There are four main products in the world of personal insurance, and if you want to be covered for all eventualities, a measured amount of each is appropriate.
Once you’re fully informed, however, you may decide your circumstances don’t require a certain kind of coverage. Here’s a quick overview so you can compare personal insurance types. What you can ultimately claim on will depend on the insurance policy, options chosen and the insurance assessors’ determination.
What it does: Pays a lump sum to your beneficiary when you die or are diagnosed with a terminal illness with less than 24 months to live.
How much it delivers: You need to assess your income, age, health and family situation before determining what an appropriate payout would be. This may be used to pay off a mortgage, cover children’s education, provide an income for your spouse, cover funeral expenses and pay down any other debts.
How you pay for it: By annual or monthly premium to an insurance company. This can also be paid by your superannuation policy.
When it’s claimed: Your beneficiaries claim when you die, and sometimes it can be claimed if you’re diagnosed with a terminal illness, with less than 24 months to live.
What it does: Pays you a percentage of your salary if you’re unable to work because of sickness or injury.
How much it delivers: Up to 70% of your normal income for the time you’re unavailable for work, depending on the benefit period and waiting period that you choose.
How you pay for it: Tax-deductible, annual or monthly premiums to an insurance company. This can also be paid by your superannuation policy.
When it’s claimed: When you’re unable to work due to injury or illness, you’ll receive monthly payments after an initial waiting period. This lasts as long as you’re unable to work, or until the policy runs out.
What it does: Pays a lump sum if you suffer a critical illness or a serious injury.
How much it delivers: Depends on how much you applied for, and can help pay for medical treatment, or life’s general expenses until you get back on your feet.
How you pay for it: Annual or monthly premiums to an insurance company. This is not able to be paid by your superannuation policy.
When it’s claimed: In the event you become critically ill or injured and satisfy one of the many (approx. 50) definitions in the policy.
What it does: Pays a lump sum if you become permanently disabled and are unable to return to work.
How much it delivers: Depends on how much you nominated, and can help pay for medical treatment, a carer, and adapting your home to your new circumstances.
How you pay for it: Annual or monthly premiums to an insurance company. This is also able to be paid for by your superannuation policy.
When it’s claimed: In the event where an accident or illness leaves you permanently disabled and unable to work in any/own occupation that you are experienced, trained or educated in.
This is just a basic overview, however it gives you an idea of the range of coverage available.
If you’d like to compare personal insurance types in greater detail, you’re best to contact your adviser.
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