Let me tell you a dirty word. Insurance! Not exactly the world’s most favourite word is it? In fact I’ve never met a person who said “I love insurance”. (Unless of course, they were selling it or had just received a payment from it.) Why? Well it’s kind of a strange idea to buy something that you hope you’ll never use. But that’s the problem, isn’t it? It’s there for all those “What If…” scenarios that can happen in life.
These days you can insure yourself for just about anything. Most people seem to have car insurance, contents insurance, health insurance, and sometimes even pet insurance. As the new “insurance expert” here at Investors Direct, I thought I’d give you a little insider knowledge on some of the different types of insurance, you might need these days, particularly if you’re a property investor.
Income Protection: like its name suggests, this insurance protects your ability to earn money. If you get sick or injured, it can replace all or part of your income so that you can continue with life’s journey. Depending on your occupation, the policy and the options you choose, it may pay your income for a few months or it may pay you your income until you turn 70 years old.
Life Insurance: naturally this looks after those around you if you’re not around any longer to look after them yourself. Generally, if you pass away, this means you won’t leave your family with debt and financial worry. So if you have a family who depends on you, having this cover is almost mandatory.
TPD (Total & Permanent Disability): this insurance looks after you and your family if you lose your ability to work permanently. Different companies define this in different ways, but mostly, if you’re not able to do a significant portion of your occupation due to a disability, then the insurer will pay you out a lump sum. This is usually money you’ll need to accommodate a significant change in lifestyle.
Trauma (or Crisis cover as it is sometimes called) is a lump sum of money you’ll be paid in the event of a list of specific traumatic events. For example if you have a heart attack, get cancer, or develop different types of conditions or diseases, they’ll pay you out a lump sum which you use in order to cover expenses, change your lifestyle, or just take time off to recover.
One in three men and one in four women will be affected by cancer before they reach the age of 75. ( Source: Australian Cancer Research Foundation 2010.)
So the big question is, what insurances do you really need and when should you review them? Ideally it should be done any time your life circumstances change. e.g., if you get married, if you have a child, if you take on more debt, if you reduce your debt, if your personal income changes, etc.
You should also look at your insurance during each renewal cycle to see if there are better products out there or cheaper premiums.
Now we can offer you a free review of your current insurance needs. This can be done either in the comfort of your own home or in our offices on St Kilda Road, depending on which works best for you. We’ll look to see if you have too much cover, not enough cover, not the right types of cover, if you’re paying too much, or check to see if you’re covered for what you think you’re covered for. You’d be surprised how many people aren’t covered for things they thought they were covered for!
If you have any questions about insurance or I can be of any further assistance, please don’t hesitate to contact me by email at email@example.com or call 1300 663 836.