Insurance and risk cover can help protect your financial plan when life does not go as expected. Understanding options such as life insurance, income protection, total and permanent disability insurance and trauma cover can help you consider how you and your family may manage financially if your circumstances suddenly change. Reviewing your cover as your life evolves can help ensure the protection you have remains relevant to your needs.
Insurance can play an important role in protecting the progress you have made financially. A major illness, injury, disability or death can affect income, savings, debt repayments and your family's financial position.
Having appropriate risk cover can help provide financial support when unexpected events occur.
Different types of personal insurance are designed to protect against different financial risks. The right combination will depend on your circumstances, income, debts, family responsibilities and existing assets.
Life insurance can provide a lump-sum payment if the insured person dies. It may help family members manage expenses such as a mortgage, other debts, education costs and everyday living expenses.
Income protection insurance is designed to provide a replacement income if you are unable to work for a period of time due to illness or injury.
For many people, their ability to earn an income is one of their most important financial assets, making income protection an important consideration within a broader financial plan.
Total and permanent disability insurance may provide a lump-sum payment if you become permanently disabled and meet the policy conditions.
Trauma cover may provide a lump-sum payment following the diagnosis of certain serious medical conditions. These funds can potentially help with medical expenses, debt repayments or changes to your lifestyle.
Some life, TPD and income protection insurance may be held through superannuation.
While this can be convenient, it is important to understand the level of cover, premiums, policy definitions and how the insurance fits alongside any cover held outside super.
Your insurance needs can change as your life changes. Buying a home, having children, changing income, taking on debt or approaching retirement can all affect the level and type of cover you may need.
A financial adviser can help you review your insurance and risk cover as part of your wider financial plan and consider whether your existing protection remains appropriate.
