How can I protect myself and the people I love? (Personal Insurance)
- Insurance can be used to provide assistance in the unfortunate event of death or serious injury and illness
- This type of insurance is referred to as personal insurance and there are many different types available to protect you and your loved ones. Understanding the common types of insurance will help you figure out which insurance is right for you
- Ensuring you have a back-up plan in the event of unexpected death or serious injury or illness will give you the best chance of recovering from setbacks or overcoming grief from loss of a loved one
When thinking of insurance, many people can name examples of insurance that provides cover if their home or car is damaged or lost. But what about if something unexpected happens to your health or if you or a loved one is seriously injured or killed in an accident?
It can feel like a morbid topic but imagine if something bad were to happen to you. It would be a terrible time for your family having to deal with the grief of the situation, but also imagine if they were now worried about how they would make ends meet with you not around.
This is where personal insurance, such as life insurance, trauma and income protection can come into play. These types of insurance will pay out money (either as a lump sum or ongoing instalments) in the event of premature death, serious injury or illness.
Health insurance can also assist with medical costs associated with unexpected illness or injury, however there are can also be other benefits to medical insurance such as rebates on ongoing health care needs such as dental checkups, optometrist, medical costs of having a baby etc.
The choice to take out insurance is a personal one and will depend on your circumstances as well as your attitude to risk though the following table can help.
||Medical expenses such as dental treatment, hospital expenses, opticaltreatment, ambulance services, physiotherapy and Chiropractic. Different levels of cover available
- If you want to have more choice around access to medical treatment such as choice to go to a private rather than public hospital
- If you and/or your family utilise many health services
- If you are planning to have children
- If your income is over $90,000 p.a as a single or $180,000 as a family you will be charged a Medicare Levy Surcharge by the government if you do not have private health insurance
- If you are nearing the age of 30 or older as premiums have a penalty if health insurance is take out after the age of 30.
||Loss of income in the event of premature death
- As life insurance pays out a lump sum it should it can be used to leave money to a spouse or children in the event of unexpected death
- It its most relevant if you have a spouse and/or dependants or if you have large liabilities such as a home loan
|Life / Total Permanent Disability
||Loss of income in the event of premature death or a serious permanent disability such as quadriplegia
- Similar to Term Life but also pays out if you receive a permanent disability
||Medical costs and loss of income due to serious illness such as cancer or stroke
- If you are single you may wish to consider trauma as it can help to pay for any help or treatment you require and you may not have family to assist
- If you have a family history of serious illness. You would need to take up the insurance before you were diagnosed with any conditions
- If you have a spouse of family this insurance could help lower the stress and burden if you were to become seriously ill
||Loss of income due to being able to work
- When you are working in steady employment and are reliant on your income
- Income protection will pay out a portion of your usual income if you are unable to work due to health reasons
- Income protection insurance is a tax deduction so it can be more attractive to higher income earners as the tax deduction is effectively a discount on the premiums
||Cost of things that can go wrong while travelling such as cancelled flights and accommodation, illness or injury while travelling, loss or damage of personal items
Travel insurance is a bit of a hybrid as it covers both things and people (medical expeses)
- When travelling, in particular overseas where medical costs would not be covered by other insurance you may have.
- For more expensive or longer trips where there is a greater risk of something unexpected happening
- If you are travelling with valuable items such as camera equipment or laptops