Personal insurance -you may not want it until you need it, but by then it’s too late
It can be hard to imagine, but what would your family do if you suddenly suffered a heart attack, had a serious workplace injury or developed a disease like cancer? What financial position would you be leaving them in if you couldn’t work for a long period of time or even ever again?
It’s not a nice topic and it often is left off the dinner table, but it’s a really important discussion to have so you can be sure that should anything happen to you and you can’t work for a while, that your mortgage and bills will get paid and that your family doesn’t have to deal with the additional financial pressures, as well as dealing with the emotional ones in times of personal crisis.
Whilst insurance gets a bad rap, it can actually save your skin financially if you’re prepared and cover the consequences, should the worst happen to you.
So what types of personal insurance can you have?
- Life insurance – means your estate will be paid out a lump sum in the event you die so your family can continue to live a similar quality of life as they do now and they shouldn’t have to worry about being able to pay the day-to-day finances.
- Total and Permanent Disablement (TPD) insurance – pays a lump sum in the event you suffer an event and it is unlikely that you will be able to do either your exact job or a similar job to which you are reasonably suited for given your experience, training and qualifications. Examples would be if you were hit by a car and have lost mental or physical capacity to do your job.
- Trauma insurance – also called critical illness cover, pays a lump sum to help fund any major medical costs in the event of suffering a traumatic event such as cancer, heart attack, stroke or
loss of hearing/vision to name a few.
- Income Protection insurance – aims to replace as much of your income as possible in the event you are unable to work due to accident, illness or injury. Once you serve your waiting period, then you will receive up to 75% of your salary (plus a percentage of your super) until you are okay to return to work, or a specified expiry such as age 65.
So why is it important to get insurance now?
Whilst it’s easy to think that these insurances are irrelevant to us because we think they just won’t happen, you’ll be surprised at how often they do – catching people out when it’s too late to apply for the help they then really need during challenging, personal times.
The earlier you get insurance the better because:
- You’re generally healthier when you’re younger (meaning cheaper premiums)
- You may not have any pre-existing illnesses so your insurance policy will not have any exclusions, which is the best time to apply before any illnesses actually happen
- You’ll have peace of mind knowing that if you die or can’t work for a period of time, that you and your family can still live as you do now and can help cover any medical costs that might come up, leaving you to focus on the emotional side and not the financial one.
So how do I get started on my insurances?
You’ll be happy to hear that some of these insurances can be held (and covered) inside your Super account, whilst other comprehensive and tailored covers are held and covered personally.
If you need to discuss your insurance needs, book in your initial chat with David to discuss your options and we’ll see how Wealthy Self can help cover you and your family before you need to claim on it.
General Advice Disclaimer
This blog contains general advice only. You need to consider with your financial planner, your investment objectives, financial situation and your particular needs prior to making any strategy or product decision. InterPrac Financial Planning Pty Ltd and its authorised representatives do not accept any liability for any errors or omissions of information supplied in this document except for liability under statute which cannot be excluded.