Insurance

Personal Insurance

The following is an explanation of some of the more common the personal insurances available.

Life and Total and Permanent Disability Insurance

Life insurance provides protection for your family, asset base and financial plan by paying a lump sum in the event of your death. TPD insurance provides a lump sum in the event that you become totally and permanently disabled.  A disability may be either temporary or permanent, and the definition will vary from insurer to insurer.  In general, it is defined as the inability, through sickness or accident, to perform your usual occupation, and to be permanent, the person insured would be considered as never being able to work again.
At a minimum, you should insure for a lump sum sufficient to discharge any outstanding debts.  The insurance cover should also be sufficient to provide a reasonable lump sum, which can be invested to help meet any ongoing regular income needs of your survivors.

Trauma or Critical Illness

Trauma, or critical illness, insurance provides a lump sum payment on the occurrence of a specified health condition, or in the event of your death.  Conditions vary from insurer to insurer, although these will typically include:

Heart attack	Cancer	Stroke
Coma	Blindness	Multiple Sclerosis
Paraplegia and Quadriplegia	Coronary Artery Bypass Surgery

This cover should be sufficient to at least discharge any outstanding debts, and ideally to also provide a lump sum for possible lifestyle changes, treatment and investment purposes.

Income Protection and Business Expense

Income protection insurance helps replace your regular salary or earnings if you are unable to work for a period of time due to illness or accident.  Income protection provides a regular income stream for a set period of time.  You select the percentage of current gross salary or earnings that you wish to insure, up to a maximum of 75 per cent.  You also select the waiting period that is to apply before the insurer commences your regular income stream, which can range from 14 days to 24 months.  Finally, you select the length of time over which the benefit is to be paid, for example two years, five years, or to 65 years old.  The premium that you pay will be affected by these variables.
Business expense cover enables you to cover all expenses that will continue even when you can’t work such as rent, leases, some staff costs etc so that your business will survive if you are unable to work.
Premiums for income protection and business expense policies are tax deductible and benefit payments will form part of your assessable income.