IS LIFE INSURANCE REALLY WORTH THE INVESTMENT?

Although people generally think of life insurance as just that – insurance which covers your life in the event of death – there are actually several types of life insurance policies.

Among the hundreds of life insurance plans and packages available to Australians, there are four main covers to consider if you are a mortgage holder. These four main types of insurance are life insurance, trauma insurance, income protection insurance and total permanent disability insurance. They all have the same basic purpose – give security to you and your family by paying a benefit that would help you adjust to the major changes in life, such as death, injury, illness, or disability.

Read on to learn some of the key benefits of these insurances and find out how you can benefit from cover.

1. Life Insurance – pays a lump sum on your death or the diagnosis of a terminal illness. So when the worst happens, your foresight will pay off the mortgage and other debts, provide for your children’s education, obtain child care and secure your family’s lifestyle. This will allow your family to focus on supporting each other, not worrying about paying the bills. As the years pass they will continue to be thankful you thought ahead.

2. Trauma Insurance (Critical Illness Insurance) – pays a lump sum on the diagnosis or occurrence of one of a list of specific illnesses such as heart attack, cancer or stroke. That payment gives you choice and flexibility at a time when you need it most. You will be able to reduce your working hours, spend time with your family, get treatment or rehabilitation and pay for a carer and any number of unexpected things.

3. Income Protection Insurance – provides a replacement income of up to 75% of your current income if you are unable to work due to illness or injury. Also known as ‘Income Replacement Insurance’, ‘Disability Income Insurance’ or ‘Salary Continuance Insurance’, it can cover you for short or long periods and offer various waiting periods to suit your needs. Depending on the policy, payments may continue right up to the age of 65 if the disability is ongoing or permanent.

4. Total and Permanent Disability Insurance – pays a lump sum if you become disabled and are unable to ever work again. You can use this lump sum to pay off debts, cover medical costs and invest so that you have an annual income to help maintain your lifestyle.
Don’t forget Building Insurance – Protect your building, including permanent fixtures and fittings from a range of damaging events you can’t control.

Want more information on insurance? Contact us for a FREE no obligation consultation on 03 8390 5855 or email mitesh@thinkandgrowfinance.com.au