can provide financial protection for your family’s personal needs, where there is no longer someone able to provide an income to support those needs. Insurance can be structured to provide for such things as the repayment of your debts upon death, disability or illness, financial assistance for dependents, for example paying school fees and protection against the loss of income.
The types of personal insurance are:
Life Insurance
Life insurance is about protecting you or your family against death. It works by paying a lump sum upon death or the diagnosis of a terminal illness.
The payout means your family will be assisted financially if you are no longer around. On your passing, it will pay for your funeral costs, settle your debt and provide money for your family’s future. It also means your loved ones can focus on supporting each other at a time of immense grief, rather than having to worry about how they will pay bills and manage other expenses.
Total & Permanent Disability Insurance (TPD)
What would your financial future look like if you became permanently disabled and were never able to work again? Even if you have income protection, you may be facing medical, rehabilitation and support costs, a lower income and no ability to increase your income over your working lifetime.
TPD normally comes in the form of a lump sum to help you meet medical and rehabilitation costs, and/or if you are injured and cannot continue with your normal daily life. This might cover such things as costs to change your environment, living expenses, medical costs, future costs of living and financial debts such as mortgages and loans.
Trauma Insurance
If you have a stroke or a heart attack or are diagnosed with a serious illness such as cancer, your private health insurance or the public hospital system may cover some of your medical costs.
However, in many cases, your treatment may require a long-term process before you’re able to return to work. As a result, this could place a significant financial strain on you and your family in being able to cover day-to-day expenses. Receiving a large lump sum of money from your insurance could therefore help to alleviate this pressure.
Income Protection
Income protection insurance pays part of your lost income if you’re unable to work because of a disability, caused by illness or injury. It can help pay the bills so you can focus on getting better. In Australia, this type of insurance pays up to 85% of your pre-tax income for a specified time if you’re unable to work due to partial or total disability. It is designed to replace the income based on your annual earnings in the 12 months prior to your illness or injury.
Give our friendly Gold Coast-based team of experts a call on (07) 55305 118 if you have any questions regarding personal insurance – we’ll be happy to help. Otherwise, use our online form to contact us and we will be in touch as soon as possible.