Making sure you have the right levels of insurance is imperative. If you or your partner are affected by accident, injury, illness or death the financial wellbeing of your family can be severely affected.

Most people believe that these events will never happen to them but the truth is they can happen to anyone at any time and you need adequate insurance to protect your family from life’s unexpected events.

What if something traumatic had happened to you yesterday - what would the exact steps be that your family would be taking right now?

If you have a mortgage and are the primary breadwinner how would you ensure you do not lose your house? What if you are not the primary breadwinner, but you are the primary carer or homemaker, will it be possible for your partner to continue their regular job and earn the same income without your help with the family and the home?

Another scenario is that you may need to be off work for a period of time due to injury or illness and your sick pay may run out. If your income is not protected you will most likely have to make drastic changes to your lifestyle.

There are thousands of what if’s and three simple solutions - adequate Life Cover, Total and Permanent Disability Cover and Income Protection. Having adequate insurance protection will financially cover you and your family from unforeseen events that may come your way. To ensure you are covered you need to take time for proper analysis and implementation of a sound and affordable insurance strategy.

When considering personal insurance, whether for a new policy or an update to an existing policy. it is beneficial to meet with a specialist adviser to ensure you are receiving the best advice and sourcing the best policy to suit your personal situation.

This means looking beyond your existing liabilities only and asking difficult questions and what if’s to build a more comprehensive longer term vision. With the majority of Australians grossly underinsured, BDO advisers take it on themselves to prescriptively demonstrate various levels of cover and what that might mean under certain circumstances. This attention to detail ensures that you will have the best information with which to make an informed and educated decision.

Our recommendations deal with Survival scenarios through to income replacement scenarios and ensure that you are not sold on any particular product - but on the strategy.

BDO Financial Planning do not have an alliance or undertaking with any specific provider and seek to present the most sound insurance option available in a concise statement of advice.

Types of personal insurance cover

Life Insurance
There are a variety of options available when considering life insurance including policies with investment components, expiry dates and optional extras. Life cover provides a lump sum payment upon your death and the amount of cover is based on your current debts, and allowing for future provisions income. This amount should be sufficient to leave your loved ones with a similar lifestyle as before your death without making any financial sacrifices. Life Insurance can be obtained within or external to your superannuation.

Total and Permanent Disability (TPD)
TPD offers protection in the form of a lump sum benefit should you ever suffer permanent disability from an accident or illness and can no longer work. This type of policy is commonly overlooked but can be considered one of the most important because rehabilitation and medical expenses can add up, especially when you are no longer able to earn an income.

Income Protection
Income Protection provides a regular stream of income over a specified benefit period should you temporarily be unable to work due to illness or injury. This protection buys you the time to recover without having to dip into your savings. Generally the standard waiting period for these policies is 30 days with a benefit period of 2 years however you have the option to extend each of these to suit your needs. The premiums for Income Protection are currently tax deductible.

Critical Illness
This type of policy is relatively new to the insurance product range and goes hand in hand with TPD. Critical Illness cover provides a lump sum payment if you are diagnosed with a specified injury or illness that is not necessarily permanent. Some of the illnesses may include: Heart Attack, Organ Transplant or Cancer. The purpose of this policy is to cover medical expenses, time off work and your daily living expenses while you recover. Critical Illness is also available for dependent children 2 years or older as an optional extra to the parents policy.

Frequently Asked Questions

Is Personal Insurance expensive?
Personal insurance cover can be obtained for as little as a couple of dollars per week. Similar to Health Insurance, personal insurance premiums depend on your age, health history, occupation and the sum insured, so it is generally more cost effective to obtain insurance at a younger age rather than wait until you are older.

Do I need Personal Insurance cover?
One of our most important assets is the ability to earn an income. If you were unable to work due to injury or illness, how would you meet expenses such as loan repayments and living costs? This is where personal insurance comes in because its sole purpose is to relieve the financial strain so that you can worry about more important things.

What are the different types of Personal Insurance available?
There is a lot of confusion out there about the different products available and insurance companies tend to have a variety of names for similar products. The main types of personal insurance policies available are Life, Total and Permanent Disability (TPD), Critical/Terminal Illness and Income Protection and each policy covers a range of specified events that are generally only covered through one type of policy. Therefore it is important to seek advice to ensure you are fully covered.

What are the premium payment options?
The payment options can vary between insurance companies but generally they offer the option of paying your premium as a lump sum each year or as a monthly instalment. Most insurance companies offer a discount for yearly lump sum payment and premiums can be paid via cheque, direct debit or credit card depending on the insurer. If your insurance is held through superannuation, the premiums are debited from the fund balance.

What should I expect from the application process?
There are a variety of methods in applying for insurance such as over the phone, through a paper application or with an specialist adviser and it is your decision as to which method you are most comfortable with. It is most beneficial to meet with an adviser so you can be sure you are applying for the correct and adequate cover. The application process covers your personal details and medical history. Once your application is sent to the insurer they will assess your application and you will be notified of the outcome or any additional requirements generally within 14 days.