Personal risk insurance such as Life, Total and Permanent Disability, Income Protection and Trauma insurance are all important.
In the event of death or disability, these types of insurance can ensure that financial turmoil isn’t added to the emotional stress involved when someone passes away or is seriously ill.
It’s not uncommon for people to dismiss the need for personal insurance cover though. All too often they believe they are adequately covered through their default superannuation insurance, which more often than not couldn’t be further from the truth. “It’s ok, I’m covered through my super fund” is a comment often heard.
Take this example of the default insurance cover provided for a 35 year old in one of Australia’s largest industry superannuation funds:
Life insurance (pays out upon death) – $180,000
TPD insurance (pays out when the claimant is never able to work again) – $53,000
Income Protection (pays out when the person can’t work temporarily due to illness or injury) – $3,000 per month for 2 years
Trauma insurance (pays out when the person is diagnosed with various “traumatic” health conditions) – NIL
On the face of it, this might seem like a reasonable level of insurance cover for a 35 year old to have.
What, though, if they die and leave a $500,000 home loan for their partner to repay? Will $180,000 cut it?
What, though, if they can never work again but still have a $500,000 home loan, medical bills and home modifications to make – will $53,000 cut it?
What, though, if they are temporarily unable to work and need to replace their $6,000 per month income – will $3,000 cut it (and only for two years!)?
What, though, if they suffer a serious Trauma condition and need money to seek better medical treatment – will “NIL” cut it?
Of course everyone’s financial position is different. Not all 35 year old’s have a $500,000 home loan. Some don’t have home loans at all, others have higher levels of debt and others have lower levels. The point though is that it can be downright foolish to assume your super fund has you adequately insured.
Take the time to review your own unique personal insurance needs. Ideally use a financial planner who can explain the various features, benefits and costs in a manner you can understand.
And remember, it’s too late to get insured after the fact.
For help with all your personal insurance needs, give the team at Steve May a call and start a conversation today.
You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Sensibly Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website
Nick Shanley, Steve May, Luke Styles and Shanley Financial Planning T/A Steve May Financial Services are Authorised Representatives / Corporate Authorised Representative of Sensibly Pty Ltd, AFSL 533923. Please refer to our website at www.stevemayfs.com.au to reference our Financial Services Guides.
Shanley Financial Planning Pty Ltd trading as Steve May Financial Services (ABN 19 612 825 180) is a Corporate Authorised Representative of (1265706) of Sensibly Pty Ltd (AFSL 533923)
Nick Shanley, Steve May and Luke Styles are Authorised Representatives of Sensibly Pty Ltd (AFSL 533923)