In the real world, you can never be 100 per cent certain every decision you make will expose you to some form of risk – be it environmental changes or shifts in personal circumstances. But the good news is, for most risk that you may be exposed to, as an individual or business, you can be sure that there is an insurance policy to help you manage it. When you are seeking financial services or meeting financial planners in Melbourne, you will encounter a range of insurance policies and plans. Here is a brief guide to common insurance types available with various financial service institutions and planners in Melbourne.
Income protection aims to provide you with a stable or set minimum income flow, regardless of changes in your ability to earn income. For instance, if one day something happens and you are no longer able to work and earn income, it may have a huge effect on your ability to meet your home loan obligations as well. So instead of having to sell off the family home to pay off the home loan, you can rely on your income protection to help you pay.
Total & Permanent Disability (TPD) Insurance
TPD aims to help you cover obligatory expenses at a time where you become totally and permanently disabled by an incident of illness. It involves paying a periodical premium over the insurance policy to your selected insurance provider. In the event that you do become disables, a lump sum is paid by the insurance provider to help you continue ongoing expenses such as mortgage repayments and education for a certain period of time. Other expenses TPD insurance can cover include additional medical and lifestyle expenses – such as operations, rehabilitation and residential modifications.
Unlike TPD insurance where benefits are received when you are still alive, life insurance is paid out and provides benefit to your financial dependents after you pass away. When you pass away, it may be the case that you pass on numerous costs onto your financial dependents, such as loan repayments, school fees – and funeral costs for your passing. And with these financial burdens are on top of the emotional stress placed on your family and friends that comes with the loss of a loved one. That’s where Life insurance can help ease pressures on your family during this grieving period.
A trauma insurance payout aims to help cover medical expenses and some lost income after a serious accident or illness diagnosis such as cancer or stroke. Typically, the cover of trauma insurance exceeds the benefits provided by what health insurance you may have. But unlike TPD insurance and life insurance, the payout is made in the case you have an expectation to return to work at some point.
One component of business insurance that you can personally undertake is key person insurance. This is suitable if you are an essential person to your business, such as a holder of expert knowledge, business history and transaction information, processes and personal network. In the case of your passing, your business may suffer a severe drop in performance and loss of profitability. Thus, the lump sum pay key person insurance can help cover the costs associated with profit loss, hiring interim employees and recruiting senior personnel.
Regardless of your personal situation, there is insurance type suitable for a myriad of risks you may be exposed to. With every insurance policy, there are also different features, options and varying degrees of cover to suit a range of budgets and lifestyle needs. If it sounds like a lot of information, you’re right. Selecting an insurance policy appropriate for you can be a difficult process. So be sure to ask advice from your local and friendly financial planner of finance service provider in Melbourne.