The uncertainty in life is what makes insurances so important. Although we can never predict what will happen to us, with the right insurance policies we can be sure that we can protect ourselves and our family against financial hardship.
We all know the importance of insurance. We insure our cars and our family home without even thinking about it, however sometimes we neglect to insure our family’s future and the things that really matter. When tragedy strikes it is always hard for a family to cope with the loss of a loved one. But what would happen to your family if they were no longer able to pay the mortgage or provide for the day to day living expenses?

Accidents and illness can affect all of us and medical costs can be very high. What would happen if you were unable to work and earn an income?

The uncertainty in life is what makes insurances so important. Although we can never predict what will happen to us, with the right insurance policies we can be sure that we can protect ourselves and our family against financial hardship.

We have helped many families provide for uncertainty and can offer you a range of personalized policies to suit your circumstances as well as various options to suit your affordability.

Please click on the tabs below for a description of the types of cover available.

Term Life insurance gives you, or your family, cover in two ways:

  • It will pay you the amount you are insured for if, within the term of the cover, you became diagnosed with contracting a terminal illness and;
  • It will pay your beneficiaries the same insured amount if you were to die before the term of insurance expired.

The proceeds of a term insurance pay out can be used for any purpose whatsoever, on most occasions it is used to pay out the mortgage on your home and to provide income for the family while the children are at school. Whatever is decided the family can be assured it will be able to continue in its accustomed lifestyle as if you were still with them.

The main benefits obtained with term life insurance include:

  • Death and terminal illness benefit.
  • Funeral money advancement while your family is waiting to have the total amount of proceeds cleared.
  • Disability cover can also be attached along with living insurance benefits.
  • Inflation protection is included meaning that the pay out will always represent the real value of the cover which complements the included financial planning benefit.
  • You are able to nominate whoever you want as being beneficiaries.
  • The premiums can be funded through your superannuation

TPD insurance is designed to prevent you and your dependants falling into financial ruin should you find yourself unable to ever work again because of any serious injury, or illness you have contracted. The lump sum benefit paid can help cover your cost of living expenses, the payment of your outstanding debts and any medical and rehabilitation costs. In fact anything at all that will make your future financially worry free. In this sense it’s much the same as life insurance except you remain alive to benefit from the cover alongside your loved ones. It can be obtained as a stand alone policy or be made additional to a term insurance policy.

TPD benefits are not normally paid until the disability you’re suffering from has affected your way of living for a six month period, or your insurer decides beforehand that you’re unlikely to ever work again. There are also two options you get to help define your occupational cover. One option you have is to choose for the policy to pay out if you’re deemed to not be able to earn a living in your own occupation and the other covers you for being unable to return to work in any occupation whatsoever:

  • Your own occupation means you specialise in some particular field and can no longer take part in this occupation ever again even though you may be capable of carrying out different duties for which you’ve never been previously trained.
  • Any occupation means that the illness or injury you’re suffering from prevents you from carrying out any type of work whatsoever.
  • Home duties

As with most other life insurance contracts TPD, insurance premiums are based on your age, your gender and your lifestyle habits, especially whether or not you smoke. Your occupation is also an important factor in that if you’re a manual worker you’ll have to pay a higher premium than an office worker for the same amount of cover.

TPD cover cam be held and funded within your superannuation.

Living insurance cover is often called critical illness or trauma insurance. The benefits will be paid if you are found to suffer from a list of ailments which include such conditions as cancer, heart ailments and loss of limbs. The full list of medical conditions differs with different policies. This cover can also be obtained as a stand alone policy or be attached to a term life insurance policy.

Trauma insurance is often referred to as living or crisis insurance, as well as critical illness insurance, as you benefit from having the cover while you remain alive as opposed to term life insurance where the benefits are paid to your beneficiaries after you die. It’s an insurance policy that’s intended to help you out financially if you suffer from any one of a long list of medical conditions, such as a mild heart attack for instance, and as a result become seriously ill. This could mean you not being able to return to work for some time. When you do get to return to work you could find yourself not being as productive as you once were, the stress might be too much and your future looks rather bleak. You know you can not continue and find you have to leave your job.

In these circumstances you won’t be eligible for a total and permanent disablement pay out and a claim for income protection insurance could also be similarly dismissed, as technically, you could still work albeit on light duties and less pay. The only avenue for compensation will be trauma insurance as it pays on diagnosis of the event occurring not on how you’re affected.

Trauma insurance is intended to make sufficient money available if you suffer from a specific traumatic event to enable you to do the following:

  • Avoid any financial stress adding to your physical difficulties by paying any credit card debts, car loan and even mortgages
  • Cover the cost involved in any renovations to your home to better suit your changed lifestyle
  • Pay for any specialist medical care or any necessary rehabilitation.

Most insurers cover you for between forty and fifty specific medical conditions and all cover you for the most common ailments such as cancer, heart attacks and stroke. This cover can also be obtained as a stand alone policy or be attached to a term life insurance policy.

Income protection insurance is an insurance that’s structured to provide you with an income stream once all other avenues have been exhausted. It is an insurance that provides a benefit payment of up to 75 percent of the taxable income shall you get rendered by an illness or injury, of which you are unable to remain on the job. It will also pay all your superannuation costs while you are off work. If you’re an employee you’ll have access to your employer’s sick pay for a certain period when you’re too ill to attend work. If you’re self employed you’ll most likely have savings put away for such occasions but when these sources run dry and you’re still unable to return to work your financial position could become quite precarious if you didn’t have income protection insurance to fall back on.

Income protection insurance benefits are paid monthly and not as a lump sum as are other life insurance benefits. This is because it’s primarily an income replacement scheme with the sole purpose of keeping an income stream coming in to allow you to retain your accustomed to standard of living when you are too ill to do so yourself. This means that income protection insurance is arguably the most important of all life insurances in that we all owe our standard of living to our ability to earn an income.

You’re also able to adjust the cost of the premium you pay for income protection insurance cover by structuring the cover in the manner that suits you best. For instance:

  • There is a waiting period involved before benefits start being paid. You can use this waiting period to your benefit in that you can have it finish when your employers sick pay ceases or when your savings are depleted enough. It’s usual for people to wait for two weeks, a month or three months depending on their particular situation.
  • You’re also able to vary the length of time you want the benefits paid. This could be anything from two years to age 60 or 65.
  • You can have the benefit payments increase in line with inflation. This is an important factor as what might be sufficient today could well be insufficient in five, ten or twenty years time. This is known as a claims escalation option.
  • Superannuation or Retirement Benefit. You are able to include a superannuation payment on top of your monthly benefit to ensure you superannuation grows as it would if you were working full time.
  • The business expense benefit option can also be included. This is especially important for self employed people and it’s intended to pay all your fixed business expenses such as rent, phone, power etc. while you are unable to attend work in the normal fashion due to your illness or injury.
  • You can fund the premiums through you super.

Although business overhead insurance is based on the same principle as income protection insurance, its primary function is to protect your business rather than yourself. It’s meant to pay the costs of running your business while you’re unable to attend to it yourself because of an injury or illness which has incapacitated you. The benefits provided under this type of policy are paid in the form of monthly reimbursements. This means you won’t have to worry about meeting the office rental costs, property loans or car lease payments.

Power and phone costs will be reimbursed as will maintenance costs involving any of your business machinery. It can also include the salary and superannuation costs of your employees, in fact it covers any business related expense. Like income protection insurance, business overhead insurance premiums are also tax-deductible.

This website contains general advice only. You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Shartru Wealth and its authorized representatives do not accept liability for any errors or omissions of information supplied on this website.