Consider this. Three in five Australians will be disabled for more than one month as a result of illness of injury. Furthermore, one in four women, and one in six men, between the ages of 35 to 65 will suffer a disability, which causes a loss of six months from work. (Source: iaD 1989-93 and alT 90-92).
Whilst nothing can compensate for the emotional strain caused by a serious injury or illness, personal protection insurance can provide peace of mind that you and your family are financially secure. Having the right type and level of insurance can help to protect your livelihood, your loved ones and your lifestyle should the unexpected happen. It can also safeguard against the financial strain of lost income.
There is a range of insurance options available. The type(s) of insurance, and the amount of cover required, differs for everyone.
Personal Protection Insurance: A Snapshot
A. Income Protection: maintain your lifestyle
Your ability to earn an income is one of your most valuable assets. Without income, everything stops. Imagine if you couldn’t work tomorrow, due to illness or injury. Where would it leave you financially? More importantly, where would it leave your family and those who are financially dependent on you?
If your lifestyle is fully or partially dependent on your ability to work, an illness or injury can have a devastating impact. Income protection provides a regular earnings replacement if you suffer an illness or injury and are temporarily unable to work – helping you maintain your family’s lifestyle until you are able to return to work.
With income protection, your income can be replaced up to the insured benefit amount of the policy. In general, the maximum amount of cover is 75% of earnings (after business expenses, but before tax); however, additional ancillary benefits can be obtained to protect your superannuation contributions, and to also protect you in case of a severe sickness or injury.
B. Term Life Insurance: protect your family
The loss of a loved one can have distressing consequences – both emotionally and financially. In Australia, one in five families will be impacted by the death of a parent, or by a serious accident/illness that renders a parent unable to work. (Source: Lifewise/Natsem Underinsurance Report, February 2010.) Term life insurance provides a lump sum payment if you die, or if you are diagnosed with a terminal illness.
Term Life Insurance
With Term Life Insurance, your family will be provided with a lump sum payment if you die, or if you are diagnosed with a terminal illness. This benefit can be used to pay outstanding debts like a mortgage and credit cards. It can also provide a lump sum to be invested to cover the cost of future family needs, such as children’s education.
C. Total and Permanent Disability: modify your lifestyle
The probability of suffering an illness or injury between the age of 35 and 65, which results in total and permanent disability, is approximately one in ten. (Source: General Reinsurance Life of Australia.) Today, more than one million Australians need assistance with day-to-day activities, such as transport and communication, as a result of illness or injury. (Source: AIHW 2008: Australia’s Health 2008, Cat. no. AUS 99, Canberra.) Total and Permanent Disability (TPD) insurance provides you with a lump sum payment if you suffer an illness or injury and are permanently unable to work.
Total and Permanent Disability
Total and Permanent Disability (TPD) insurance provides you with a lump sum payment if you suffer an illness or injury and are permanently unable to work. This benefit can be used to help maintain your current lifestyle, and to ensure you are able to pay off your debts (mortgage and credit cards etc.). It can also help you meet medical and rehabilitation costs that arise as a result of an ongoing illness or injury.
Trauma Insurance: get better
In Australia, heart disease (including heart attack), strokes, dementia (including Alzheimer’s disease) and cancer are the four leading causes of death (Source: Australian Bureau of Statistics, 2011, www.abs.gov.au.) Trauma insurance provides you with a lump sum payment if you suffer a major medical trauma, which is particularly important when you consider that over 60% of cancer patients will survive for more than five years following their initial diagnosis (Cancer Council Australia; www.cancer.org.au/aboutcancer/FactsFigures.)
Trauma insurance provides you with a lump sum payment if you suffer a major medical trauma, such as heart attack or cancer, and is designed to help you obtain the best medical and rehabilitation care possible.
Personal Protection: how can Hunt Wealth help?
Hunt Wealth are experts in insurance advice. Not only can we recommend the right type – and amount – of cover for you and your family, but we can recommend tax-effective strategies to help make your insurance more affordable. We will guide you through the application process and liaise with the insurer during the underwriting process. Most importantly, we will be there at the time of making a claim to provide the guidance and support needed.
If you would like us to review your current policies, or arrange a complimentary, obligation-free meeting to assess your personal protection needs, please contact us at 8364 6555 or via firstname.lastname@example.org for more information.