Financial services and advice
We can offer professional advice and recommendations on a wide range of financial services including:
- Term life insurance
- Trauma coverage
- Total and permanent disability coverage
- Income protection insurance
Scroll down to learn more about each of these areas, and contact us if you have any questions or concerns.
What is term life insurance?
Term life insurance provides the lump sum payment to your nominated beneficiaries (your spouse and/or children) when you die. It may seem morbid and terrible to plan for this, but it can help your loved ones to pay out any debts that you may have together (such as your home mortgage) and it can provide for the future needs of any children you have (such as schooling costs). Your partner could also invest a lump sum payment and potentially gain an income from it.
‘Term life’ is short for ‘yearly renewable term,’ meaning the premiums are reviewed by the insurers each year. This is in contrast to previous life insurance models that had a fixed premium for the duration of the contract – with an investment component, bonuses, and a cash value. This type of cover is not sold anymore in Australia. So really, when you talk about life insurance you’re always talking about yearly renewable term life insurance.
Ultimately, the purpose of term life insurance is to ensure that your family will, as much as possible, still be able to afford the life that you planned to have. Term life insurance can help prevent financial trauma from adding to the emotional trauma your family would inevitably suffer.
Do I need trauma cover?
According to ASIC’s MoneySmart, trauma cover is also referred to as critical illness cover or recovery insurance. A serious illness can make it difficult or impossible for you to continue to work, and you would need to find a way to support yourself (and your family if you are a breadwinner).
Trauma insurance cover can provide a financial safety net for such events. It pays a set amount, and can be used for things like private medical costs above your health insurance, the ongoing cost of therapy and special transport, adjustments to housing and lifestyle changes, and debt repayments. Trauma cover pairs well with income protection for more robust protection for you and your family.
Total and permanent disability cover (TPD)
If you should experience a serious injury or illness, it can make it difficult for you to continue to work, and could leave you looking for a way to support yourself and your family. Total and permanent disability cover (TPD) is often purchased with life insurance cover to provide you with a financial safety net.
What is income protection insurance and do I need income protection?
Income protection insurance, also known as salary continuance, can help you manage your expenses if you’re unable to work for an amount of time due to being sick or injured. When thinking about whether to buy income protection, consider life insurance, trauma and total and permanent disability cover as well.
Income protection is especially important for anyone who relies on an income (and/or whose family relies on your income). ASIC notes that income protection typically offers cover for up to 75% of your gross wages for a maximum time period, and they can be ‘stepped’ or ‘level:’
- Stepped premiums – Your insurance premium will increase each year as you get older but is usually cheaper in the beginning. If you’re thinking about this option, it is worth looking at what the premiums will be over the next 5 years, or however long you intend to hold the insurance for, to make sure you can afford the premiums.
- Level premiums – Your insurance premium does not change due to your age but is generally more expensive than a stepped premium in the beginning. Level premiums may increase over time due to inflation adjustments or changes to the insurer’s fees.