Life Insurance
Life insurance is perhaps the first type of insurance that was introduced. Its main purpose is to cover you for death. Life insurance pays a lump sum benefit to your beneficiaries when you die and will give you the peace of mind that your family will be protected, while at their most vulnerable. An added bonus is that life insurance can even pay a benefit in case of terminal illness.
Life insurance can help you achieve the following:
- Help pay
mortgage and other financial obligations that you might leave behind. - Look after your estate planning needs.
- Provide income for your spouse while looking after the family or alternatively pay for someone
elses help in looking after the family. - Cover other extra expenses your family might have; and
- Pay your funeral costs.
Total & Permanent Disability Insurance
Total & Permanent Disability Insurance (TPD) is similar to Life Insurance in its outcomes. That is, should you become totally and permanently incapacitated, TPD is designed to pay an amount similar to the amount that life insurance might pay, perhaps even more, as you are essentially still alive.
TPD insurance will pay a lump sum benefit to you or your super fund if the policy is held within super and as mentioned is designed to help provide income support, reduce debt or perhaps pay for modifications to your home. If the policy is held outside of super, the total benefit amount will be tax-free.
Trauma Insurance
Trauma Insurance or Critical Illness Insurance pays you a lump sum benefit if you have been diagnosed with a number of critical illness, including the most common, such as heart diseases, cancer, stroke. Critical Illness Insurance can also cover you for certain Neurological conditions, such as Alzheimer’s disease, stroke or dementia, as well as organ disorders such as chronic kidney failure, or major organ transplants. However, it should be noted that the actual definition of critical illness may be different between each insurer provider.
Giving you a lump sum and tax-free payment, at
- Cover medical expenses allowing you to choose the best available medical there is.
- Pay for medical equipment and rehabilitation costs.
- Allow you to pay your bills and other expenses or debts without causing additional financial stress to your family.
- Gives you and your spouse a choice to stop working in case you needed to be taken care of.
- Some policies will also include your children in case they suffer a critical illness.
A point of difference with Trauma Insurance is that you are eligible to receive the benefit as soon as the condition is diagnosed. There is no necessity to wait a certain length of time before payment is made, as with the wait periods associated with Income protection and TPD Insurance.
While there is no right or wrong amount of trauma cover, at Guardian Wealth Management, we can help you work out how much would be appropriate for your own personal circumstances.