Hello Fellow Investors,
There is no easy answer to how much life and personal insurance cover you might need. It’s one of those questions that can only be answered with “It Depends” – at least until you see a professional like our Brisbane financial planner, who will take your personal circumstances into account.
What is Personal Insurance?
The term “personal insurance” is frequently used to cover a range of insurance products, designed to protect you and/or your family should a specific event occur – such as your death or serious illness or injury. Imagine the impact should you be unable to work again due to an accident; this is just one example of why personal insurance is important!
Of course we all hope that these worst case scenarios will never happen, but we have seen far too many heartbreaking cases where individuals have not been prepared. Not only do they have to contend with a traumatic event, like a life-changing diagnosis, but without the right insurance policy to make sure funds are available, their whole way of life is turned upside down.
Choosing personal insurance is a balancing act – you will want to weigh up the premiums against the type of cover provided. It can be time consuming and let’s face it, perusing the fine print on the product disclosure statement is not exactly light holiday reading!
More than Just Life Insurance
The Australian Government does have a calculator for how much life insurance is needed, but this calculator doesn’t cover Total and Permanent Disability (TPD), Income Protection, and Trauma Insurance.
Ideally, you need to have enough cover to ensure both you and your family are adequately protected. At the same time, without professional advice you risk having too much cover – nobody wants to be paying for personal insurance cover that they don’t actually need!
Choosing the Best Cover for your Needs
Working out the correct amount of cover requires both an understanding of your personal situation, as well as each type of cover, and how they work. These may include:
- Life insurance: which 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 for your children.
- 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, helping you to 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 out what sort of coverage you need, and to make sure you end up with a high-quality policy, you can use our service “Personal Insurance Made Simple” to make sure you get the right cover in place.
And don’t forget that in addition to providing professional advice regarding your personal insurance needs, we can also assist with things like retirement planning, investment management and superannuation advice. Reach out for your free, no obligation, initial consultation today.
Joshua Napier (Associate)