“It’s regrettable but real-life events can and do impact people’s ability to make their mortgage repayments. That’s the reality,” says My Expert® Founder and CEO, Brett Wadelton.
“It’s not something we like to talk about but ask yourself how you or your family would pay the bills if you cannot work for an extended period of time due to an illness or injury, or even died. It’s something none of us can afford to ignore.”
If you don’t have financial protection in the form of adequate personal insurance, then you and your family aren’t protected for a rainy day.
Personal insurance protects the most important things in life: your family and your home.
When Brett made this comment in another blog a few months ago, we had no idea that not long after we’d be contacted by two clients facing real-life situations, just like those he’d highlighted.
Thankfully, both clients had personal insurance cover in place through My Expert® Wealth. That is in no way to diminish the seriousness of the predicaments that have impacted their lives. We are highlighting their situations as the financial support they have been able to access has provided a level of security and certainly they wouldn’t have if they hadn’t had personal insurance cover.
Real-life events can and do happen
The first client in his 40s and has been paid a terminal illness benefit of more than $250,000. His insurance policy had been in place for less than four years.
The second client, also in his 40s, sustained a serious workplace injury to his back and will be unable to work for the rest of his life. The Total & Permanent Disability Insurance paid him a lump sum payment and Income Protection cover will pay 75% of his gross full-time wage every month until the age of 65. The insurer is also providing support for medical bills and ongoing rehabilitation.
These real-life examples go to show that having the right insurance in place is vital to protecting your financial future, as well as providing the peace of mind that comes with knowing your loved ones will be supported if the need arises.
So what exactly is Personal Insurance?
When buying a new home or investment property, there are four main types of Personal Insurance that are there to provide financial security and peace of mind:
1. Life Insurance
In the event of death, Life Insurance pays your beneficiaries a lump sum benefit and is designed to ensure your family and loved ones won’t be left with a large financial burden. Most people think Life Insurance is only for the main income earner; however, the person who takes care of the family is also a significant contributor to the home and can be insured.
2. Income Protection Insurance
This cover (also known as salary continuance or income replacement) is designed to provide you and your family with a monthly payment to replace lost income if you can’t work due to an illness or disability. Insurers will generally pay a benefit of up to 75% of your gross income up to the age of 65.
3. Total and Permanent Disability (TPD) Insurance
TPD provides a benefit if you are totally and permanently disabled. Where Life Insurance pays a benefit upon your death, TPD supports you and your dependents if you are seriously ill or injured, making it difficult or impossible to continue to work. You can purchase TPD as an add-on to life insurance, or as a stand-alone cover.
4. Trauma Insurance
Also known as Critical Illness insurance, this cover provides a one-off cash lump sum if you suffer a serious medical condition. This may include cancer, heart attack or stroke. You would therefore be likely to have substantial medical bills to pay, which is where this cover can give you instant security by providing money when you most need it.
Insurance as part of Superannuation
Life, Income Protection and TPD insurances are all offered within superannuation. If your insurance is held within your super the cost of the premiums is withdrawn from your super balance. It’s important to work out the best way to structure your insurance, whether inside or outside your super, or a combination of the two.
Obtaining insurance cover is a simple process. We have a range of loan protection and personal insurance products that can be tailored to suit your specific needs.
To find out more, get in touch with our Wealth Advisor today. Call 1300 My Expert (1300 693 973) or complete the online enquiry form on our website.
Disclaimer: The information provided in this blog is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information in this blog you should consider the appropriateness of the information having regard to your objectives, financial situation and needs, and it is important for you to consider these matters and to seek appropriate legal, tax and financial advice.
Pinnacle Advisory Pty Ltd trading as My Expert® Wealth ABN 36 638 505 950 is a corporate Authorised Rep of MG Wealth Advisors Pty Ltd AFSL n. 496089 ABN 20 617 338 137.