We all know or have heard of someone who sadly died before their time, leaving behind a young family – or suffered an unexpected diagnosis or injury and was unable to work for months or years. These stories are horrific – and the first thing that often comes to mind are, ‘was s/he covered?’. While we can’t control what the future holds, we can take control of setting up a safety net and protecting our loved ones for if life goes pear-shaped.
The value of life insurance is well understood, but sorting out your personal insurance can be a mind field for many. Flooded by jargon, variances and options– it can be overwhelming to decipher what cover you will need to protect your family.
We’ve put together a guide to simplify life insurance for you:
Types of insurance
Life Cover – a lump sum payment made in the event of your death, to the person or people you have nominated as beneficiaries. This payment can help cover the cost of absolving any debt, covering the education for your children and living expenses of your bereaved family.
Total Permanent Disablement – a fixed lump sum that is paid to you in the event of total and permanent disability, to help cover costs such as living expenses, debt, medical support and care.
Trauma Cover – a payment that is made in the event of a specified injury or illness which prohibits you from working for an extended period of time. This lump sum will help you pay for living expenses and medical costs.
Income protection – In the event of injury or illness where you are unable to continue working, you will receive regular payments for a defined period of time.
Customising your insurance cover
Not everyone is aware of the ways in which insurance can be customised to meet your specific needs and reduce premium costs along the way. A conversation with your Axios adviser will cover options such as:
Stepped or levelled premiums – by arranging your insurance payment at a level premium from a younger age, your premiums will only go up moderately each year, rather than increasing steeply as you get older. You will pay a slightly higher premium to start with, compared to what your ‘stepped’ premium would be at your age, but over the life of your insurance cover, you can save yourself thousands. Dividing your insurance structure into a part stepped and part level policy, makes great sense too, in specific circumstances. We will be able to talk you through your options and make suitable recommendations for you.
Income Protection to Age – Standard income protection policies will cover you to age 60. With life expectancy in Australia at 82.5 years, many will choose to select an income protection product that will cover you until age 65 or 70, which can often make a world of difference in paying off debt, covering living expenses and funding retirement.
Paying through super – Most insurance types, apart from Trauma cover, can be arranged to be deducted directly from your superannuation. This means you don’t need to pocket the cost of insurance cover, which can be a great relief to many who see the critical value of appropriate cover, but can’t afford the premiums or worry these will affect cash flow in the short term.
Pre-existing conditions and exclusions – Income Protection, TPD and Trauma cover can be customised and negotiated for those with pre-existing conditions. A good financial planner will have the relationships, knowledge and negotiation skills to find you the most comprehensive and cost effective cover available on the market, even with a pre-existing condition listed. This may mean your cover will specify an exclusion for the named condition, but you can rest assured that you will receive cover for any unrelated injury or illness claim.
Reviewing life insurance regularly – Many people set up their life insurance, and rightly so, when they have a young family, lots of debt and huge expenses ahead in educating and raising their young kids. As your children grow and your home is nearly paid off, you may no longer need the original sum insured to cover these expenses and debts. By reviewing your life insurance regularly, we may suggest, based on your changing life circumstances, to reduce the amount you are covered for – in turn reducing your annual premiums.
There is no price to be put on peace of mind and the certainty that comes in knowing that your loved ones will be cared for in the tragic event of early death, disability, injury or illness. Understanding the basics of available products as well as how they can be customised to meet your specific needs, can ensure that when you speak with your Axios adviser, you’re armed with the right questions to ask and can feel more in control of creating peace of mind for yourself and your family.
Axios Financial Solutions are a team of respected and highly regarded financial planners with offices on St Kilda Rd Melbourne. Axios helps their clients meet their desired outcomes by providing tailored financial services, strategies, advice and solutions. You can contact them at firstname.lastname@example.org or (03) 9869 5555.
Axios Financial Solutions Pty Ltd (ACN 007 299 014), is an Authorised Representative of Charter Financial Planning Ltd, Australian Financial Services Licensee 234665
Please note that the information in this article is of a general nature only and has not taken into consideration your individual circumstances. Should you wish to discuss your personal circumstances please call us on 03 9869 5555 or email email@example.com.
Level 3 The Metropolis
480 St Kilda Road
Melbourne Vic 3004