A snapshot overview of personal insurances
In terms of life expectancy, on average, a 30-year-old can expect to live 52 more years to 82 (male) or 56 more years to 86 (female).
Notably, from a health (and financial) risk perspective, the probability of claiming on a life, total and permanent disability (TPD) or trauma insurance policy by age 65 is 27.96% (male) or 23.33% (female).
Though, something important to note, according to research on personal insurance uptake and coverage:
- approximately 94% of Australian workers have life insurance. However, the median level of cover is $143,500, which is only around 2 times the median household income.
- approximately 81% of Australian workers have TPD insurance. However, the median level of cover is $99,500, which is less than 1.5 times the median household income.
- approximately 33% of Australian workers have income protection insurance. And, the median level of cover is 36% of the median household income.
In light of the above, establishing an appropriate personal insurance plan can be a key consideration for wealth accumulation and related health (and financial) risk management strategies. It’s a plan B or safety net in the event of your spouse, or your own, unexpected passing, disabling sickness or injury, or traumatic event.
Below is a snapshot overview of the main personal insurances—life, TPD, trauma, and income protection.
Personal insurances
Life insurance
Life insurance provides a lump-sum benefit payment in the event you were to pass away. Depending on your personal circumstances (your financial situation, goals and objectives), the lump-sum benefit payment could assist with one or more of the following:
- Debt reduction.
- Income generation.
- Other areas such as children’s education and funeral costs.
Some key considerations for life insurance can include, but aren’t limited to: sum insured, ownership structure, policy structure, and premium style and frequency.
Please click here for more information on life insurance.
TPD insurance
TPD insurance provides a lump-sum benefit payment in the event you were to become totally and permanently disabled due to a sickness or injury and therefore unable to work again. Depending on your personal circumstances, the lump-sum benefit payment could assist with one or more of the following:
- Debt reduction.
- Income generation.
- Lifestyle modification.
- Immediate and ongoing medical expenses.
Some key considerations for TPD insurance can include, but aren’t limited to: sum insured, ownership structure, claim definition, policy structure, and premium style and frequency.
Please click here for more information on TPD insurance.
Trauma insurance
Trauma insurance provides a lump-sum benefit payment in the event you were to suffer a specified traumatic event, such as heart attack, stroke or cancer. Depending on your personal circumstances, the lump-sum benefit payment could assist with one or more of the following:
- Debt reduction.
- Lifestyle modification.
- Living expenses for a period.
- Immediate and ongoing medical expenses.
Some key considerations for trauma insurance can include, but aren’t limited to: sum insured and specified traumatic event coverage, policy structure, and premium style and frequency.
Please click here for more information on trauma insurance.
Income protection insurance
Income protection insurance provides monthly benefit payments in the event you were unable to work for a period of time due to a sickness or injury. Depending on your personal circumstances, the monthly benefit payments could assist with one or more of the following:
- Living expenses.
- Mortgage or rent payments.
- Other household bills such as groceries, utilities, school fees, and healthcare.
Some key considerations for income insurance can include, but aren’t limited to: sum insured, ownership structure, claim definition, premium style and frequency, waiting period, and benefit period.
Please click here for more information on income protection insurance.
As outlined above, each of the main personal insurances serve a specific protection purpose. Collectively they can provide overall protection from whatever life may throw your way from a health (and financial) risk perspective—an unexpected passing, disabling sickness or injury, or traumatic event.
It’s important to note, that when it comes to personal insurances, there are many different offerings out there, each with their own varying degrees of protection. Therefore, when it comes to an appropriate personal insurance plan, it’s not a one-size fits all or set-and-forget approach. We can help you with establishing something that is not only good quality, but has been customised to meet your personal circumstances.
For specific advice customised to your individual circumstances, contact Carrick Aland’s multi award-winning Wealth Planning team on 07 4669 9800 or visit carrickaland.com.au/wealth-planning/.
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