If something were to happen to you, how would your family cope financially?
At this emotionally charged time, the last thing your family need is financial pressure adding extra strain, which is why it’s important to have life insurance to protect the things you've worked hard to create. But what type of life cover do you need and how much cover is enough?
An Ausure adviser can help you answer these questions and ensure your family and your lifestyles are protected financially in case things don’t go according to plan.
Would they be able to pay the mortgage, keep up with daily expenses and continue to live the lifestyle they were accustomed to?
So what types of personal insurances are available?
Term Life Insurance
Term life insurance provides financial protection to your beneficiaries, your family and their financial future by paying a lump sum in the event of your death or diagnosis of a terminal illness. This is the reason this type of insurance is commonly known as life insurance. The insurer will pay a pre-agreed benefit to your estate or to your nominated beneficiary upon your death by either accident or illness.
If you have a terminal illness, it will pay the benefit before your death – though your life expectancy must usually be determined to be less than 12 months. Many of us have term life insurance in our superannuation funds, and this can be a great place to hold insurance, however, do you know if this cover would be enough to provide for your dependents in the event of your early death, and what the possible tax consequences could be?
Total & Permanent Disability (TPD) Insurance
TPD insurance provides financial protection to you, your family and their financial future by paying a lump sum in the event if you become totally and permanently disabled. The insurer will pay a pre-agreed benefit to you if you are totally and permanently disabled by either accident or illness. Again, many of us have TPD insurance in our superannuation funds, and this can be a great place to hold insurance, however, do you know if this cover would be enough to provide for you and your dependents in the event of you becoming totally and permanently disabled and what the possible tax consequences could be?
Trauma or Critical Illness Insurance
Trauma insurance is designed to bridge the potential benefit gap between income protection, health insurance and total and permanent disablement (TPD) and life insurance. It came into being as people were surviving previously life-threatening illnesses (such as cancer, heart attack and stroke), but as a result were being financially disadvantaged through being off work due to poor health or because of essential lifestyle changes.
At a minimum, it is suggested you consider insuring for a lump sum sufficient to at least meet the costs for possible lifestyle changes including modifications to your house or motor vehicle, and long-term treatment that may not be covered by your private health insurance. Ideally you might like to consider providing your family with a lump sum for any debt repayment and financial planning shortfalls for both pre and post-retirement goals.
Income Protection Insurance
Income protection insurance is designed to replace your regular income if you suffer an injury or illness that prevents you from working and earning your regular income. For the majority of people, their ability to work and earn income is the most valuable long term asset they possess. A long illness or serious injury that prevents you from working could have a serious impact upon your lifestyle and the long-term financial security of your family.You may insure up to 75% of your monthly income and in some cases you may also be able to arrange for the insurance to fund your super contributions.
There are a wide range of options and other benefits that may be included with income protection insurance to help during your treatment and recovery. Business Expense Insurance Business expense insurance has been specifically designed for the self-employed person who wishes to ensure that the fixed expenses of the business or practice will still be paid even if he or she is unable to work due to injury or sickness.
This insurance is intended to help keep your business or practice going while the life insured (usually you) is disabled. Business expenses insurance will pay a benefit up to a pre-agreed amount in order to help meet the cost of a range of nominated fixed expenses that would normally be paid for from the income you generate.
Business Key Person and Succession Insurance
Business key person and succession insurance are an integral part of succession planning that allows for the efficient and fair realisation of equity between owners of a business, if one business owner dies or needs to leave the business due to illness or disablement.
Any business succession plan should facilitate: the transfer of equity between the remaining business owners, certainty that beneficiaries receive their full entitlement for the value of the equity in the business, and protection of the value of the business if one owner dies or suffers illness or disablement
Business succession insurance is designed to provide the necessary funding to achieve these goals. Insurance can be a tricky area with lots of options to consider, so talk to an Ausure Financial Adviser to protect you and your family today.
General Advice Warning: Please be aware that any advice that may have been given or implied is general advice only. We have not taken into consideration your individual needs, objectives or financial requirements. Before deciding to purchase a financial product, you should consider the appropriate Product Disclosure Statement to ensure the product is suitable for your needs.