… and almost a third of people over the age of 45 who retire early, do so due to ill health and injury.
Don’t risk it
Risk insurance is critical when it comes to setting up your future.
It provides the money you need when things go wrong. Imagine what your life would be like if you or your partner became seriously ill and couldn’t work: would you be able to survive financially?
For example, should you lose the ability to earn an income through illness, injury or disablement, risk insurance can assist with financial goals and obligations. In an event such as death, it ensures security by providing financial protection for your family. For a business, it allows partners to continue running the firm without added capital strain. Moreover, it shifts the financial burden from you to the insurance provider.
Managing risk or planning for risks before they occur is the easiest way to protect what you have but how much cover do you really need? There is no exact answer. Obviously more insurance gives you more protection, but it also depends on what you can afford. The type of risk insurance cover will depend on a number of factors, such as:
- Lifestyle needs
- Personal financial circumstances
- Business requirements
What insurance types are available?
There are different types of cover so depending on your circumstances, you may need one or more. Allied Investment Group advisers provide advice on life or disability insurance, income protection and trauma/crisis insurance, which can be tailored to suit your needs. For example:
Life cover — alleviates the financial burden your family or business associates may be left with after your death. It is paid as a lump sum that beneficiaries can use at their discretion to assist with medical costs, funeral expenses, to repay debts or help to secure their future. There are a number of optional benefits within Life cover that allow the insurer to apply for more features to cover things such as school fees, future expenses to family protection or skilled staff leave to injury in the workplace.
Total and Permanent Disablement (TPD) — provides a lump sum in the event of a permanent disability that prevents the insured from returning to work. It is often bundled together with life cover policy. The funds can be used at the beneficiaries’ discretion to provide for dependants or to compensate for the loss of income, to repay debts or cover medical costs as well as fund lifestyle adjustments such as wheelchairs, ramps and manual car controls.
Trauma insurance — provides cover if the insured is diagnosed with a specified illness or injury. It includes major illnesses or injuries that will make a significant impact on a person’s life, such as cancer or a stroke. It is also referred to as crisis recovery insurance and is often paid as a lump sum. Like TPD, funds can be used at the beneficiaries’ discretion, for example, to pay for additional medical care, or to pay off the mortgage to relieve financial pressure. More importantly, funds can be used to cover rehabilitation, carer or day-to-day costs.
Income protection — is an important consideration for anyone who relies on a salary because it replaces the income lost through your inability to work due to injury or sickness. It is especially suitable for the self-employed, small business owners or professionals whose business relies heavily on their ability to work. Income protection usually provides a monthly benefit of up to 75 per cent of your salary for an agreed time period. It can also ensure that business continuity is catered for even when the owner can no longer run the business. Premiums paid for this type of policy are generally tax-deductible, and you may also be able to pay for this type of insurance through superannuation.
Allied Investment Group advisers can investigate the most cost-effective and appropriate cover for your specific circumstances.