“If a child, a spouse, a life partner, or parent depends on you and your income, you need life insurance.”
– Suze Orman –
If you have debts or dependents, it’s important to consider how financially prepared you are for life-changing tragic events, such as the unexpected death or illness of you or your partner. How would you or your family take care of bills such as your mortgage, or day-to-day expenses if you were unable to work?
Just the same as when you insure your house and your cars, protecting your income, wealth and your lifestyle can also be managed effectively and economically.
At your first consultation, your Odyssey Financial Adviser will explain the process involved in developing and implementing an effective and relevant financial plan. They will also outline any costs or fees that may be incurred.
There are five key types of personal protection insurance. Life insurance, Total & Permanent Disability Insurance, Trauma Insurance, Income Protection and Child Trauma Insurance.
1. Life Insurance
Provides a lump sum payout on death or upon the diagnosis of a terminal illness which will lead to death within the next 12 – 24 months (terminal illness benefits vary from company to company).
This cover helps to eliminate likely financial hardship after the death of a spouse, particularly of the primary income earner. This cover will help to pay outstanding debts, such as a mortgage, and leaves a lump sum to be invested to cover the cost of future family needs such as children’s education.
2. Total & Permanent Disability (TPD) Insurance
TPD provides a lump sum of money if an accident or sickness leaves you permanently unable to work. TPD can cover you if an accident or sickness results in you not being able to live independently, while providing funds for care or assistance as required.
A key benefit of TPD is that it eliminates financial hardship in the wake of being unable to work again. The money may be used to pay debts and/or leave a lump sum to replace income. TPD provides financial assistance to ensure your needs are taken care of and your family can continue to maintain their lifestyle.
3. Trauma (Critical Illness) Insurance
Provides a lump sum payment to help you financially while you take time out to recover from a serious illness. It is designed to pay out a lump sum on diagnosis (or occurrence) of one of a list of specified serious medical conditions and procedures. Each insurance company maintains their own unique list, but they generally include serious medical conditions such as cancer, heart attack or stroke.
4. Income Protection
Provides a regular payment, generally per month in arrears. Income Protection will replace up to 75% of your usual monthly income when you are off work due to accident or sickness. Premiums paid are generally tax deductible, whilst any claim benefit received is income tax assessable. This helps to eliminate hardship and protect your family’s lifestyle by providing a replacement income should an accident or sickness strike the income earners.
5. Child Trauma Insurances
Provides a lump sum in the event that your child is diagnosed with a specific illness (as described in the policy) or dies. This cover is usually taken in conjunction with an adult’s Trauma policy. A lump sum payment may help with medical expenses, rehabilitation, home modifications or funeral costs.
