You've worked hard for what you have,
so why risk losing it in the event of illness or injury?
Many Australians wouldn't dream of leaving their home or car uninsured, but when it comes to insuring their largest asset - their own life and their ability to earn an income - Australians are amongst the most under-insured in the developed world.
When some people think of risk insurance, they think only of life insurance and the payout that may be received in the event of death. But there are many more events which can occur during life which may derail your financial goals and aspirations.
Unable to work temporarily
If you're are unable to work due to illness or injury for a few days or few weeks, you may have sufficient sick leave at work to cover yourself. If it was a little longer, you may have sufficient savings to get you through. But what if it was a few months or a year? What if it was many years or a decade or more?
If you are lucky, you may have disposable assets to sell, but that could leave a huge dent in reaching your financial goals. You may be able to live off credit cards for a few months, but that is not a sustainable strategy.
For the average Australian, being unable to earn an income for a sustained period of time will quickly result in financial pain, and in the worst case, possible bankruptcy.
Income Protection is a cost effective - and tax deductible - way of protecting yourself. Income Protection will pay up to 75% of your pre-claim income for a period of time determined by the type of policy you have.
In the unfortunate event of injury or illness affecting your ability to work, instead of worrying how you will meet the next mortgage repayment, you can rely on your income protection policy and concentrate on your recovery whilst knowing that your financial goals and aspirations are still on track.
There are very few adult Australians who haven't been touched by critical illness, be it personally or via a friend or family member. As we get older, the chances increase for ourselves and our loved ones.
Common critical illnesses and events include cancer, stroke and heart attack. With modern medical developments, many suffers will make a full or partial recovery. Unfortunately, their financial situation may not enjoy the same recovery.
Such events may require a year or more away from work, which for many Australians would mean severe financial hardship, right at the time they need it least.
Trauma Insurance, also known as Critical Illness Insurance, can provide you with a lump sum payment to be used however you see fit. Funds may be used to reduce or extinguish debt, to replace income and to fund costly medical expenses that may not be fully covered by private health insurance.
Trauma Insurance allows you to concentrate on your recovery, without having to struggle back to work or worry about financial matters.
Total and Permanent Disability
How would your life be affected if you were to suffer an injury or illness that resulted in you never being able to work again? Without insurance, it would result in financial ruin for the majority of Australians.
Centrelink benefits may be available, but paying a mortgage and raising a family on this income would be impossible. Private school fees would certainly be out of the question. Depending on the situation, funds may also be required for modifications to your home and vehicle to accommodate your changing needs.
The sale of disposable assets, along with savings and credit cards may keep you going for a while, but this is not a sustainable strategy, and would leave a huge dent in your financial goals.
TPD Insurance pays out a lump sum amount in the event of becoming totally and permanently disabled, and unable to perform your own occupation, or any other occupation to which you may be suited by experience or education (depending on the policy definition).
The lump sum payout can be used however you see fit. Common uses include reducing or extinguishing debt, investing an amount which will provide an ongoing income to replace your pre-claim income, and for home or car modifications that may be required depending on the disability.
Whilst we all hope for a long and fulfilling life, and the ability to watch our children and grandchildren grow and become successful in their own right, there is always a risk that we may die earlier than planned.
Such an event may result in those left behind being unable to provide for themselves, and with crippling debts they cannot maintain.
Life insurance can help to ensure those left behind can continue to lead the lifestyle they have become accustomed to, without the financial hardship that may otherwise be experienced.
In the event of your untimely death, Life Insurance will payout a lump sum that can be used however the beneficiary sees fit. This may include extinguishing debts, paying out any outstanding bills (including funeral expenses) and investing an amount which will provide an ongoing income to provide for everyday living and education expenses.
It can give your loved ones the ability to grieve without having to worry about financial matters.