Financial protection such as insurance can help ease some of the stress at difficult times and ensure that financial worries do not add to your family’s emotional burden at time when they are least able to cope.Your financial adviser can help you choose the right mix of insurance for you and your family’s particular circumstances.
Total and permanent disability insurance
Total and permanent disability (TPD) insurance covers you covers you if you cannot work due to a total and permanent disability and need to adjust your lifestyle accordingly. Many TPD policies pay a lump-sum benefit after the insured has been totally and permanently disabled for a set period, such as six months.
What is your greatest asset? Your home? Your car? Your investments?
Your greatest asset is actually your ability to earn an income.
Most of us rely on our income to pay the mortgage or rent, keep ourselves and our families clothed and fed, and maintain a comfortable standard of living. So protecting our ability to earn an income should be a high priority. Yet while most of us are aware of the importance of insuring our homes and possessions, we often ignore protecting our income.
An income protection plan will pay a regular income if you are unable to work because of sickness or injury. Whether the disability is as serious as cancer or as minor as a broken arm, income protection provides a simple, cost-effective safety net.
Income protection is particularly important for the self-employed, who cannot rely on short-term sick leave from an employer.
Most policies will pay up to 75 per cent of your average monthly income (net of business expenses but before tax), if a disability, illness or injury prevents you from working. Income protection premiums are tax deductible.
How much insurance do I need?
There is no right or wrong answer to this question. What is important is that you understand how to calculate the amount of insurance that is right for you.
Following a traumatic event, an adequate level of insurance will allow you to pay off the mortgage and other debts, provide for your children’s education and allow your family to maintain their lifestyle.
You can structure your insurance to minimise your tax obligations. Give us a call to arrange a no obligation (and no cost) meeting to discuss your specific circumstances.
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