Personal Insurance Guide
Protect what is important to you
Why Invest in Property?
The older we get, it seems inevitable that we have more responsibilities; mortgages, car repayments and maintenance, children, school fees and never-ending bills. The people in our lives depend on us and our income for survival. If you are the sole or main income earner, it can be a crippling thought to imagine what would happen to your family if you died, could not work or suffered a serious illness or injury. Unfortunately, the bills keep coming or in fact can increase, when you have had a life changing incident. That is why personal insurance is so important for the stability and security of your family. Insurance is the back-up plan for when life hasn’t gone to plan, it can help to secure your family’s financial wellbeing.
Personal risk insurance can provide you with peace of mind. It shifts the financial burden to the insurers when certain life changing events occur such as a terminal illness/death, trauma or total and permanent disability.
Do I Need Cover?
The short answer is yes. It is very unlikely that you would not require any cover. If you have a mortgage or any debt, are relied upon for paying bills and or have dependents, you need personal insurance. The more pertinent question is what type(s) of cover do I need?
What Type of Cover Do I Need?
The decision to take out personal insurance is about limiting risk.
When reviewing the different types of cover, it is important to consider your personal circumstances and your risk profile. The type of cover you require will depend on your level of debt, your family situation and your profession. It is important to talk through your options with a professional Certified Financial Planner as they can guide you to make decisions appropriate for you and your family. In general, there are four main types of cover:
What Factors Will Affect My Premiums?
A premium is the amount you pay for your insurance. It varies for each policy holder and calculated taking into consideration several factors:
When is the best time to take out Life Insurance?
It is common for people to take out life insurance around major life events such as buying a house, getting married or starting a family. However, the earlier the better. Your health status can change at any time, but as a general rule the younger you are the healthier you are, and your health status affects your premiums/costs.
How Much Cover Do I Need?
The answer to this question is “it depends”. It depends on your personal and financial situation. When deciding on what types of insurances and what level of cover it is important to consider what ongoing financial obligations you have:
It is important to find a balance between the amount of premium you pay and affordability. Taking out insurance which is paid through your superannuation is an effective way of balancing this. It is important to seek expert advice to obtain the most appropriate solution for you and your family.
What Else Do I Need to Know?
There are different types of covers and most importantly different levels of cover. The quality of a policy is extremely important when making a decision about an appropriate policy. Cheapest is not necessarily the most appropriate for you. Do your research, know what each policy covers and decide which fits your situation.
There are different tax implications on policies you take out under different ownership structures. Talk to your financial adviser about this when selecting your policy.
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