Let's talk insurance. Income Protection, Trauma, Life, Total and Permanent Disability - the low down
Updated: May 17
Is your back up plan to move back in with your parents?
This is actually not that uncommon. “Yeah, I guess I'll have to move back in with Mum and Dad if anything goes wrong.”
You are relying on the “It won't happen to me” plan.
Your mum is using your old bedroom as a gym, and she doesn't want you to move back in!
Plus: The cost of having you “back home”, will come out of your parents' retirement savings. For them, this is a bad deal.
You can do better than this!
Yes, insurance is usually a part of a backup plan. The next thing people say is: "I think I have some coverage via my super."
It is unlikely that this cover will be sufficient. Nobody wants to pay for insurance. We hope that it will be "dead money" and that you will never be in a position to claim. BUT, if you suffer from an illness or accident and are unable to work, your insurance policy will be 𝗣𝗥𝗜𝗖𝗘𝗟𝗘𝗦𝗦!
Types of Personal Insurance - the low down
1. Income Protection Insurance
Income protection (also known as salary continuance) is a life insurance policy that replaces up to 75% of your income if you are unable to work for a prolonged period due to illness or an accident. Once you have satisfied the waiting period, the policy pays a monthly benefit for as long as you are off work or for the duration of the benefit period specified in your policy.
Why is it important to have Income Protection?
Statistics show that most of us are likely to be off work at some point in our careers. So the question becomes if you are injured or diagnosed with a serious medical condition and unable to work – how will you continue to pay your bills? As we know, Centrelink payments take time to process (and don’t pay much), so unless you have a generous rich Aunt willing to lend a helping hand, having an income protection policy is your best backup plan.
2. Life Insurance / Death Insurance
Lump sum payment paid to your Nominated Beneficiary, Estate or the Policy Owner if you die.
Why is it important to have Life Insurance?
This will protect your family's future and give them options if you are no longer around.
3. Total and Permanent Disability (TPD) Insurance
Lump sum payment if you are permanently disabled and unable to work in any capacity ever again.
Why is it important to have TPD Insurance?
Gives you options to help you live a better quality of life if you are permanently disabled and can’t work again. People often use TPD to help pay out a home mortgage, pay for medical and living expenses.
3. Trauma / Critical Illness Insurance
Lump Sum Payment if you are diagnosed with a covered illness or injury; e.g. cancer, heart attack, stroke etc.
Why is it important to have Trauma Insurance?
Proceeds can be used to take the financial pressure off. Proceeds can be used to cover medical expenses, repaying debt or allowing you (or a loved one) to take time off work.
Do you need an insurance backup plan?
We partner with some of Australia's best insurance specialists to ensure you have the coverage you need.
Get advice on all your personal insurance needs from a qualified financial planning advisor. To ensure you have the coverage you need, we partner with some of Australia's best insurance specialists. Book a clarity call with me.
Disclaimer: This information is provided and produced by Lush Wealth. Terms and Conditions of Insurance policies vary greatly. Ensure you read and understand the relevant Product Disclosure Statement. The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.