Life insurance at its basic
Should a life-threatening emergency pop up right now will you or your loved ones be able to cover it financially? Almost 1 in 5 Australians do not have more than $500-1,000 to cover an emergency. Sadly, Australians are underinsured for life insurance at the total of $12.8 trillion p.a. Life insurance is a policy that pays out a lump sum of money in the event that a loved one passes on.
The amount that is paid out is according to how much you are willing to pay in premiums. It ensures that the lifestyle that your loved ones continue when you are no longer around to support them financially.
But what happens in the event where you are not able to support them while you are alive due to illness or injury that can possibly escalate to a permanent disability? This is where you need to bundle up other life insurance policies.
Income protection is a great way to bundle up with your life insurance policy that will help protect you should anything go wrong right now. According to Safe Works Australia, 3,414 workers have suffered a fatality. 10% of serious claims were due to disease of which mental illness accounted for 6%. In the event where you find yourself unable to work due to illness, injury or a major trauma, income protection will payout up to 85% of your income until you return to work. This can ensure that the bills continued to be paid while you spend your time recovering.
Trauma insurance, which is also known as critical illness cover, is there to protect you should you go through a traumatic illness that alters the way you live. These critical illnesses can be cancer, stroke, heart attack, or even muscular dystrophy to name a few. Trauma insurance cover can help you pay outstanding debts, ongoing living costs, rehabilitation expenses and any modifications that need to be done to your home in order for you to recover with a peace of mind.
Total or Permanent Disability cover is a policy that covers you for injuries or illness that force you out of work permanently. This means that you cannot hold a side job that generates any form of income due to your injury or illness.
Your normal physical functions might come to a stop, but financial commitments never do. You want something to take care of you when you are unable to do so. TPD also pays out a lump sum so that you can take care of bills, ongoing costs, medical bills, and adjustments to the home.
Each policy has different features. Therefore, you need to find features that are suitable for your lifestyle and financial situation. Having more than one policy is a savvy move to keep you protected. However, it is important that you compare and read the fine print of each policy to get the best deal.