Personal Risk Insurance
WHAT IS PERSONAL RISK INSURANCE?
Personal risk insurances provide a financial benefit in the event of you suffering a serious injury or illness, or death. They include term life insurance, total & permanent disablement insurance, income protection insurance, and trauma insurance. Most families and businesses are carrying significant financial risk should the unexpected happen. The big question you have to ask yourself is:
“Would your family be able to maintain their lifestyle if you no longer earned an income?”
If your answer to this question is no, you need to consider personal insurance.
Personal Risk Insurance isn’t just for if you lose your life… it’s also for if you lose your ability to earn an income. What position would you or your family be in tomorrow if you were to die or could no longer earn an income?
Insurance advice takes into account many issues, including ongoing living expenses, repayment of debts, and special expenses like schooling. It might also take into account the financial cost of fulfilling the aspirations of your dependants and other people close to you. And, if appropriate, your desire to leave a philanthropic legacy.
In the case of you suffering a severe illness or injury, you should also take into account the potential cost of hospitalisation, surgery, medicine, rehabilitation and home nursing costs. You should also consider the possibility you may need to make modifications to your home to make it easier for you to get around.
PERSONAL RISK INSURANCE TYPES
Personal risk insurances to consider include:
- Life insurance– pays a lump sum on the death of the insured.
- Income protection insurance– replaces your income if you are unable to work due to sickness or injury. It provides a monthly payment of usually up to 75% of your pre-tax income.
You can generally choose the waiting period (this is how long you must be unable to work before the insurance begins to pay you) and the benefit period (how long the policy will pay you if you are unable to work).
- Trauma insurance– pays you a lump sum on the diagnosis of a specified non-pre-existing illness or injury, generally including heart attack, stroke, cancer, and paraplegia. This can be taken as a standalone policy, or attached to a life insurance policy.
This insurance was created when it was realised that medical advances were resulting in patients increasingly surviving major health problems, but that the financial cost of survival was prohibitively high for patients (e.g. medical costs, medicine, time off work, rehabilitation etc). In other words, patients didn’t lose their lives… they lost their life savings instead.
HOW CAN WE HELP?
At Geelong Financial Group, we help you define your vision of a secure financial future for you and your family – and then help you to calculate how much money you’ll need to fund that vision – if you die or no longer earn an income due to serious illness or injury. We’ll then assess if you can afford to self-fund your vision, or whether you need to consider transferring some or all of that financial risk to an insurance company. It’s all about protecting your family from unnecessary financial duress.
Our job then is to research the major, reputable insurance companies to find the insurances which provide you and your family with the right level of protection, including the definitions, clauses and exclusions which best suit you. Of those insurances which meet your needs, we obtain quotes to ensure we recommend the most cost-effective products.
If you have a moment to learn more about just some of the family cover options available, this short video explains a few of the many benefits GFG offers.