Hello Fellow Investors,
It is important to remember that personal insurance is a balancing act. You need to have enough cover to ensure both you and your family are adequately protected. Additionally, you have to make sure that you don’t have too much cover, as you don’t want to be paying for cover you don’t need.
The Australian Government does have a calculator for how much life insurance is needed, which is linked below, but this calculator doesn’t cover Total and Permanent Disability (TPD), Income Protection, and Trauma Insurance.
Working out the correct amount of cover you need for each of these insurances requires both an understanding of your personal situation and an understanding of what each cover is and how it works.
- Life insurance pays a lump sum to your beneficiaries if you pass away or are diagnosed with a terminal illness. This payout can be used to cover funeral expenses, pay off debts like a mortgage, support your family’s living costs, or fund future needs such as education.
- TPD insurance provides a lump sum if you become permanently disabled and are unable to work again. The funds can help cover medical and rehabilitation costs, home modifications, ongoing care, and pay off your mortgage.
- Income Protection insurance pays a regular monthly benefit if you’re unable to work due to illness or injury. This helps you manage your ongoing lifestyle costs.
- Trauma insurance pays a lump sum if you’re diagnosed with a serious illness such as cancer, heart attack, or stroke. This money can be used for out-of-pocket medical expenses, specialist treatments, travel for care, or to take time off work and focus on recovery.
Together, these insurances offer a comprehensive safety net to protect your financial stability and support your recovery or your family’s future.
If you would like an expert to help work this out/ have a professional make sure you end up with a high-quality product, you can use our service “Personal Insurance Made Simple” to make sure you get the right cover in place.
Joshua Napier (Associate)