Unfortunately life sometimes throws us a curve ball when we least expect it.
And if it’s an injury or illness that affects you or a loved one, the fallout is especially hard to deal with.
So while each of us would prefer to avoid the difficulty in the first place, having a financial buffer can at least mean that money worries are reduced, or better yet, eliminated, during a difficult time.
Having the right insurance is the simplest way – in a financial sense – to prepare for the worst.
We’re experts in helping you identify what personal insurances you may need to support your particular circumstances. We also assist you in working out how much cover is right for you, and in identifying the specific insurance policy that has the terms and conditions we recommend for your situation.
Types of insurance we advise on include:
· Income protection insurance that provides an income to you if you are injured or ill and cannot work for an extended period
· Trauma insurance that pays out a lump sum if you are diagnosed with a serious illness such as cancer, heart disease or a stroke
· Life insurance that pays out on the death of the person whose life is insured
· Total and permanent disability (TPD) insurance pays out if the insured person suffers an illness or injury that renders them totally and permanently disabled
As an advisory practice that’s not owned by a bank or insitution, we are free to explore a wide range of options from leading insurance providers within the Australian market. As a result we can select and recommend the insurance cover we believe will serve you best.
We do not earn commission on the insurance cover we arrange. Instead, we charge a flat fee for organising and following up your application, and for negotiating more favourable terms as appropriate with the insurer. In our experience, this typically reduces the cost of insurance by around one-third each year.
How much insurance cover do you need?
It can be challenging to know how much you should insure for.
Factors to consider include assessing:
· How much you would need to repay your debts and reduce financial pressure on you and/or your family so assets (such as your home) can be retained
· What income stream you would need to cover your salary (or at least your ongoing expenses)
· The cost of expenses that arise as a result of the issue, such as medical expenses, time off work, costs of care, funeral expenses or home modifications.
Even if you are not currently earning an income, you should still consider covering yourself for any expenses which could arise if you die, become disabled or suffer a serious illness.
Sarah is a stay-at-home mum caring for her three children. Her oldest child is at school and the other two attend pre-school two days a week. Sarah’s husband, David, works full-time.
If Sarah passed away or became disabled the family would not lose any income, but David would need to continue to work and additional expenses will arise.
For example, if Sarah is disabled, she and the children will need assistance with care. If she was to pass away, David may wish to hire a nanny or other help to care for the children and the home.
Sarah and David decide to take out term life and TPD insurance policies on Sarah’s life. The insurance will pay a lump sum to either Sarah or David (if Sarah dies) which could be used to cover these expenses.
Calculating the amount of insurance to apply for
You might wish to calculate how much insurance to apply for using one of two options: expenses method or replacement method.
Under the expenses method you can try to estimate what expenses need to be covered (over a determined timeframe) and apply for insurance equal to this total amount. Under the replacement method you might take out cover to replace your annual income multiplied by the number of years of your remaining working life. Or you might look at a combination of the two options.
It is too easy to miss important considerations and apply for inadequate levels of cover. Unfortunately this significantly dilutes the benefits of having cover in the first place.
Advice is important.
We can advise you on which types of personal life insurance are appropriate, how much cover you need and which life insurance companies provide the best products for you.
You can schedule a free, no-obligation consultation where one of our experienced advisers will chat with you about your needs.
Arrange an appointment today and sleep well at night knowing you have the financial resources in place to reduce the suffering if the worst were to happen.