Personal Insurance | a quick guide!
Insurance is vitally important for anyone who is thinking about their future and that of their family. There are a number of different types of financial protection offered by insurance, including protection against the costs of burial expenses, medical costs, compensation for lost income and the discharge of debts. Here are the main types of personal insurance products available that can be used to safeguard your family’s financial well-being:
Term Life
Life insurance is designed to provide a lump sum payment to your beneficiaries if you die or are diagnosed with a terminal illness. This payment can be used to clear debts such as a mortgage, or to go towards ongoing expenses, such as education costs for children.
Total and Permanent Disability
Total and Permanent Disability (TPD) insurance is designed to pay out a lump sum if you suffer an accident or illness which leaves you unable to work again. This can be taken out in conjunction with term life insurance or on its own. You generally have a choice of ‘own’ occupation if you are unable to carry out your usual employment or ‘any’ occupation, in case you are unable to work at all, even in a different occupation.
Trauma
Trauma insurance covers traumatic health events such as coronary heart disease and stroke which might not leave you permanently disabled, but could still impact your ability to work and earn an income. Payment is usually made on the diagnosis of a ‘qualifying condition’ which will vary according to your policy.
Income Protection
Income protection insurance is intended to replace a portion of your income should you be unable to work for a significant amount of time due to illness or injury. Payments are made on a regular basis and can cover up to 75% of your income.
Knowing what kind of insurance is the most suitable for your individual situation can be difficult and it’s worth seeking professional advice before deciding on a policy. For advice, speak to a financial planner .