It’s an amazing fact that many people look after their belongings better than their own lives. Most people wouldn’t think twice about insuring a car, but what about insuring a life?
It’s not a good idea to focus on life’s downers but being prepared for them will make all the difference.
Could this be you?
You and your partner are in your mid-50s and both work full time. The mortgage is under control. If you continue to save at your current rate you expect that you will be able to retire with a comfortable income at age 60. Life is rosy until you are involved in a serious car accident and are unable to work for six months.
While you’re recovering, your partner takes three months off work to care for you. Then it takes another two years of working parttime before you’re finally capable of resuming full-time work. Your comfortable retirement has been delayed indefinitely.
If this happened to you, would you be able to cope financially during this period of illness? How would your lifestyle and retirement plans be affected?
Peace of mind
After an agreed waiting period, income protection insurance can pay an income for a short period or until you are aged 65 (depending on your needs and policy). That income will be a maximum of 75% of your current gross income. Obviously, the higher the required income, the higher the premiums will be. Some policies will also provide rehabilitation costs and income for your partner while that person is your nominated carer.
You might also be able to add a super contribution option, which means the insurer will continue to make contributions to your super while you are ill.
If you are self-employed it would be wise to add a business expenses cover option so that you can continue to meet some of the costs while you’re unable to generate revenue.
And don’t forget, income protection insurance policy payments are tax-deductible.
Here’s another scenario…
You are the sole breadwinner with young children and a large mortgage. You get an aggressive cancer that is terminal. You have both life insurance and trauma cover.
Cancer is usually a claimable condition for trauma insurance so when your cancer is diagnosed, you receive a lump sum payment. Your life insurance policy is within your superannuation fund. When you die your children and spouse are able to use the life insurance and superannuation money for allocated pensions for each of them. They will be able to continue living in their home and fulfil the plans that you had for them as they will have the financial support necessary.
Consider this carefully…
Do you have enough personal insurance to maintain your plans if adversity strikes? If not, make a time to meet with us to discuss your options. Please don’t leave it until you need it … it will be too late by then. Come and talk to us today to review your insurance needs.
