What Type of Insurance?
What type of insurance
You have a tailor for your clothing, so why not for your insurance as well? It’s very easy to be underinsured, but is just as easy to wind up overinsured too. Different types of insurance fit your lifestyle very differently, so it’s important to consider the wide variety of insurance types to ensure you are getting the right level of cover for you.
Life Insurance
Life insurance (alternatively, death cover), allows you peace of mind for your family should the worst case scenario occur. While you may not receive the benefit, the purpose of this style of insurance is to provide for your family in your absence, leaving necessary funds to help put children through education, pay off debts, cover emergency costs and more. As the name suggests, this insurance can only be claimed in cases of the death of the trustee, with some rare cases allowing for compassionate early claims under terminal conditions. This cover is the most common type of insurance, and is commonly packaged with Superannuation funds.
Total & Permanent Disability
TPD cover is for the possibility that you may become injured or impaired to a level where you are unable to work again. This can either pertain to any occupation at all, or simply your current occupation category. It’s important to note that you will need to be assessed by a doctor prior to making a claim to confirm that you are in fact, unable to return to work. Helping to cover rehabilitation, debts and to cover living costs in the future, TPD is one of the most important types of insurance to ensure you are covered for, as it secures your family’s income for the foreseeable future.
Trauma
Trauma cover (or Critical Illness cover) protects you in cases where you are diagnosed with specific illnesses or injuries that won’t necessarily mean you can’t work again, but will make a significant impact on your life. The benefit can be used for things like medical or transport costs, modifications to house and living areas to accommodate for the illness/injury, or paying back debts. Trauma cover pays a set amount – it’s not a limitless payout for the duration of an illness.
Income Protection
Income Protection (or Salary Continuance) covers you for conditions that will require you to be off work for a temporary time, but still significant enough that without a good emergency fund, it would land you in some strife. Typically income protection is intended to fund every day expenses, as well as ensuring you don’t fall behind on debt repayments. Income Protection will typically have a fixed benefit period, as well as a pre-specified waiting period before claiming, to ensure that unreasonable claims are not being made.
There are also a lot of other considerations that go into getting the best insurance, including but not limited to: Total benefit, Premium structure, additional features and underwriting. To ensure you’re able to get the best deal, we recommend looking closely at your options, as well as considering discussion with a professional.