Personal Risk Planning.
Protecting loved ones - and yourself - from financial hardship and the ‘what ifs' of life must be an integral part of any responsible financial plan. The bottom line is that very little is certain, and though it may be uncomfortable to think about…it could happen to you.
Just about everybody recognises the importance of protecting major assets like your home and car - and so most of us do. But what about protecting your most precious asset – your life and health? How about protecting your ability to produce an income and your business interests?
It’s another area where Metaplanners can help you to make informed decisions.
This page provides basic information on the different types of life insurance solutions available to you when developing your comprehensive risk management plan and determining how much is enough to ensure financial security for you and your family.
We must stress that each type of insurance carries its own limitations and benefits that are quite often peculiar to individual policies, so the following should be considered as a general overview only. As with all financial considerations, insurances should be viewed in parallel with your personal circumstances, requirements and objectives.
A new webiste was released by IFSA in May 2009 called Lifewise, and it shows how you can take some simple measures to create a more secure future. www.lifewise.org
Term Life Insurance
'Term Life Insurance' is the proper name for what most people call 'Life Insurance'. Simply, Term Life Insurance provides a lump sum benefit payable upon your death or the diagnosis of terminal illness.
- Term Life Insurance provides financial security and peace of mind at the time your family needs it most.
- Policies are generally renewable annually, so the premium is calculated each year and normally increases as you get older.
- It is a rather flexible form of insurance because the sum insured can be altered to suit your financial circumstances without incurring any financial loss.
- The lump sum paid to your beneficiaries could be used to pay back debts and/or provide a source of income to help your family maintain their current lifestyle, keep their plans on track and provide an investment asset.
Total and Permanent Disability (TPD) Insurance
Total and Permanent Disability Insurance (TPD) provides a lump sum should you suffer an illness or injury that leaves you totally and permanently disabled. The benefit is paid if you become totally and permanently disabled as specified by the policy.
- This form of insurance is normally available as an optional benefit on a Term Life or Trauma policy.
- TPD insurance benefits are often used to eliminate debts, pay for medical expenses or fund any permanent changes to your lifestyle that are necessary as a consequence of your illness or injury.
- Many of the features of Term Life Insurance will apply equally to TPD. The sum insured is payable in the event of TPD and is generally restricted to being no more than the death benefit.
Trauma Insurance
Trauma insurance provides you with a lump sum upon the diagnosis of one of a list of specified serious medical conditions and procedures that generally includes major health problems such as cancer, heart attack or stroke. This form of insurance is available both as an optional benefit on a Term Life Insurance policy or as a stand alone policy.
- Trauma insurance is designed to provide you with money when you need it most. It could be used to cover medical costs and treatment or debt reduction/elimination.
- It can enable major lifestyle adjustments post-trauma, such as reducing working hours to spend more time with family.
Income Protection Insurance
Income Protection Insurance provides you with a monthly payment while you are unable to produce an income as a result of illness or injury. This form of insurance is normally available as a stand alone policy.
- Most policies cover up to 75% of your salary should you be totally or partially disabled as defined by the policy.
- Income Protection payments can assist you and your family to maintain your current lifestyle. The benefit paid enables you to focus on your recovery or treatment without worrying about meeting regular expenses.
- Note that the disablement doesn’t need to be of a permanent nature, generally speaking, the benefit is paid if you are not working and are unable to earn your normal income due to illness or injury.
Business Expenses Insurance
Because your financial responsibilities can often extend way beyond your family alone, Business Expenses Insurance pays a monthly benefit to cover fixed business costs should you suffer an illness or injury and are unable to work.
- It is available to certain self-employed persons who wish to cover their business expenses if they are unable to work because of illness or injury.
- Payments are generally made on a monthly basis and can reimburse up to 100% of approved business expenses.
- The payment period for claims is generally limited to 12 months