Most of us would never drive off in our car without having adequate car insurance in place. Same goes when it comes to our homes. We make sure the house and its contents are covered by an appropriate insurance policy. Having such general insurance set up is just part of our risk management. Unfortunately, many often neglect to consider protecting their most valuable asset - themselves and their capacity to earn.
In this article, we will go over the five types of insurance available for your personal risk management.
Income Protection Insurance (IP)
This insurance product can cover up to 75% of your gross salary when you are injured or sick and unable to go to work. It operates independently of employer work insurance and does not depend on workplace injuries before a claim can be made. IP cover replaces your income to help cover your day-to-day living costs, bills and the mortgage.
This is the most common type of personal insurance. It will pay out a lump sum in the event of the insured person passing away. It financially protects families in the event of the death of a family member. This payment can be used to pay off debts, pay for the kids’ education, as well as allow a surviving spouse option to take time off to take care of the kids.
Many will be aware of life insurance, however the tricky part will be how much is the right amount to insure. This is where an experienced financial planner or risk specialist can really help.
Trauma (or critical illness) insurance policy provides a lump sum payment in the event of diagnosis of a specified health condition. It is designed to provide financial help to people who encounters a critical illness event, such as a heart attack, stroke, cancer or other life threatening conditions. This payment can pay for the best treatment and lifestyle changes while you focus on getting better.
Total and Permanent Disability Insurance
Total and permanent disability (TPD) insurance policy provides a lump sum payment if the insured person suffers an illness or injury which causes a permanent disability preventing them from getting back to work.
There are many specialised definitions of TPD which can make it hard to get paid in time of claim. This is where an experience financial planner or risk specialist can recommend the one most suitable for you.
Business Expense Insurance
If you own a business and the business mainly relies for your efforts to generate income, then business expense insurance policy can keep your business running if you are unable to work. It covers for your fixed business costs, eg. rent, interest on loan, leases, admin staff, etc.
Things to Consider
There is always a risk that you could suffer an early death or extended time off work through serious illness or injury. How and where this leaves you and your loved ones is very much dependent on the insurances policy(s) you have in place.
There is plethora of insurance policies available, especially on the internet. Why not take advantage of the expertise and knowledge of an experience financial planner or risk specialist. Contact us today to make an appointment.
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Disclaimer: Information on this site may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product.
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