Personal Insurance

Everyone insures their cars and houses, but why do people not insure their most important assets? Income, Family Protection, Accumulated assets... If you were to die or become unable to work due to partial or total disability would your assets be protected and secure?

Types of Personal Insurance

Life/Term Insurance - Life insurance safeguards against the financial effects of unexpected death or disablement at both a personal and professional level; and alleviates the need to liquidate assets or dip into savings. This insurance pays a lump-sum benefit in the event of death on the life insured.

Total Permanent Disability (TPD) Insurance - This is a lump-sum payment if the life insured was to become totally disabled. This can be held separate or in conjunction with life insurance.

Trauma/Crisis Insurance - Trauma/Crisis insurance is designed to cover you if you wish to safeguard yourself and your family from financial harm in the event of suffering a medical crisis.

In the event of a medical trauma/crisis, terminal illness or death, crisis insurance provides a lump sum that could assist to cover your extra medical costs, or, if necessary, make up for lost income.

Trauma insurance pays a lump-sum amount if the life insured is to suffer from one of 37 standard trauma events.

In addition to the standard Trauma/crisis benefits, you may apply for a child's crisis benefit. This benefit is in addition to your policy and pays a lump-sum benefit if your child was to suffer from one of 22 separate trauma events. This cover may allow you to stay at your child's beside, cover medical expenses or pay for a carer.

Income Protection Insurance - As the name suggests, income insurance allows personal income or business expenses to be paid if illness or injury prevent you from working. It can also help ease the burden of medical and rehabilitation costs. Regardless of whether you are self-employed, an employer or employee, you can rest easy knowing that you, your family and business will be financially taken care of. Income insurance provides peace of mind and the freedom to recuperate, knowing that you can continue to receive an income if you become disabled.

Income Protection generally pays an income stream up to 75% of your pre-disability income for a defined term.

Business Expense Insurance - Pays an income stream which is used to cover business overheads and other expenses. This covers the lack of income that would have otherwise been available to pay for expenses had you been able to work.

Your Needs

It is important to insure against death and total & permanent disablement for non-income earning partners. Your partner may contribute significantly to such duties as childcare and home maintenance and in the event of their death or disability the cost of hiring professionals to provide these services could be considerable. It may also be very expensive to provide care for your partner should he or she become permanently disabled.

The cost of the insurance for both the income earning and non-income earning partner depends on the type of cover selected. A regular review of your cover is necessary to ensure you are not under-insured or over-insured.

Tax deductibility is available for certain types of insurance cover and it is therefore important that your insurance is structured in such a way as to take advantage of any tax concessions for which you may be eligible.

In determining the most appropriate policy you should aim to achieve a balance between affordability and the most favourable policy conditions. In assessing the amount of cover required, you should consider:

• Current levels of assets and liabilities.
• Income required to maintain your family's standard of living.
• Costs of a housekeeper or day care should these services be required.
• Costs of caring for a totally and permanently disabled person.

Claims

At the time of illness/injury, you will be required to submit a claim to the insurer with medical proof of your illness/injury and the original policy document. This will then be assessed by the claims department and should all requirements be met, a benefit will be paid.

Below are just a few examples of how different types of insurance have aided the life insured and their dependants:

• Jack aged 38 is a carpenter and owns a Total and Permanent Disability (Own Occupation) Policy with a benefit amount of $500,000. At work one day Jack suffers a stroke. He survives the stroke but is paralysed down the entire left side of his body. Jack can no longer perform his usual job for which he has been trained. He can claim under the Own Occupation Policy and receive his entire lump-sum benefit of $500,000 if he chooses.

• Mitchell (47) is an accountant. He earns $130,000 p.a. and is the principle breadwinner of his household. Mitchell is diagnosed with pneumonia and is required to take three months off work but has only four days of sick leave left.
  His policy has a two week waiting period and a benefit period to age 65. Mitchell makes a claim on his Income Protection Insurance and after his waiting period has ceased receives a benefit of $8,125 per month (paid monthly in arrears). This insurance has allowed his family to maintain their lifestyle without eroding any savings or assets.

• Wendy (32) is an IT Consultant. Whilst at work one day receives a phone call from the hospital. Her child has been in an accident and has suffered a major head trauma fracturing her skull and leaving her in a coma. As they had just arrived back from a four week trip overseas Wendy has no annual leave and understandably wants to be there for her child. Wendy has a Crisis Protection Policy with Child Crisis Option to the value of $50,000. She makes a claim and receives the full lump-sum benefit of $50,000. This has allowed Wendy to take leave without pay, cover medical costs and stay vigilant at her daughter's bedside for the duration of her hospital stay (three months). Wendy's daughter, returned to school two weeks after leaving hospital.

Contact us now to arrange a Free Insurance review including a free needs analysis to ensure you and your family are adequately insured.

For more information or to arrange to speak with one of our accountants or financial planners contact us now by submitting an online enquiry form or call 1300 QUINNS or on +61 2 9223 9166.

The Quinn Group - Providing the Total Solution

As a legal, accounting and financial planning firm The Quinn Group are able to offer legal and financial services in one location. Visit our Legal Services page to see our range of legal services.

Visit our Accounting Services page for more information on the wide range of Accounting Services that The Quinn Group can provide to you as an individual or a business.

Whilst we have 5 offices located in Sydney, we are also able to meet you at location convenient for you. Additionally, we have web and teleconferencing available for regional, interstate or international clients.