What is personal insurance?
What are the differences types of cover available?
Who can pay for which policy?
Tyron Mitchell from Orange Financial Planning often says, “You do not need to cover yourself to have the same payout as winning the lottery, but you need enough to cover your current debts and future lifestyle”.
It is important to have adequate / comprehensive cover which has to be underwritten (To answer questions about your current and past health conditions) by the chosen insurer to determine the level of cover and benefits / features that can be offered.
By doing this it is more likely if an accident or illness happens to you, your retail insurance policies would be more likely to provide a payout to you or your family.
This is compared to default insurance given to you when you opened up a new superannuation fund and no health questions where assessed. This cover is generally limited and will most likely only cover you for a few accidents or illness events.
Below is a basic summary of each type of insurance cover.
Life Insurance – A life insurance policy pays a lump sum amount in the event of the insured’s death to a beneficiary, third party or an estate. Mainly held inside super can be self-owned.
TPD Insurance – Total and Permanent Disability (TPD) provides a lump sum payment in the event of total disablement. Mainly held inside super can be self-owned.
IP Insurance – Income protection covers up to 75% of an insured’s income and provides a monthly benefit (up to age 70) if the insured is unable to work as a result of an illness or accident. Mainly held inside super can be self-owned for tax reasons.
Trauma (CI) Insurance – Trauma insurance provides a lump sum payment in the event that you are diagnosed with one of a number of specified medical events. These may include such events as malignant cancer, heart attack, stroke, blindness etc. Only held outside super.
If something should happen to you, can you survive with your current debts and living expenses with no income up to age 65?
Personal insurances are generally cheaper to own inside super. My best advice is to book an appointment on our website to discuss getting a tailored plan that works best for you.
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