Life Protection

We would do anything for them to keep them safe from harm or burden. We insure our house, our possessions and even our cars, but very few actively insure themselves and their loved ones against life-changing events that are often a significant burden to deal with.

So let us have a discussion about insurance now while you have the opportunity to assess its benefits for you.

What Is Insurance?

Insurance is a contract between you and an insurance company where you agree to pay small amounts of money on a regular basis (called a premium) and in exchange for this, you will receive compensation in the form of either a large lump sum payment, or in instalments over a set period of time, once a set event is triggered that is listed in your contract.

There are 4 main types of insurance contracts that are available relate to insure a human life.

There are other types of insurance contracts available but these are usually for non-human life, for example your car, a business, your house and your home contents. We discuss the insurance for human life further down the page.

Why Is Insurance Important?

It is important to insure your life against significant life changing events that may occur in future. Without insurance many people need to rely on family, friends or take on significant debt to try and get by.

Having insurance is one thing, but making sure that it is right for you is just as important. As many people in Australia have some insurance within their superannuation (not everyone), they can often feel as though they are covered, only to discover they are not when they need to make an insurance claim. In fact, there are statistics that show that insurance that we obtain without proper advice covers us on average for 14% of what we actually need to get by (Riskinfo). Not only that, but insurance can be expensive if you overlap the 4 main types of insurance that are explained below. There are also a myriad of options and features available like long term affordability (a level premium), CPI of your insurance to ensure it stays current with the value of money and around 40 other options.

A financial planner is an appropriately educated individual who is qualified to assess your needs and ensure that several insurance contracts are structured to ensure you are covered and that this plan fits neatly into the rest of your financial circumstances, for you and your family. This insurance plan fits together like a jigsaw puzzle so that you are not overlapping and paying for things you do not need.

Is insurance available to anyone?

No, insurance is assessed on a per person basis, as no 2 people are the same. Often you will have different medical history and life events that make you unique. All of these factors are assessed to ensure that an affordable premium is offered to you. So the healthier you are, the cheaper the insurance becomes. This is why during your financial planners discusses with you, several medical and lifestyle questions (if you are comfortable). This is to establish early on if insurance is available to you, how affordable it is, and if there are any amendments to your insurance contract. This helps your financial planner to ensure you are getting the best possible insurance arrangement before you are committed to a product or service.

How can I make sure I get value for money?

Insurance needs to be relevant and customised to your own personal circumstances. There is definitely not a one size fits all and this can be where a false sense of security can develop. It is therefore important to have a tailored insurance plan that is cost effective, has maximum coverage and is relevant to you so that any features you need to eliminate risk are attached, and not others that just cost more money without adding any value.

How is Insurance Obtained?

good example of this would be the main income source or ‘breadwinner’ in a family. If they were to pass away, often the family are faced with the prospect of not having enough money to pay back their debts, like a family home and may not be able to maintain the same lifestyle that they have been building towards. This can mean significant changes to their lifestyle like selling a house and renting, children to go to a cheaper school and selling assets to supplement income.

What Insurance typically covers:

Insurance Types

The next section will talk about the types of Insurances. Click below to view.