The starting point for any financial plan is to ensure that you’ve protected what you already have. But you need to go further than that, and make sure that your future earnings potential is protected through the use of personal risk insurance.
Personal Insurance encompasses 4 different types of cover; Term Life, Total and Permanent Disability (TPD), Income Protection and Trauma Cover. The level of underinsurance in Australia is an enormous problem, with a large percentage of the population relying on the automatic insurance within their chosen Industry or Employer Super Fund. In reality the level of cover provided by such policies is only a portion of what is really needed.
There are many misconceptions regarding personal insurance and the reasons that people need the cover. The most important function that the cover provides is to ensure that the life insured’s income is protected, both now and in the future, regardless of any health concerns they might face.
It doesn’t matter whether you have decided on a regular savings plan or an investment in property as part of your financial planning, if you do not have adequate personal insurance in place then you are risking failure for reasons that are outside of your control.
Below is a table that shows the claims experience of our clients. You might be surprised to see that while larger amounts are claimed on life insurance policies, it is income protection that is claimed on far more frequently, and really should be the cornerstone of your financial planning.
|Policy Type||Number of Policy Holders||Number of Claims||Amount Paid||Percentage of Total Claims Paid|