Do You Need Personal Risk Insurance?

"I see my role if needed as a financial mentor but one who can show warmth, practicality and empathy."
-Katherine Hann
February 23, 2016

Do You Need Personal Risk Insurance?

By Katherine Hann

Do You Need Personal Risk Insurance?

Do you need Personal Risk Insurance?
The answer is probably, yes!
Did you know that 95% of Australian families do not have adequate insurance cover?
It is a common fact that most families will insure their car which may be valued at $50,000, their home contents valued at $100,000 but not their income valued at $1,000,000!
The reason for personal insurance may be a scary topic but it’s nevertheless a crucial part of any financial plan.
If you’re not sure that you really need personal insurance, ask yourself the following questions:
• If you died, would your family be able to survive without your income?
• Could your children still go to a private school, go on holidays or be able to have those little luxuries you always wanted for them?
• If you had a bad accident or a long-term illness, how would your family pay the bills?
• If you don’t have a family, who would look after you and would you be able to afford the care?

What are the types of personal risk insurance?
There are basically four different types:
Life insurance
A lump sum payable on death or terminal illness. This can help support your dependants to maintain living standards or pay off debts.
Total and permanent disability (TPD) insurance
A lump sum to help support you if you are totally and permanently disabled due to illness or injury.
Income protection insurance
A monthly income stream to help support you if you are temporarily unable to work because of illness, accident or injury.
Trauma insurance
A lump sum to help support you if you are diagnosed with a specified major medical condition (eg. heart attack, stroke or cancer).

Ways your adviser can help
• Your financial adviser can help interpret the various insurance policies and find the right mix of cover to suit your needs.
• They can outline the pros and cons of waiting periods, different insurance providers and premiums (cost).
• Based on your current investment portfolio and earnings they can ensure your level of income is protected should the unexpected happen.

It usually takes something frightening, like a friend or family member who gets sick or has an accident that causes a personal wake-up call-don’t leave it too late, contact your financial adviser today!