Personal Insurance – 3 Types That You Need
Cars, businesses and other possessions are not the only things that insurance is meant for. Insurance coverage can also protect your family and you as an individual from financial hardship that unforeseen events can cause. This type of insurance is called personal insurance. There are even further classifications of personal insurance, depending on what the family or individual needs are. To help you out for better understanding about personal insurance visit Me Covered webpage.
This kind of personal insurance can also be referred to as life cover or death cover. In the event that you die prematurely, the financial stability of your beneficiaries and/or dependents will be safeguard by the life insurance policy. They will be paid a lump sum amount of money. Despite the benefits that this form of cover provides, unfortunately 60% of Australians that have children take an insufficient amount of life insurance cover to pay their spouse enough to support their children for a period of more than a year following the death of the insured individual (statistics from Australian Investment and Financial Services Association).
Life insurance cover can serve different purposes to secure a family’s financial status:
- clear any outstanding debts that could cripple the finances of your family
- provide funds to cover your loved ones living expenses
- protect your family from unexpected legal, funeral and medical expenses
- a method for bequeathing your wealth to specific beneficiaries and dependents
Total And Permanent Disability (TPD) Insurance
Due to unfortunate circumstances, should you become seriously or permanently disabled, there are two options available to you: receive a payout from Total and Permanent Disability (TPD) insurance or receive a disability pension from the government. Usually a government disability pension is insufficient for sustaining your current living standards, as opposed to TPD insurance. For example, Australia’s Bureau of Statistics reports that for 2011 average weekly ordinary earnings were $1,288.10. However, the disability pension for disabled spouses with children was only $670.90 every fortnight.
When you have TPD insurance, you will get a lump sum payment in the event you become completely incapable of ever working again due to injury or illness. This assures your financial security, since costly medical care is always associated with serious illness or injury. Also, this kind of personal insurance covers your regular living expenses as well.
Income Protection Insurance
When you safeguard the regular flow of your income against unforeseen circumstances, it is similar to safeguarding your vehicle from unexpected accidents. Despite this, only 31% of Australians own an income protection policy, whereas 85% of Australians do have auto insurance (statistics from IFSA and Taylor Nelson Sofres).
You are covered under income protection insurance against injury, illness or other issues that could prevent you being able to work. You will continuously receive monthly benefit payments for a maximum of 75% of your income. These payments will continue until you go back to work or for the stated benefit period. You could be incapacitated for quite some time, usually at least several months to a few years. Therefore, the monthly benefit payments that you get will help with paying your regular monthly expenses, including medical costs, utility bills and mortgage payments.
These kinds of insurance covers have been designed to help you and your family to handle the financial hardships that unexpected events can cause. This will ultimately provide you with peace of mind and ensure financial stability no matter what the circumstances happen to be.
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