Protect yourself and your future
Life can be full of unexpected turns, so it’s important to protect yourself and your family from whatever the future holds.
Insurance provides peace of mind, giving you certainty your debts could be repaid and you could continue to maintain your lifestyle if you were unable to work due to illness or injury – and that if you should die your loved ones would be taken care of.
Why do I need life insurance?
How would it impact your family finances if you or your partner suddenly died, or become seriously unwell and unable to work? Life insurance can offer you and your family financial support in these difficult times.
There are four key types of life insurance to consider: life cover, total and permanent disability (TPD) cover, trauma cover and income protection.
1. Life cover
Life cover (often referred to as ‘term life insurance’ or ‘death cover’) pays a pre-determined sum of money to your nominated beneficiaries when you die.
Life cover helps you set up a way to support your loved ones after you die – ensuring they can continue to pay the mortgage, school expenses and buy daily essentials. To decide how much life cover you need, keep in mind things such as your children’s future childcare, education fees, any debts you’ve acquired and what your family will need to live comfortably.
2. Total and permanent disability (TPD) cover
TPD cover pays a lump sum of money should you be totally and permanently disabled and are unable to return to work. The funds can be used to pay off debts, as an income stream, cover for medical/rehabilitation expenses and home care support.
3. Trauma cover
Trauma cover pays a lump sum if you’re diagnosed with a specific illness or injury. Often referred to as ‘critical illness cover’ or ‘recovery insurance’, it covers major illnesses such as cancer, a stroke or heart attack.
This type of insurance helps take the pressure off your day-to-day finances, so you can take adequate time off work to focus on your recovery. Trauma cover helps provide financial support and can be used to help pay out-of-pocket treatment costs, or even explore more advanced treatment options.
4. Income protection
Income protection, also known as ‘salary continuance’, covers lost income should you be unable to work as a result of injury or illness.
It’s particularly suitable for those who are self-employed, small business owners, or professionals whose ability to work is crucial to maintaining their business. The insurance premiums may also be tax deductible.
While each income protection policy will have its own range of benefits, it generally covers up to 75 per cent of your gross salary for a maximum period of time – that is, two years, five years, or to the age of 60, 65 and even age 70.