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Risk management is an important part of any financial plan. In many cases personal insurance is the appropriate mechanism to limit the financial impact of unforeseen events.
Many of us recognise the sensibility of organising life insurance to provide a lump sum to assist family members carry on financially in the event of our premature death. However the burning question for those with dependants is exactly how much insurance cover is required?
However many people underestimate the pressure that can be placed on their financial position due to illness or injury. Being unable to work due to illness or injury, even if for just a short period of time, can place a large strain on your finances, making it difficult to meet regular living expenses, let alone continuing a savings regime or meeting debt obligations.
In a similar fashion, suffering a medical complaint such as a heart attack, stroke, cancer, major surgery or paralysis is traumatic enough without adding the financial pressure for medical care and family assistance.
When it comes to personal insurance some people pay the price of leaving it too late.
It is one thing to suffer an insurable event and have no insurance cover in place, but it is another to make the decision to obtain personal insurance only to find out that your health has deteriorated to the point where certain health conditions are excluded or insurance cover is declined.
Generally, the longer you leave it, the harder it will be to obtain.
While the general purpose of the various types of insurance may be easily apparent it is also a very complex area. Rarely are two insurance policies the same – different features, benefits and costs. Furthermore it is important to consider the ownership of such policies in terms of funding the premium and where the money goes in the event of a successful claim.
As a result, it is critical to obtain professional advice.
The following commentary is designed to provide a brief overview of the common types of personal insurance currently available in Australia. This material is not comprehensive and it is not complete.
There are many types of insurance. Car or home/contents insurance allows you to insure your belongings. Personal insurance policies enable you to insure yourself and your ongoing wellbeing. Personal insurance provides protection against sickness, injury, and death, and includes:
The amount of insurance you need is affected by:
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Shorebridge Wealth Advisers is a boutique financial advisory firm with offices in Chatswood and Bella Vista. Our job is to help you plan strategies that will allow you to take control of your financial future. It’s our privilege to create lasting relationships with our clients and build lasting trust, ensuring each generation has the opportunity to live the life they want.
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